A Photo Cruise along South Cocoa Beach

I took a cruise down the Banana River shoreline of south Cocoa Beach yesterday and took photos of all the riverfront condos so that you readers can better visualize the buildings that I mention so often in this blog. Starting at the extreme southern end next to Patrick Air Force Base we have the brand new, super-luxury Villa Verde. Several units available from about $1,000,000.


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Heading north the next building is the new Orlando Beach building, 4 units available from $499,000.


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Past a few classic old Florida homes on the river like these two with great back yards.


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Then we get to River Bend.


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For perspective, just past River Bend, you can see Crescent Beach Club (on left) and the Constellation which are both directly on the ocean. The upper floors here have not only an ocean view but a western view across the wide part of the Banana River all the way to south Merritt Island. This is the most narrow point of the barrier island with just a sliver of land separating the ocean and the river. Two very nice units in Constellation went under contract last week at bargain prices.


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Next we get to River Villa (on right) and Dockside, both with boat slips for all units. You can see Casa Playa on the ocean between these two buildings. There is a penthouse for sale at Casa Playa which could have the best views and layout of any unit in Cocoa Beach.


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Continuing north past the old Dolphin Inn we get to River Place. That is Waters Edge on the ocean looming in the background. No boat slips here.


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Immediately next door is Water's Edge West which shares a river dock with Water's Edge on the ocean. You can catch a glimpse of the massive new, three-story duplex behind the building.


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Heading north we see The Carlyle (on left) and Riomar on the ocean. There have been two sales this year in the Carlyle for at least $1 million each. In the Riomar, each unit is an entire floor so you have windows on all four sides. There is a 3rd floor unit available for $899,000.


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Next on the river we come to Crescent Palms (on the right) and Garden by the Sea, soon to be completed. 2650 sq.ft., 3/3 units available in Garden from $655,000. Pretty much the entire Crescent Palms building is available, one 2293 sq.ft., 3/3 unit for $455,000, $244,000 less than the owner paid 2 years ago.


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Last condo on the river in south Cocoa Beach before the split in A1A is Magnolia Bay. No fire sales available yet.


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From this point north there are only single family homes on the river until River Lakes and Harbor Isles which are about 1/2 mile away. Hope you enjoyed the tour. It was pleasant from the boat.

Florida Insurance Reductions

Cocoa Beach Sunrise, August 25, 2007

Even with the mortgage market in turmoil, sales are closing. So far this August, we've had seven closed sales of MLS-listed, single-family homes in Cocoa Beach and Cape Canaveral. Three of those were in the tiny Harbor Heights neighborhood in Cape Canaveral. The other four were in Cocoa Beach, two on canals and only one over $500,000.

We have had 22 MLS-listed condos close in the same area since August 1, on pace with the first half of the year, roughly one a day. (Actually, since today's Julian date is 240 and total condo sales so far for the year are 288, the exact number is 1.2 per day.) The only 2 sales over $500,000 were new units at Meridian on the ocean, one for a whopping $1,049,900. I understand that closings of pre-construction contracts there are in full swing although only a fraction were listed in the MLS and will not show up in the MLS data. So far, none have shown up on the Brevard Property Appraiser's site. Overall condo inventory continues to slowly shrink, down over 10% from the high point reached in May 2006.

MLS Inventory - August 28, 2007

• Condominiums______900 all prices
• __________________147 over $500,000
• Single family homes__176 all prices
• ____________________73 over $500,000

Owners of detached single-family homes in Florida are finally getting a break on their insurance rates. The Legislature has designated $250 million for free wind inspections that will qualify homeowners for insurance breaks with certain hardening features including hurricane doors, windows, roofs, shutters, etc. Some homeowners will qualify for assistance in getting strengthening done to their homes. I have personally heard of one homeowner getting a $4600 rebate. The program is called My Safe Florida Home. Check it out if you own a detached single-family home anywhere in Florida. Unfortunately, the program is not available for condos or businesses.

The Labor Day holiday weekend is coming up and my favorite season in Cocoa Beach begins again. Snook season opens September 1 and the mullet run starts soon with all kinds of action in the surf for anglers fishing with live mullet. This is a great time to visit as the summer crowds are gone, water is warm and the ocean is alive with fish and waves. Here's a sweet little rental condo in south Cocoa Beach if you'd like to visit.

August 14 update

Just a brief update this morning on two oceanfront condos previously featured in the False Realities post. Seller number 2 in that post with a 2278 sq. ft. corner ocean unit in Crescent Beach Club who had progressively dropped his price from $649,000 to $419,000 finally got an accepted contract as of yesterday. Seller number one who had a direct ocean corner unit in Wavecrest with 2000 sq.ft. closed his unit yesterday. Selling price: $385,000, quite a haircut from the $630,000 original asking price in April of 2006. A 15th floor direct ocean, 2/2, sand dollar floor plan with 1470 sq.ft. at Stonewood closed yesterday for $475,000. Original asking price was $575,000 last November.

An interesting price reduction today is an 11th floor, southwest corner in 2100 Towers that has been reduced to $287,000 from $316,000 in April. Other than a ground floor unit with no view that sold last month for $265,000, no 2100 Towers unit has sold for less than this since 2003.

Another smoking deal hitting today is a bank-owned 4/3 canal home in Cocoa Beach for $339,000.

I'll leave you with a shot of a few of the Australian pines or casuarina trees slated to be cut down on the Thousand Islands in Cocoa Beach. Whatever the science behind the removal, I'll miss these trees.

More Deals and Steals

Two weeks into August and sales are plodding along even as the credit markets try to adjust to the changing conditions. The fallout directly affected me this past week when one of my wife's pending deals had to quickly shift gears when the lender that supplied the pre-approval abruptly stopped lending. Things appear to be back on track with another lender but, with things changing daily, it's not done until it's done. Like this little gator I shot yesterday at the Cocoa Beach Country Club, lenders are wary of biting off more than they can handle.



Eleven closed sales have recorded through the MLS since August 1 in Cocoa Beach and Cape Canaveral and the prices are all over the map. Click on the highlighted listings to see photos. A gorgeous 2120 sq.ft. pool home on the golf course in Cocoa Beach closed for $375,000 after being first listed for $525,000 last September. On the same day, a new 2180 sq.ft. unit in the Meridian condo on the beach closed for $659,900. A one bedroom unit in Villages of Seaport that sold in July 2004 for $131,000 closed for $110,000. At Sandcastles condo on the ocean in Cocoa Beach, prices are showing remarkable resilience. A 5th floor, 1286 sq.ft., 2/2 unit sold for $400,000. Sandcastles, like the few other condos that allow weekly rentals, can command a higher price because income can be substantially higher with short-term rentals. A non-waterfront 2/2 unit at Cape Shores on the river that was aggressively priced at $139,000 got a contract in 3 days and closed for $137,000 4 weeks later.

A 2158 sq.ft. 4/2 home on the open river with unobstructed views of the islands and with a dock closed for $550,000 after only 14 days on the market. It was listed for $575,000. My office sold a 2/2, 2nd floor Four Seasons overlooking the pool for $159,000. Rounding out the good deals was a Jamaica Cove 2/2 that cracked the $200,000 barrier for waterfront condos and closed for $195,000 after being first listed for $259,900 last October.

Cocoa Beach and Cape Canaveral MLS Inventory - August 12, 2007

• Condominiums_______935 all prices
• ___________________150 over $500,000
• Single family homes__171 all prices
• ____________________72 over $500,000

Another of the locals at the Cocoa Beach Country Club, a Florida soft shell turtle crossing the fairway looking for a better lake. These guys lay their eggs in the sand traps in the summer.

Crisis and Opportunity

August 3rd will likely go down as the definitive "line in the sand" day for mortgage lending in the US for this cycle. The trouble that's been brewing for a few years peaked yesterday as over a dozen major lenders either stopped or temporarily suspended some or all funding. The over-100 subprime lenders that have imploded this year were joined early this week by the 800 pound gorilla, American Home Mortgage, who ceased all operations and left over $750 million of in-progress loans without funding and over 7000 employees in limbo. Some of the other very big names appear to be in serious trouble as well.

The immediate impact for buyers of real estate will be much stricter lending standards and far fewer mortgage products. Those with good credit and verifiable income are in good shape although there will likely be far more hoops to jump through to get the loan. Especially impacted are non-conforming or "jumbo" loans (over $417,000) . Marginal borrowers have probably missed their window of opportunity. The good news for those with good credit and/or cash will be greater bargaining power as the pool of buyers is now much smaller, especially for properties requiring a mortgage over the $417,000 "jumbo" threshold.

Sellers, if you're paying attention, it's time to make your plan if you hope to sell. Either price your property right or hit the bench until this game is over. Throwing a hopeful price out there waiting for that mythical buyer who will pay your too-high price is an exercise in futility. It's become obvious from these latest developments in the credit industry that the bottoming that NAR called in 2006 is not here yet. Waiting for next spring to sell will almost certainly be a very expensive decision. Aldous Huxley was talking to you when he said, "Facts do not cease to exist because they are ignored."

I shot this last week from the Banana River looking east into Edwards Bay in Snug Harbor down in south Cocoa Beach. This is one of the great things about Cocoa Beach. Beautiful places like this on the river are usually just a short stroll from the beach. In some cases, as in extreme south Cocoa Beach, the Banana River is across the road from the ocean.



If you'd like an informed and realistic agent to help you sniff out a bargain in this dynamic market, email me at larry@southcocoabeach.com I enjoy going to battle for my buyers. Remember, crisis and opportunity arrive hand in hand. And, we can always work in a little fishing during our search.

Happiness Underfoot

The poet, James Oppenheim said, "The foolish man seeks happiness in the distance, the wise grows it under his feet." I suspect he never surfed but his words certainly apply. By his definition, here's a wise man in south Cocoa Beach.

Sales in Cocoa Beach and Cape Canaveral through the 22nd of July have been steady and we look to hold right on the sales trend of the first half of this year. The numbers of closed over $500,000 condos will be showing an uptick this month and probably next as the few MLS-listed pre-construction contracts at Meridian in north Cocoa Beach begin recording. It's an anomaly that these high-priced units are closing while other similarly-priced condo projects are showing zero sales activity presumably because of defaults and, maybe, developer-granted extensions. The 62 unit Magnolia Bay project has not had a deed recorded since April. I can find only 8 total recorded sales for this complex at the Brevard Property Appraiser's site since the first one closed in January. Meanwhile a new luxury project is breaking ground just south of Magnolia Bay on the ocean in south Cocoa Beach. Go figure.

The direct ocean 2nd floor corner at Wavecrest in south Cocoa Beach that I featured in "False Realities" in June is under contract after dropping the asking price to $399,000. I'm not surprised. The other unit in that piece, the 2nd floor corner unit at Crescent Beach Club, is still for sale at $419,000 having stairstepped down from $649,000 over a 3 year period while just next door a considerably smaller unit on the same floor got a contract in 2 weeks after offering for $425,000. Sellers take note.

I have updated the closed numbers for the year. The early reports are always a little shy of actual as lazy listing agents often take weeks and months to record a sale as closed. These numbers are accurate as of this morning, July 22, 2007.

Of the closed condo sales so far this month in Cocoa Beach and Cape Canaveral, the average days on market is 256 and the selling price average is 75% of original asking price. These numbers are scrubbed to correct for agent manipulations and with the 3 pre-construction sales thrown out.

Closed 2007 MLS sales in Cocoa Beach and Cape Canaveral

Condos

• June______40___6 over $500,000
• May______35___2 over $500,000
• April______43 __4 over $500,000
• March_____36__2 over $500,000
• February___42__5 over $500,000
• January____28__4 over $500,000

Single Family Homes

• June_____5
• May_____5
• April_____4
• March____8
• February__6
• January___3

Inventory - July 22, 2007

• Condominiums______955 all prices
• __________________154 over $500,000
• Single family homes__171 all prices
• __________________72 over $500,000

Until next time, please take note when you see the fast-moving thunderstorms that are so common this time of year. Get inside before the storm gets to you. Lightning will kill you and can strike long before the storm actually arrives. Be safe, please.

Stats, Deals and an Alpha Male

In Cocoa Beach and Cape Canaveral, sales of condos and homes held at a slow but steady pace halfway through July and prices continued their downward slide. Our inventory of MLS-listed properties is slightly smaller again this month but we are still at historically high levels. Here are a few representative sales since July 1st.

In Cocoa Beach a lakefront Harbor Isles 2 bedroom, 2 bath, 1248 sq.ft. unit sold for $175,000. This complex is 2 blocks from the ocean and is on the Banana River. A 3 bedroom 2 bath, 1462 sq.ft. home with 2-car garage and giant old oak trees on Cedar Ave., 4 blocks from the ocean sold for $250,000. In Cape Canaveral a direct ocean 3/2, 1616 sq.ft. unit at La Mer closed for $275,000. A 1 bedroom studio apartment at Surf n Sun in Cocoa Beach, one block from the ocean, closed last week for $77,000. These units sold for as much as $119,000 in 2005.

Our inventory numbers for Friday the 13th of July, 2007 are:

MLS-listed Properties in Cocoa Beach and Cape Canaveral

Condominiums, all prices______927
Single family homes, all prices__176

Condos over $500,000________151
Homes over $500,000_________75

I'll leave you with a picture of an alpha male brown anole sunning outside my window on July 4th. Notice the giant ridge (called a roach) on his back. These are only found on the males and are rarely this big. This guy is definitely king of his world.

False Realities

As promised, here are two case studies of the cost of clinging to a false reality. Keep in mind that the listing agents in both cases may have been, at the very least, supportive of their sellers' costly denial. Seller number one listed his oceanfront condo for sale in April of 2006 for $630,000. After 60 days, he dropped the price by $50,000. A month and a half later he shaved another $40,000 off. Two months later, well into the slow fall season, the price was dropped another $50,000. Two months later, another $40,000 slice and the price stood at $449,000 where it stuck for six months until this week when it was dropped another $50,000 to $399,000.

Seller number two listed his oceanfront condo for sale in August of 2004 for $599,000 and raised the price in October to $649,000 . He changed listing agents in April of 2005 and dropped the price to $629,000. He dropped the price again four months later to $599,000 where it stuck until December when the unit was pulled off the market. It sat empty until August of 2006 when it was again offered for sale, this time for $569,000. One month later the price was dropped to $549,900 where it remained until February of this year when it was dropped yet again to $499,000. April saw a drop to $479,000 and in May it was lowered to $459,000. June brought another $40,000 haircut and today the price is at $419,000. To add insult to injury, this seller has been paying over $10,000 annually for condo fees and taxes while chasing the market down. Mortgage payment, if any, is in addition to that.

Both of these sellers obviously thought that their original prices were reasonable. If either didn't have to sell, as I hear all the time from obstinate sellers, they wouldn't be offering their condos today for 35% below their original asking prices. Seller number one was a little late in getting his unit to market but could probably have gotten more than today's asking price had he seen the light earlier. Seller number two had plenty of time to price correctly and walk away with a healthy profit early in his listing history but he clung to his wrong opinion of the worth of his unit and will now be lucky to net the $380,000 that he originally paid for his unit in 2003.

Moral of this story: If you're selling, make an effort to separate your personal opinion of your property's worth from the market's opinion. A little pain now may be preferable to a lot of pain later. If a prospective listing agent is willing to take your listing at more than their recommended asking price, you may be shooting yourself in the foot to hire them. As my wife is fond of telling me, it is what it is, deal with it.

One last note; If you think that the new property tax reforms are going to turn the market around, you may want to put the Kool-Aid down. My fellow Realtors, for the most part, seem to be hanging their hats on a market bounce once the tax changes take effect. I think that that may be wishful thinking. Craft your selling strategy carefully and seek advice from multiple sources. As always, question everything.