Warm, green and fuzzy

This post is a little off the usual subject but relevant. For sellers and listing agents; You may want to occasionally visit your property if no one is living there as bad things sometimes happen to vacant property. Of particular concern is keeping the air conditioning set low enough (and making sure it's working) during the warm months to prevent mold and mildew. The photo at the left is from a very nice oceanfront condo that has an asking price of  $400,000. Apparently no one has been inside in a while. The AC is either not doing it's job or it's been set high to save a few dollars on electricity. In either case, the green fuzzy stuff you see on those utensils is mold prospering in the warm, damp conditions. Check your vacant properties often. Speaking of warm and damp, that's exactly the conditions this morning in Cocoa Beach as we are getting the blustery outside rain bands of Tropical Storm Isaac hundreds of miles away in the Gulf.

“The difference between stupidity and genius is that genius has its limits.” - A. Einstein

Dog days and mortgages

Nine of the 24 condos closed so far in August were on the market for less than a month. This is the new normal in our market. One quarter of the closed units sold for less than $100,000 and only three sold for more than $233,000 including a mack-daddy penthouse unit at Ocean Club with 4565 square feet and 20' ceilings that sold for $800,000. Of the 24 sold units, five were distressed. In a radical departure from the trend of the last few years, cash sales lagged financed purchases. Fifteen of the 24 condo purchases were financed and only nine sold for cash.

Lowest price for a direct ocean unobstructed view was $192,000 for a 4th floor Wellington 2/2 in downtown Cocoa Beach. Only 1049 square feet and open parking, BUT, 4th floor direct ocean within a few blocks of over two dozen restaurants and the post office and library for less than $200,000.

A foreclosed, 2nd floor, direct ocean Boardwalk 2/2, also in downtown Cocoa Beach, closed for $231,900. Not a bad price for 1296 square feet and a garage and the ability to rent weekly.

Also in downtown Cocoa Beach, a fully furnished and nicely remodeled 2nd floor Ocean Pines direct ocean2/2 with 1353 square feet and garage closed for $300,000. Note that the selling prices of these units varied in dollars per square foot by around 20% at the extreme.

A new ten year low price at Emerald Seas recorded at $225,000. This was for a direct ocean 2nd floor 2/2 with 1602 square feet. Partially obstructed ocean view from the 2nd floor here because of all the palm trees but still quite a deal, in my opinion, at this price in this complex.

Another 2nd floor direct ocean unit, this one at Mystic Vistas (A building), closed for $280,000. Even less of an ocean view here because of the row of townhomes between the building and the ocean but still a nice 8 year old 3/2 unit with 1775 square feet and garage. Sold fully furnished.

A Spanish Main weekly rental 2/2 on the 2nd floor with direct ocean views over the pool closed for $180,000. This unit unlike many Spanish Main units has a garage. The seller financed part of the purchase price.

A foreclosed south facing 1st floor Royale Towers C building 2/2 closed for $158,000 with 1374 square feet and a garage.

A Royal Mansion 2nd floor 1/1 weekly rental unit with a decent ocean view closed for $147,000. We saw six of these 1/1 units sell below $100,000 in 2010 and 2011 but of the three closed so far this year, the lowest price paid was $127,500.

Six single family homes have closed so far in the month of August in Cocoa Beach and Cape Canaveral. A 3002 square foot 4 bedroom, 3 bath with a three car garage in Discovery Bay in Cape Canaveral sold for $579,000. This beautifully appointed canal-front home is three years old and has a pool and covered boat dock.

A very nicely remodeled canal-front 4/4 pool home in the Cocoa Beach Country Club subdivision closed for $548,000. It has 2550 square feet and a boat dock.

A remodeled 4/2 pool home on Dorset in Cocoa Beach on a corner of the canal with 140' of waterfront sold for $410,000.

An open water fixer upper 4/2 with 2111 square feet on La Riviere closed as a short sale for $242,000 after six days on the market.

We continue to be locked in our summer pattern of calm mornings followed by afternoon thunderstorms. Temps have remained mild in areas close to the ocean as the afternoon sea breeze off the colder than normal ocean serves as a natural air conditioning system. Turtle nesting and hatching also continues at a very intense pace. While offshore last week I saw dozens of adult and hatchling turtles swimming in the calm Atlantic. Some areas of the beach have so many nests that the beach appears to have been the scene of a tractor pull.

"Morality is doing what's right regardless of what you're told.
Obedience is doing what you're told, regardless of what's right."
__________Unknown

July sales

Condo sales in Cocoa Beach and Cape Canaveral slowed significantly in July. After 68 closed sales in May and 62 in June we finished July with only 37 MLS-listed condos and townhomes closed in the month. Single family homes were stronger with 13 closed, two in Cape Canaveral and eleven in Cocoa Beach. Of the 50 total closed residential sales, 12 (24%) were distressed, ten short sales and two foreclosures. There are 286 condos and townhomes for sale this morning and 43 single family homes. There are two foreclosure homes for sale and zero short sales or 5% of the total distressed. There are 18 short sale condos and 21 foreclosures making distressed condos 14% of the total for sale condo inventory.

Sales of note included;

Two Meridian direct ocean units, both 2nd floor. One was an interior 3/2 with 2072 square feet that sold for $580,000. It sold new in 2007 for $672,900. The other was a corner 3/3 with 2487 square feet that closed for $700,000 after just 5 days on the market. It sold new in 2009 for $735,000.

The last unsold unit in the Ocean Paradise building in south Cocoa Beach. This was the 2nd floor NE corner, 3/3 with 2444 square feet and a 2 car garage. Sold for $507,500. If memory serves me right they were asking close to a million for this pre-construction.

Another south Cocoa Beach complex, Magnolia Bay direct Banana River 3rd floor corner 3/3 with 2552 square feet and a 2 car garage closed for $435,000.

Again in south Cocoa Beach, a very nicely remodeled Constellation 2nd floor direct ocean 3/2 with 2126 square feet and a 1 car garage closed for $365,000. This one had been on and off the market for six years beginning at $975,000. When the price finally got down to $380,000 in June they had an accepted contract in 15 days. There's a lesson here.

A Royale Towers B building direct ocean 2nd floor Sand Dollar 2/2 with one car garage sold for $280,000.

A fully furnished "A" building Stonewood direct ocean 4th floor 3/2 with 1588 square feet and one car garage closed for $275,000. The "A" building is the one on the right that looks over the pool to the ocean.

A foreclosed Solana Shores side ocean view 3/2 with 1921 square feet and a one car garage sold for $257,500 after eight days on the market. It had previously been offered as a short sale at steadily dropping prices from $314,000 to $289,000 for over a year without any takers.

Another Royale Towers direct ocean A building 6th floor Sand Dollar 2/2 closed as a short sale for $250,000. It last sold for a shocking $510,000 in 2005 by an owner who doubled his money in three years. Ah, those were the days. This particular contract was taken out in the first right of refusal process by another RT owner.

A tastefully remodeled and fully furnished 3rd floor direct ocean Wellington 2/2 in downtown Cocoa Beach closed for $250,000. It had 1049 square feet and no garage.

Another unit in the resurrected riverfront building behind Sunset Cafe (don't know if they've decide on a name for this condo) sold for $238,000. It was a 3rd floor 3/3 with 2084 square feet and a one car garage.

Yet another Royale Towers unit, this one in the south facing C building closed for $220,000. It was a remodeled and fully furnished 3rd floor 2/2 with 1256 square feet and a one car garage.

Another 3rd floor Wellington, this one the SE corner 2/2 with 1139 square feet and open parking closed for $199,900 after 25 days on the market.

Three units closed in July in the weekly rental Chateau by the Sea next to the Cocoa Beach Pier. Two were ground floor 2/2 units, one a direct east facing with 910 square feet that closed for $190,000 and the other a south facing with 844 square feet that closed for $153,000. A third floor south facing 2/2 with 910 square feet closed for $173,000. All were fully furnished and none had a garage. Of note here is that two of these contracts were taken away from the original buyers by another owner in the first right of refusal process.

A very nicely remodeled ground floor direct Banana River Waters Edge West in south Cocoa Beach closed for $215,000 fully furnished. It was a 3/2 with 1445 square feet and a one car garage.

A fourth floor furnished canalfront Commodore 2/2 NW corner with 1234 square feet and one car garage closed for $175,000.

A top (5th) floor Puerto del Rio sold as a short sale for $173,000 after just four days on the market. It sold new in 2007 for $390,000. It is a 3/2 with 1852 square feet and a full 180 degree wrap balcony and one car garage.

A first floor direct ocean Canaveral Sands 2/2 with 1222 square feet and a one car garage sold for $171,500 after being on the market since early in 2009.

An eleven year old Minutemen Villas 4/4 townhouse on the Cocoa Beach golf course sold for $150,000.It had 1564 square feet and a 2 car garage.

A direct ocean 2 bedroom 1.5 bath North Triton Arms with 1088 square feet in downtown Cocoa Beach closed for $145,000 after 11 days on the market.

A 6 year old Oak Park townhome with 4 bedrooms, 2.5 baths and a 2 car garage closed as a short sale for $140,000. It sold new for $349,900 in 2006.

A south ocean view 2nd floor Siesta del Mar short sale finally closed for $130,000. It has been for sale since January 2008 and has had multiple buyers with accepted contracts along the way but for various reasons, mainly the bank's slow pace, they all walked.A buyer finally went the distance and after waiting just five months this time was able to close. I'm sure the neighbors are relieved.

Somebody got a smoking deal on a short sale 6 year old, 2nd floor Portside Villas 2/2. Closed for $80,000. It has cathedral ceilings and 1211 square feet. No garage. Sold new in 2006 for $224,900.

Two 672 square foot 1/1 units at Starbeach in Cape Canaveral closed for $40,000 and $43,000.

A foreclosed Cape Shores 2nd floor 2/2 with 1038 square feet sold for $62,900. No garage.

Five canalfront single family Cocoa Beach homes closed in the month at prices between $299,000 for a short sale with tiny waterfront on Indian Creek needing work to a remodeled 4/2.5 on Jamaica with pool, boat dock and tiki bar that closed for $365,000. Lowest single family sale was $135,000 for 1404 square feet needing a lot of work. Several nice non-waterfront homes closed between $165,000 and $215,000.

With the tight inventory most good listings that are priced anywhere within reasonable range are selling quickly. If you're looking, get your criteria as defined as possible and be prepared to move quickly when a good one appears. If you plan to buy with a mortgage, talk to your lender before you begin the search. Be aware that at least one of the biggest mortgage lenders is failing to meet deadlines at an alarming rate. Local lender is almost always better than an out of state lender even if that out-of-stater it is your brother in law. Also, be aware that first right of refusal is being exercised a lot recently especially in a few certain complexes. Your buyer's agent, if he's good, will know which complexes I'm talking about. If you need a good buyer's agent call me. Buzz words today: shade, breeze and liquid refreshment.

"Fertile's the word."  ___Matthew McConaughey (expecting his third child)

Yikes - Back to school

Surf school session behind Coconuts at Minutemen Cswy.

Just hearing those words puts a knot in any student's stomach unless you're talking about surf school. We've only got a few days before first day of school, Wednesday August 8 for most Brevard County students. We are lucky in Brevard County to have highly ranked schools. Among Florida's high schools, four of Brevard County's are in the top 50 with three in the top twenty, according to USNews and World Reports. 

They are:

Edgewater Junior/Senior High - Merritt Island - # 6 in Florida and #43 nationally
West Shore Junior/Senior High - Melbourne - # 9 in Florida and #64 nationally
Cocoa Beach Junior/Senior High - Cocoa Beach #18 Florida and #188 nationally
Satellite Senior High School- Satellite Beach - #45 in Florida and #794 nationally

To put these rankings in perspective this is out of 990 Florida high schools and just under 22,000 nationwide. The top three on our Brevard list have been awarded the gold medal as best schools in their categories nationwide. Only 30 schools in the nation received this designation.

As of this writing I'm not aware of any rankings of surf schools but based on my casual observations this summer, our local surf schools would probably rank higher than our high schools. They have churned out a healthy quantity of stoked young grommets this year judging from the smiles on the young faces. See the photo above of a class carrying their boards back from a morning session. Look for the lineups to be crowed into the foreseeable future.

"The important thing is not so much that every child should be taught,
as that every child should be given the wish to learn." __John Lubbock

Going for the gold

Thunderstorm over the Cocoa Beach golf course

Multiple offers have become the new normal in our market. I submitted an offer on a short sale Cocoa Beach canal home last week. There were 12 offers in the first five days with $10,000 above asking not being enough to win. Of four houses I planned to show yesterday two had contracts between Thursday and Friday, one of those receiving three offers. A third of the condos closed so far this month in Cocoa Beach and Cape Canaveral and almost half of the single family homes were on the market less than a month before going under contract. A couple of things are contributing to this. There seem to be a lot of buyers who were waiting for prices to bottom or stabilize who have now begun actively offering on properties. Add that increased demand to the depleted supply and, Voila, multiple offers on any new offering that's priced right.

Another shift in activity is increasing numbers of condo sales in the higher price range. In the first three months of the year 19 condos closed for more than $300,000. Since April 1 we've seen 29 closed units over $300,000 with eight of those over $500,000. Meridian has been a large part of that activity with seven units selling in 2012, all over $520,000. Other active luxury buildings in 2012 include Constellation and Villa Verde with five sold units each and Magnolia Bay with twelve.

This morning there are a total of 291 MLS-listed condos and townhomes for sale in the two cities and a mere 47 single family homes. Those looking for a river or canal home in Cocoa Beach have but 21 from which to choose. Lowest price for a livable waterfront home is $261,000 for a tiny 3/2 with a view of commercial property across the canal. Of the total residential inventory (condos and homes) 12% are either short sales or a foreclosures. That number was 56% two years ago.

We experienced a pleasant weather phenomenon yesterday, one that happens every so often in the summer. After a few days of west winds the warm surface water near the beach is pushed offshore and the cold water underneath moves in to take its place. The result for us is natural air conditioning as soon as the sea breeze kicks in. While the rest of the state and country was sweltering we were enjoying a cool breeze in the low 80s off the ocean under beautiful blue skies. The photo at the top was from last week, another normal weather pattern for us in the summer, afternoon thunderstorms. Eight more days until lobster season.

"Stay thirsty my friends." __The most interesting man in the world

Short sale timelines

Earlier this year real estate grunts were pleased to hear that some of the big banks were going to streamline their short sale approval process. This was welcome news to me as dealing with the prolonged, nonsensical short sale process is one of the most frustrating parts of a buyers agent's life. Alas, it was not to be, at least not the intended result. The process may have been streamlined somewhere behind the lenders' curtain but out here on the front end, the period from contract to closing appears to be taking longer than ever.

I pulled stats for all closed residential short sales in Cocoa Beach and Cape Canaveral since May 1, 2012. There were 21 short sale condos, townhomes and single family homes closed in the period. Two of the 21 were previously approved and both closed in one month from contract date. Of the remaining 19 sales, the average time from contract to closing table was 118 days. Longest time was 270 days and shortest for a not-previously-approved sale was six weeks. Half took four months or longer.

Best case scenario for a buyer hoping to purchase a short sale is to find a property with an approved price that another buyer has walked away from. In the event of an unapproved sale, be prepared to wait for months often with no progress reports along the way. Buyers and their agents are at the mercy of the listing agent and getting status reports from some of them is akin to pulling teeth. I am in the fourth month on one short sale right now. Contract was submitted to the listing office first week of March with proof of funds with the contract which is normal with a cash offer. Six weeks later they informed me that "we are getting there" and asked for a more recent proof of funds. One month after that I am told "we are moving in the right direction". I ask if there is something more specific I can report to the buyer. Answer: "Yes, Once a processor has been assigned (next week, hopefully), the end will be in sight." One week later (eleven weeks in) I get a message that the BPO is being done. Five weeks pass with no contact from listing agent. I ask for another progress report. Listing agent informs me (16 weeks since initial contract) that she was told by the title company that we "should" be there in another 45 days.

As always with short sales, we're ready to close but our search for a property continues while the bank picks its nose.

"Not all information is beneficial." _____Ben Bernanke

Terminal velocity [updated]

Reported MLS condo sales for June continue to trickle in as the listing agents get around to closing their listings. As of this morning the total stands at 61 closed MLS-listed condos and townhomes in Cocoa Beach and Cape Canaveral for the month of June 2012. That's on the heels of May's 66 closed sales which was the busiest month since 2005. In fact, three of the top five busiest months of the last 81 months have occurred since March this year. Sales in the $300,000+ range have been helped in large part by ten closed sales this year at Magnolia Bay in south Cocoa Beach. Meridian on the ocean in north Cocoa Beach has been active as well with six closed sales this year at prices between $521,250 and $599,000.

Inventory of condos and townhomes in Cocoa Beach and Cape Canaveral today, July 12, 2012, stands at 283 units or 73% off the high of 1049 units for sale in November 2006. There are 31 units asking less than $100,000. That's the same number of sub-$100K units that have closed in the last eight weeks. Distressed sales are at 13% of the current for sale inventory with about a third, eleven, of those in the Pier Resort. Asking prices in the five year old building are $188,000 for the 1900 square foot 3/3 units and $299,000 for the 3400 square foot 3/3s.

Activity on the ground hasn't changed much in the last month. I'm seeing lots of multiple offer situations when priced-right new listings appear. I'm also seeing a greater occurrence of failed offers than in the past as buyers expectations have lagged the market reality. Buyers of real estate in our small market, in most cases, are going to have to accept that the super low closed price of a comparable unit earlier this year or last year may not be repeated in this cycle. I said this before but it bears repeating. The bottom in most condo complexes will be represented by a single sale. Clinging to the hope of matching or bettering that $150,000 Mystic Vistas sale from two years ago has, so far, been fruitless. So has finding another 2/2 Sandcastles for $140,000. I'm confident in predicting that these sales will not be matched or bettered anytime in the near future. There are dozens of other complexes where, like these two, the bottom sale has probably already occurred. This is, of course, my opinion. I could be wrong. Be aware that if you are holding off on a purchase because you think prices are headed lower that you're going to have plenty of competition if that comes true.

[update] To expand on the reader's comment about the lack of detail in the tax record; The property appraiser does attempt to code and identify transactions that are not normal sales. There are over 40 codes for things from "atypical amount of personal property" to, as in the mentioned sale, "transaction between affiliated parties/family/corp." List of all disqualification codes here. For stats on this blog, unless I state otherwise, I use only MLS sales as there is more (still not 100%) transparency. Even with MLS sales, if a sale looks abnormally high or low, there is probably more to the story than the numbers reflect. We've seen developers record sales at numbers higher than the actual selling price by giving buyers a decorating credit at closing. We see other sales record at lower than actual selling price when personal property/furnishings get broken out of the contract and assigned an above market value on a bill of sale. That is one of the reasons that just one comp is not enough to establish fair value. Your single cherry-picked comp justifying your otherwise crazy asking or offering price means nothing to an informed party. If it doesn't look right, it probably isn't. [update]

Take-away: Be realistic about your expectations if seriously hoping to purchase in our market. Prices have not jumped significantly in most cases and, for someone who wants a Cocoa Beach getaway, purchasing slightly above the rock bottom will probably have little impact on the enjoyment of toes in the sand. I would also advise care in internet research. There is a lot of misinformation out there. Recorded sales prices don't always tell the whole story and claims on agent websites are sometimes misleading and always self-serving. The best deal in Florida real estate is free. It's a well-informed, experienced buyer's agent with no connection to the seller. Buyers of Florida real estate would be well-advised to find a buyer's agent they can trust and following his lead.

Today's buzz words; hydration, sunscreen and speed limits. Forget any of them at your own peril.

"I have made this letter longer than usual because I lack the time to make it shorter." ____Blaise Pascal

June property sales

Today is the last day of June and most (but not all) MLS sales for the month have been posted. Single family home sales were very strong with 11 closed sales in Cocoa Beach and Cape Canaveral. Over half the homes were on the market less than 55 days. Five of the eleven sold for cash and seven were waterfront. Four were short sales and none were foreclosures. One of the short sales took only 35 days from contract to closing table. The longest took seven months to wade through the process.

We are left with 45 single family homes for sale this morning in the two cities. Of those, 27 are waterfront and zero are distressed (short or foreclosure).

It was another banner month for condo sales as well with 55 closed sales recorded as of this morning. Of those, 13 were short sales or foreclosures. Twenty sold for $100,000 or less and two closed for more than $500,000. 29% were on the market less than a month before selling.

Our MLS condo and townhome inventory is at 281 total units for sale in the two cities. Six of those are pre-sales in a proposed building. 27 units are asking over $500,000 and 28 under $100,000. Guess which ones will be gone first. Two thirds of the condo listings are in waterfront complexes. 12% of the total (34 units) are distressed with 11 of those in the Pier Resort.

There are 126 condo units currently under contract, half of those distressed.

We are seeing closed prices notching up in a few complexes. It seems a natural response to the supply and demand dynamic that is exerting itself once again with the abnormally low inventory. The disappearance of large numbers of distressed listings is also contributing. This may not be a duck but the waddling and quacking is beginning to look rather duckish.

While most of the country has been sweltering in the triple digits, Cocoa Beach has had a wonderful stretch of balmy weather after Tropical Storm Debbie passed over the state. Judging from the number of tracks I'm seeing on the beach, this looks to be a busy year for sea turtle nesting. Remember to turn your beachside lights off by 9 PM and make sure no light from your dwelling is visible from the beach distracting nesting turtles. I hope everyone enjoys the upcoming holiday and is safe. Hydrate and use your sunscreen. Cocoa Beach fireworks are on Monday the 2nd rather than the 4th.

"Do I contradict myself? Very well then I contradict myself. I am large, I contain multitudes." ____Walt Whitman