Reason # 81 to Love Cocoa Beach

I took the photo above of the Living Bread Fellowship, a tiny church in south Cocoa Beach and my official polling location during the voting rush before work this morning. Note the long lines of voters. I was able to stroll in, vote and be out in about 15 minutes in what will likely be the heaviest election turnout in American history. Just another in the long list of benefits of small town living and, specifically, of living in Cocoa Beach.

We had a total of 23 closed MLS-listed condo sales in Cocoa Beach and Cape Canaveral in the month of October and 6 single-family home sales. That number could drift slightly higher as tardy listing agents update their listings. There were no sales for more than $500,000. In fact, and not surprisingly, there has been only one closed condo sale of over $500,000 since August 1.

Among sales of note, was a 4 bedroom, 2 year old Oak Park townhome in Cape Canaveral for $180,000. Sold just 2 years ago for $299,900. A very cute, remodeled, 2nd floor, 1/1 at Sutton Place on the Ocean in south Cocoa Beach was picked off for $110,000.

Mortgage rates continue to be volatile with 30+ basis point swings happening three times in the last 30 days. We are currently hovering around 6.3% for 30 year fixed rate mortgages, just below the 5 year high set in July of this year. That rate could change quickly and significantly in either direction if the recent volatility continues.

There remains a dearth of decently-priced direct ocean condos. If you're looking, be prepared to wait but be ready to move when something attractive does come on the market. There are quite a few buyers on the sidelines waiting for a decent deal. The total number of listings is shrinking as many sellers write off the last quarter of the year when sales are at their yearly lows and pin their hopes on the snowbird season which cranks up in force in Cocoa Beach and Cape Canaveral in January. Expect more new listings then.

"Perhaps we are asking the wrong questions."
______Agent Brown - The Matrix

Bummer

"No one told me that it was going to be this bad."

Imagine that you just purchased a unit in an oceanfront building at what seemed a good price and the seller was honest enough to disclose, and kind enough to pay, the upcoming assessment for concrete repairs. You probably felt good about your purchase until the crews finished setting up and got into the heavy jackhammer work making life in the building unbearable during working hours. After talking to neighbors in the adjacent building who just finished their concrete project, you realize that you're faced with up to two years of daily tooth-rattling noise, construction equipment and crews everywhere and a swimming pool that's unusable because it's been covered for protection from the concrete dust. Mortgage payments, condo fees, property taxes and utilities continue to be due for the duration of the project whether you can comfortably use your unit or not.

Concrete renovation projects are part of life in oceanfront buildings (thankfully, not frequent) and knowing about upcoming projects and the possible implications for life in the building during the project is part of the homework that I am constantly mentioning here to prospective condo purchasers. If a prospective owner doesn't consider the life interruptions that are part of major projects, they may have regrets even if they are OK with the cost. As part of due diligence for a condo purchase, I recommend reading the minutes of as many recent association meetings as are available in addition to inspecting the financials and budgets. Upcoming projects may or may not have been mentioned in a meeting, so, it's always a good idea to ask direct questions to the seller, their listing agent, board members and neighbors, if possible. In addition, a good buyer's agent should have some knowledge of the history of past projects on the building and should be investigating possible upcoming work on your behalf.

The building pictured above has just begun it's concrete project. There are units for sale in this building priced at the same level as units in similar buildings in this part of the beach that have recently completed their concrete projects. All other things being equal, the choice for an informed buyer is easy. Do your homework.


"However beautiful the strategy, you should occasionally look at the results. "
______Winston Churchill

It IS Different Here!

There is a long list of thought-terminating real estate clichés that are to the truth as fingernails are to a blackboard. Among the nominees for the best is the title of this post. Other self-serving RE industry creations are "Now's a great time to buy", "Real estate only goes up", "Interest rates are at historical lows", "Buy now or be priced out forever" and on and on. In spite of the transparent purpose of these phrases when used by Realtors about the real estate market, I will venture that "it is different here" has some compelling resonance when said about Cocoa Beach as a community. I'm not speaking as a Realtor, rather, as a resident. Our market is subject to the same influences as other markets across the state of Florida, but, it only takes a drive down A1A through the four or so blocks of "downtown" or a stroll along the uncrowded beach on a beautiful day to realize that the absence of crowds and the small-town sense of community here is a rare commodity to be treasured. I am guilty of taking what we have here for granted but it only takes a moment mired in traffic in any another coastal community in our state to remind me how good we have it. Name one other coastal Florida town that has a "Walk your child to school day" or that has a maximum speed limit of 35 MPH or whose population has not increased in the last 20 years. That is Cocoa Beach. It IS different here. If you're looking to purchase here, do your homework, know what represents good value and bargain hard. Remarkable deals continue to happen in the best little beach town in Florida.

Mosquitoes can be a problem in many areas of Florida but the constant sea breeze keeps the ocean side of the road pretty much free of them and other flying insects. On those few days that the wind shifts around from the west, mosquitoes and other small insects get blown over A1A to the ocean side and tuck into the lee of oceanfront buildings. When this happens, the dragonflies come out en masse to take advantage of the easy meal. The photo at the top is of one of these other-worldly creatures that share our airspace on offshore days like we've had recently.

"We don't see things as they are, we see things as we are."
______Anais Nin

Doo-Doo

A fun fall day in and out of the water in Cocoa Beach.

The word doo-doo still makes me smile years after I first heard my mother use it to describe something that was often referred to in much less attractive terms by others. The real estate machine and it's members are notorious for using similarly softened words and phrases to describe the real estate market when it's not pretty; "soft landing" "slowed market" and so on. The surprising increase in sales numbers in September and the accompanying fall in median prices is being veneered with a pleasant-sounding spin once again by the cheerleaders, but, I still suggest maintaining the same level of diligence and skepticism I have been preaching for the last few years. Are there deals out there? Absolutely, but, some buyers, perhaps buying into the "doo-doo" speak of their agents, are overpaying for properties. Run your comps, look at the competition and factor in some insurance to the downside when making your offers. We've had some outstanding deals so far this month but there have been a couple of stinkers mixed in. If your agent is preaching the positive aspects of this market (time to buy, bottom, etc.) or you suspect that she is more concerned with inking a deal than in her representation of your interests, take a breather. We agents only get paid when a deal closes and sometimes the lure of a commission check may be enough incentive for a hungry agent to describe a turd in less offensive terms if it means getting a sale. Crap by any other name ...

Click here for a list of all 16 closed sales in Cocoa Beach and Cape Canaveral since Oct. 1.

"It is better to know some of the questions than all of the answers."
_______James Thurber

Wish You Were Here

October sunset over the Banana River in Cocoa Beach.

Halfway through October and we've seen only eight residential sales close so far in Cocoa Beach and Cape Canaveral. Of the eight, only one was a single-family home, an older 3/2 Cocoa Beach canal home in good condition on Blakey that went for $295,000. The condos closed so far have ranged from a small Canaveral Breakers 2/2 for $85,000 to a 6th floor, 2484 sq.ft. 3/2 Constellation that went for a shocking $400,000. I was happy to assist the buyers in this sale and it may represent the lowest price per square foot for a high floor direct ocean unit for the entire year of 2008. A non-direct Shorewood 3/2 corner unit without a view closed for $220,000 or just over $104 per square foot. Not bad for a fully-furnished 10 year old unit in a nice complex.

Our inventory continues to shrink and is at it's lowest level of the year. As I've mentioned before, there is a rather large shadow inventory of luxury condos held by developers that is not included in the MLS numbers below. Sales of new units have almost completely dried up and crunch time is nigh for the handful of new developments that are still sitting on significant numbers of unsold units. Like the slow motion sub-prime crisis, this is taking far longer to play out than I imagined but, make no mistake, the day of reckoning is coming.

MLS inventory Oct 15, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____709
over $500,000_________78 - 28 sold since New Year's Day
Single family homes___112
over $500,000_________36


Florida fixed rate mortgage rates have continued their sharp upward trend since the brief low in mid-September moving over half a point to the upside in the one month period.



"Are we human, or are we dancer?" Brandon Flowers - The Killers

Currency Exchange Implications

Cocoa Beach kids prepare the boat for a sunset boat ride on the Banana River.

If you're a foreign national and are planning on using another currency to purchase Florida real estate, you need to be aware of the exchange rate trend. Exchange rates have moved substantially in recent months in favor of the US dollar against most currencies, the Japanese yen a notable exception. The future trend can't be predicted but the recent move is cause for some concern if one is planning on taking advantage of the favorable exchange. One example: A famous Australian surfer purchasing a Cocoa Beach condo on July 1 this year needed 23% less Australian dollars for that purchase than if he waited just two months later simply because of the rally in the US dollar. Click here to read Dan Green's succinct post on the implications of these recent currency exchange movements as they apply to purchases of real estate.

"You can complain because roses have thorns, or you can rejoice because thorns have roses."
_____Ziggy

I ♥ Cocoa Beach

Ah, October in Cocoa Beach. Cool mornings, light winds, deserted beaches, hungry snook and continuation of one of the best surf seasons since the mid-90s. Yes, October 2008, outside the crises of Wall Street, has begun as one to remember with a magical combo of all the things that make this little town one of the gems of Florida's east coast.


Our condo market (at least the low to medium priced segment) has been amazingly resilient in the face of tightening lending standards and daily negative headlines about the world economy. For the second time this year, condo sales exceeded the previous year's numbers. We saw a total of 31 closed condos sales in Cocoa Beach and Cape Canaveral in the month of September.

In the high-end condo market, only one unit over $500,000 closed in the month which brings the year's total sold in this market segment to 26 with 81 units actively for sale on the MLS this morning. The absorption rate looks reasonable at right around a 27 month supply, but, after adding in the unlisted developer inventory of new units, which I estimate at over 100, a different picture emerges, an over-5 year supply. Even if offered attractive incentives be cautious if you're considering a purchase in a complex with a high percentage of unsold developer units. There are critical issues that you need to consider that will not be brought up if you don't ask. Don't overlook units in older buildings with healthy associations. You can save hundreds of thousands purchasing in an exiting building and escape the uncertainty associated with some of the new complexes. And, most importantly, while you're looking, take the time to kick your shoes off and spend at least part of your day on the beach. Warm Atlantic water on one's toes is quite therapeutic.

"The time to relax is when you don't have time for it."
____Sidney Harris

Failure to Grok

Financial system rescue. On the one hand we have Treasure Secretary Hank Paulson telling us that quick action is imperative to avert imminent disaster while others are expressing skepticism about the immediacy of the problem and the cost-effectiveness of the plan considering the scale of the taxpayers' commitment. And of course we have those who are politicizing this issue, either criticizing or cheerleading the plan, depending on their own agendas. From the caliber of questions I saw being asked yesterday in the Congressional hearings, the average Congressman has as firm a grasp on the issue as a caveman has on Avagodro's constant (top of page). Thanks to Steve H. for bringing up this number. Don't ask.

How will a bailout or lack of a bailout affect the Cocoa Beach and Cape Canaveral real estate market? To be honest, I'm having trouble sorting out the possible impact. I've listened to the brain trust on CNBC parsing the plan and I've read as many commentaries as I could cram in between taking care of everyday business and I'm stumped. I want to believe that the smart guys in control will fix everything but then I remember that it was the smart guys who got us in this mess. Meanwhile, in Cocoa Beach and Cape Canaveral, MLS activity is steady but slow despite the doomsday rhetoric on the tube with 27 closed residential sales so far in September. While I continue to absorb info and postpone opinion, I think I'll walk over to Coconuts on the ocean for a seared tuna sandwich and watch the waves. Armegeddon can wait.

The drop below 6% for mortgage rates didn't last very long and the nationwide average is well off it's brief low of last week.



There are no new listings or price drops in the past week that I think worth mentioning other than a direct ocean 2/2, 2nd floor unit with a wide-open view in south Cocoa Beach for $282,500. The 2nd floor direct ocean 2/2 at Waters Edge is, remarkably, still available at an asking price of $219,000. Someone picked off a 2nd floor, 2/2 south view at River Lakes for a shocking $162,500 and a top floor A building Mystic Vistas unit is under contract for less than some of the auction prices back in May in the C and D buildings.

"The sad truth is that opportunity doesn't knock twice. You can put things off until tomorrow but tomorrow may never come. Where will you be a few years down the line. Will it be everything you dreamed of? We seal our fate with the choices we take, but don't give a second thought to the chances we take."
__Gloria Estefan