Parsing Septembers

A fisherman stalking flounder at Jetty Park, Port Canaveral one beautiful day last week.

With a lot of media chatter about mortgage rates at another all-time low this week my curiosity got me to wondering how much impact the cheap money was having on our current condo sales. Knowing how stringent requirements for condo loans are at the moment, I didn't expect to see a lot of condo sales involving financing even with 30 year fixed rates below 4.2%. The results confirmed my suspicions. Money may be cheap but, for Florida condo buyers, the series of hoops that the lenders are requiring a buyer to jump through has become a test that is increasingly difficult to pass. The chart below is of mortgage rates since September 2007.



In addition to the most recent month, September 2010, I pulled results for the preceding three Septembers to get a feel for the trend in place. In September 2010 there were 34 total closed MLS-listed condo sales in Cocoa Beach and Cape Canaveral. Of the total, 65% were cash sales. The cash deals were scattered across all price ranges. Looking at September sales in the last four years we find that as mortgage rates were declining the percentage of cash sales was climbing. Much, but not all, of that trend is a reflection of the tightening requirements for condo loans during that time. Back in September 2007 cash sales represented only 21% of the total condo sales in our market. It has been on a steady climb since as the chart below shows.



Taking our same four Septembers and filtering for distressed sales, we find that in 2007 there was not a single short or foreclosure sale of a condo in Cocoa Beach or Cape Canaveral as reported by the MLS. Looking at our chart below of the same metric (percentage of distressed condo sales in September since 2007) we see that that percentage has been on a steady increase with 56% of the 34 sold units in September 2010 being either short sales or foreclosures.



The last stat I pulled up was condo and townhouse inventory in Cocoa Beach and Cape Canaveral in each of the four Septembers. Readers of this blog will know that our inventory has been on a steady decline since 2006 with the present number at a record low, 484 units, 19% either short sales or foreclosures. It is interesting to note that even with distressed sales making up only 19% of total inventory, they made up 56% of the total sales last month. You can draw your own conclusions from that anomaly. If you're thinking of pursuing a short sale, know that of the 9 closed short sales in September, four closed in 2 months or less and five took from four to more than six months to close. Tip; all four of the fast closes indicated in the listing narrative that the sale price was "bank approved".



As always, if you'd like a bulldog, well-informed buyer's agent to represent you in the battle with the often-difficult and uninformed sellers, I'm your man. My goal is to get my clients the best possible deal on the best possible property and, as my posts indicate, I do my homework and know my market and I enjoy it. You can email me at larry@southcocoabeach.com

“I don't know what this means. I don't think it means anything.”
_______Eddie Vedder

It's here- Best month of the year

October, my favorite month in Cocoa Beach. We had a two day tropical system that moved out on the last day of September and the sun rose October first on a cloudless, gorgeous day. The storm surf cleaned up overnight and the locals were treated to a day of light offshore winds and classic Cocoa Beach conditions ranging from overhead plus in the morning to chest high perfection as the sun set over the river.

There were 33 condo and townhome sales in the month of September as recorded in the MLS in Cocoa Beach and Cape Canaveral. As always this number will likely creep upwards in the next few days as the ever-tardy listing agents update their sold listings. We had two $500K plus sales in the month, a 1st floor Meridian (actually second floor over the garage) direct ocean, fully furnished 3 bedroom, 2 bath with 2180 square feet and a one car garage that closed for $554,000. It sold just three years ago for $649,900 although that price may have included large concessions by the developer. The Meridian developer was offering significant "decorating credits" to some buyers to prop up the comps as they sold out the project. The other half-million plus sale was, in my opinion, a "smoking deal", a bank-owned 6th floor Ocean Oasis in downtown Cocoa Beach that sold for $535,000 ($162 per square foot). It sold new in 2005 for $935,000. This 6 year old direct ocean unit had 4 bedrooms, 3.5 baths in a spacious 3293 square feet and had a 2 car garage.

September also saw two Stonewood B building units close. One, a NE corner 4th floor, 3/2 with 2170 square feet that closed for $394,500 and a 16th floor, very nicely remodeled 2/2 that sold for $311,500.

A Xanadu 2 story penthouse (16th floor) 2/2 short sale finally closed after being on the market for 666 days. It was in good condition, with 1982 square feet, was furnished and closed for $296,500.

Mystic Vistas in Cape Canaveral was hot in the month with four closed sales from a low of $180,000 to$222,500. Three of the four were short sales and the other was bank-owned.

A four year old Garden Bay direct Banana river first floor, 3 bedroom 3.5 bath with 2350 square feet and a 2 car garage sold for $290,000, a deal in my opinion.

The best one bedroom 2 bath unit in Cape Winds closed for $155,000. This unit was top floor closest to the ocean of the one bedroom units with a sweeping south ocean view. With excellent on-site management in this popular weekly rental complex the buyer has the flexibility of mixing decent rental income with personal use.

A ground floor 3 bedroom 2 bath Harbor Isles lakefront unit closed for $147,500 destroying my bottom call on these units over a year ago. Even my well-developed pessimism was too conservative regarding the decline in this complex. I assumed the amenities, management, and location would insulate this well-run community from the degree of price-retreat we were seeing in other less-desirable complexes. Oh, well. A falling tide does indeed affect all boats.

Of the 33 sold units in September, over half were distressed; 9 bank owned and 9 short sales, a higher rate of distressed sales than we've seen in 2010 as a whole. So far this year there have been 67 closed condo short sales in the two cities and 78 closed bank-owned units out of 355 total closed sales.

Our inventory has dropped below the 5oo unit mark with a total of 492 units this morning although because of end of the month expirations the true number will probably move slightly above 500 in the next few days. There are currently 75 active condo short sales on the MLS and 25 bank-owned units and 76 other distressed sales showing as pending or contingent. Those numbers seem to indicate that the supply of distressed sales is drying up. Time will tell. In the meantime, the mullet run is still on, the north swell is lingering, the sky is cloudless with a slight breath of wind, air temp of 78 degrees and a water temp slightly above 80 degrees, Heaven. I'm out there.

Forget what we're told
Before we get too old
Show me a garden that's bursting into life
____Snow Patrol

30 days hath September

The 18th of September, 2010, the surf is big and sloppy from Hurricane Igor churning past far out in the Atlantic, the fall mullet run along the beach is in full swing and 18 condos and townhomes have closed so far in the month. Two sales exceeded the half million dollar mark, one a three year old direct ocean 3/2 Meridian unit that sold for $554,000, 95 thousand less than it sold for just three years ago. The other was a huge (3293 square feet) 6th floor, 4 bedroom 3.5 bath, direct Ocean Oasis in downtown Cocoa Beach. It closed for $535,000, exactly $400,000 less than the selling price new in 2005.

Other sales of note included:

Stonewood Cocoa Beach, B building, direct ocean 4th floor NE corner, 3/2, 2170 sf, sold for $394,500.

Three year old direct river ground floor Garden Bay 3 BR, 3.5 bath, 2350 sf and 2 car garage. Sold for a song at $290,000.

A five year old, 4th floor direct Banana River Majestic Bay in Cape Canaveral. This super nice 3/2 unit has 1984 square feet and a private 2 car garage. It sold for an unbelievable $205,000. Might go down as the deal of the year in Cape Canaveral.

A four year old, no ocean view, D building Mystic Vistas 3/2 closed for $180,000, a new low number for the complex.

In the "Rip van Winkle" category, a sale finally happened in the ill-conceived three year old Pier Resort complex. This was a 3 bedroom, 3 bath, 1900 square foot unit that closed for $169,900. It sold new in 2007 for $480,000.

The best 1 bedroom 2 bath unit in Cape Winds closed this month. This one was the top floor, closest to the ocean of the one bedroom units, had an expansive southern view of the ocean and closed for $155,000.

Anecdotally, sales activity right now is very brisk for both homes and condos. Looks like we may have a repeat of last year's abnormally strong fall. Inventory continues to contract along with the number of distressed sales. Condo and townhome inventory in Cocoa Beach and Cape Canaveral stands at 523 units this morning.

"A nickel ain't worth a dime anymore."__Yogi Berra

Pictures and numbers

Mortgage rates have continued their plunge. Payments on a $200,000 loan for 30 years are now below $1000 per month. Monthly payments for the same amount for a 15 year fixed is only a couple of hundred dollars more than the 30 year payment was just two years ago.



Condo sales for August exceeded last year's numbers after July's faltering pace. Inventory continues to decline and it seems unlikely that the fall numbers will match last year's which were abnormally high. We'll see. Low prices and low rates have buyers on the prowl but the dearth of good inventory is hampering the search for many.



MLS inventory Sept 1, 2010 Cocoa Beach & Cape Canaveral

Condos, all prices_____541
over $500,000_________56 - 13 sold this year
Single family homes___117
over $500,000_________35

Snook season did not open today as it normally does. Season opening has been delayed until September 16th to allow the population a little recovery from the fish kill during last winter's prolonged cold snap. Surf has been big and sloppy the last few days from the Hurricane Danielle swell combined with hard onshore winds. We expect the swell from Hurricane Earl to arrive by tomorrow. Please be careful at the beach in these conditions. A little one can be swept away in a heartbeat and even strong swimmers can get in trouble with this much water moving around. We lost an experienced surfer last weekend when the swell was peaking. Condolences to his family and friends.

"Squalls out on the Gulf Stream,
Big storm's comin' soon.
I passed out in my hammock,
And God I slept till way past noon."
____Jimmy Buffett

Have I forgotten?

Lake Atlantic on a hot summer morning.

During the events of the last couple of months I may have lost contact with some of you. If I haven't responded to an email or call please accept my apology. I am back in Cocoa Beach now and ready to resume our conversations and/or property research. If you have been waiting on a response from me please contact me again at larry@southcocoabeach.com Again, sorry for the break in communication.

Supply and demand at work

Goodbye, Dad. I'm gonna miss the hot days picking vegetables with you in your garden. I won't forget about always doing the right thing.

Sorry for the gap between posts as I've been away from Cocoa Beach. Not surprisingly, not a lot has happened in the market in recent weeks. The slowing sales trend I noted in the last post has continued into August. The well-picked-over condo inventory is being reflected in the low sales numbers. Anecdotaly, the demand seems to still be there. As of this morning, only 15 MLS listed condos have closed in Cocoa Beach and Cape Canaveral in August. Prices have ranged from $50,000 for a non-waterfront, foreclosed Cape 2/2 condo to $245,000 for a five year old 3/2 Bayport villa with 2 car garage.

Other sales of note included a 7th floor Royale Towers "C" building, south ocean view 2/2 with garage that sold fully furnished for $216,000.

A furnished 2/2 townhouse-style Royal Mansion with a peek of the ocean closed for $180,000. Open parking and on-site management for short-term vacation rentals (40% fee). Note that condo fees for the 2/2 units here is $568 per month.

A direct river ground floor 2/2.5 in Waters Edge West in south Cocoa Beach closed for $166,500. This unit has a big private garage and a deeded boat slip.

A foreclosed, big (1350 sf) 2nd floor, 2/2 Fountain Cove direct river with garage sold for $138,000. This unit last sold in 2005 for $315,000.

Another lakefront Harbor Isles 2/2 has closed for $110,000. This one was 2nd floor with private garage. Only one unit sold for less in this complex in the last ten years. That was in 2001 for $106,000.

Two of the popular Diplomats 2/1 units have closed, one for $85,500 and one for $85,000. These numbers take us back to 2002 levels in this complex.

A cute 2nd floor 1/1 south ocean view Beach Villas in south Cocoa Beach sold for $92,500. Open parking and a big wide balcony with a good ocean view.

I expect the slow sales rate to continue indefinitely as a result of the low inventory. My take on price trends is split. There are at least two stories there. While prices have been holding steady in the older direct ocean units in that sweet $200,000 to mid-$300,000 range, prices in the luxury buildings in the upper range ($500,000+) have continued to erode and I expect that trend to continue.

"I hate to say it but you're so much more endearing with the sound turned off."
_______from "Talk Shows on Mute" by Incubus

July roundup

My expectation of sales slowing in the 2nd half of 2010 seems to have been confirmed by the July numbers as they stand today. After beating last year in all months but one this year so far, July came up short with only 28 sales compared to 41 last year. My take on this is the well-picked-over, smaller inventory is leaving a lot of prospective buyers off the playing field when they can't find a suitable listing in their target property type. I mentioned a couple of posts ago about direct ocean upper floor units in the mid $200 and $300,000 range dominating the condo sales. That trend continued through the end of July with the 9 highest dollar sales of the total 28 fitting that description.

The highest price condo sale of the month in Cocoa Beach and Cape Canaveral was $368,000 for a nicely remodeled, direct ocean, 4th floor northeast corner, 3 bedroom, 2 bath unit at Ocean Pines in downtown Cocoa Beach. Another nicely remodeled 3rd floor unit in the same building closed for $305,000 and a 5th floor, 3 bedroom, 2 bath next door at the 10 year old Palmas Majorca sold for $332,000.

The lowest price for a direct ocean unit in July was $191,500 for a 2nd floor, 2 bedroom, 2 bath foreclosure at Sun Club in south Cocoa Beach. It had no garage and needed work.

Now for a study in contrasts. Someone paid a surprising $295,000 for a 910 square foot, 2nd floor direct ocean, 2/2 with no garage at Chateau by the Sea. Three days later someone closed on a 1568 square foot, 5th floor 2/2 direct ocean Wavecrest with garage in south Cocoa Beach for $276,500. Both units were furnished. Imagine an astute buyer looking for comps to aid in formulating an offer on another unit and finding these two sales closing three days apart at prices of $176 per square foot and $324 per square foot. Which is relevant? Chateau is a weekly rental building which means income possibilities are much greater than Wavecrest. Wavecrest is 11 years newer and in much better condition. I think neither of these sales can be taken alone to form any conclusions about the market. I just mention them as an observation of extremes.

"A bank is a place where they lend you an umbrella in fair weather and ask for it back when it begins to rain."______Robert Frost

Humphrey come home - He's on the way

Good news, bad news. Good news first. Humphrey has been located. Bad news; because he was found wandering late at night by a couple as they were leaving town for vacation, he is presently taking a vacation in North Carolina with two shelties but will be home soon. We are all very happy.