Revisiting Zillow

The Brevard County Property Appraiser is giving some property owners in Cocoa Beach a huge discount on their property tax. Yesterday I began one of my periodic checks of Zillow and the Property Appraiser to gauge the accuracy of their estimated market values compared to actual selling prices of recently sold Cocoa Beach properties. In past exercises both Zillow and the PA were wildly off in their estimates. This time around Zillow performed better but the Property Appraiser was still way off.

First Zillow. To start my comparison I printed the first page of recently recorded condo sales over $50,000 in Cocoa Beach from the Property Appraiser's site. Of those 25 sales, I chose not to include ten because of type of transfer or suspicious prices. I then searched Zillow for those 15 remaining sales and was able to find ten. Of those ten, Zillow's estimated value was within 13% of selling price on the date of the sale for all. That's much better than their performance when I checked in October of last year. Selling prices of four properties on last year's list were from 20% to 99% higher than the Zestimate.

Does the improved accuracy make Zillow a useful tool for buyers or sellers? Not really. Of the ten recent sales, six sold for more than the Zestimate and four for less. A buyer or seller looking at the Zestimate has no way of knowing where it lands within the deviation. Our list of ten included one that had an estimated value 13% higher than selling price and one that was 17% below actual selling price. To be fair, property sellers' guesses of fair value are usually worse than Zillow but at least they are consistently on the high side.

Now to the Property Appraiser and the great deals that office is giving property owners. Of the 15 recent sales that I used, the PA's market value averaged just 73% of the selling price with a couple under 60%. Even some non-homesteaded owners were enjoying tax discounts in the year of sale of as much as $2500. There is a possibility that some buyers, depending on date of closing, may be able to lock in an "assessed value" at the highly discounted number. If they do and homestead the property, the Property Appraiser will be limited to annual increases of value of 3% or less. Homesteaded properties in Florida can only have their "assessed value" increase by the lower of 3% or the CPI rate for the previous year. In the last ten years the CPI has exceeded 3% only four times. The PA's approach with market value according to their mandate is to estimate "the most probable price which the property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently and knowledgeably, and neither being under duress to act, and represents the estimated net proceeds to the seller." This means the "market value" should be a number reflecting what a seller will walk away with after selling expenses not including paying off any debt.

This discrepancy in valuations will likely correct over the next couple of years. At any rate, for now, Hooray for our side and for owners who are benefiting from the glitch. There may be a few owners of under-valued second home properties who are ready to move and in a position to transfer their homestead and take advantage of the situation.

"A man who says he is willing to meet you halfway is usually a poor judge of distance." ____Unknown

The Last Hoorah

The roads into Cocoa Beach are jammed this morning with beachgoers arriving for the last official holiday weekend of summer. The NKF Rich Salick Pro/Am Surf Festival  is under way at the Cocoa Beach Pier which should help keep a large part of the crowds away from the downtown beaches and further south. As always, in south Cocoa Beach even a holiday weekend doesn't make for crowded beaches. Our secret? Zero public parking. Being out of the city limits, there are no parking spots for day trippers. The ocean is calm and loaded with bait pods close to the beach and the bigger fish that follow and feed on them. Those giant explosions around the bait pods are big tarpon, kingfish, snook and sharks. On another topic, the space station has been extraordinarily bright in the sky this week as it passed about 258 miles overhead at 17,100 MPH in the early evening.

August property sales jumped in the last week of the month with 56 MLS condo sales recorded so far in the month in Cocoa Beach and Cape Canaveral. Fourteen sales were for $300,000 or more. Interestingly the three highest priced units were riverfront not oceanfront. Eleven units sold for less than $100,000. Twelve of the 56 were either short sales or foreclosures. In Cape Canaveral in one complex, a foreclosure and a short sale unit closed one day apart. Identical floor plans, the short sale in good condition, the foreclosure needing work. The foreclosure unit was listed for $39,999 but sold for $55,800 after multiple offers pushed the price up. The much nicer short sale unit closed for full asking price, $48,500.

A short sale direct ocean corner with 2700 square feet in the troubled Almar building in south Cocoa Beach closed for $370,000 as a short sale. It sold new in 2006 for $760,000.

The smoking deal of the month has to go to the brave soul who purchased a five year old direct river unit at Garden by the Sea in south Cocoa Beach for $275,000. Three bedrooms, three baths, three half baths, 2405 square feet and a 2 car garage. The majority of the nine units are held by only two parties hence the "brave" part of that comment.

There are 251 condo units and 58 single family homes currently for sale in our two cities. Ten percent of those are distressed, either short sales or foreclosures. In 2013 we are well ahead of every one of the last eight years in number of properties sold through August. With inventory at such a low level I don't see how this can continue for much longer. Maybe the increasing prices will encourage more owners to put their properties on the market.

Enjoy your Labor Day weekend, drive carefully and check your feet for tar when you come off the beach. A little baby oil and a paper towel will get it right off. It's much more difficult to remove after it's been ground into the carpet in a car.

Procedure for engine failure during flight

Step one: CONTINUE TO FLY THE AIRPLANE
note: this may not apply to ejection-equipped aircraft or to parachute-wearing pilots

Dog Days on Fire

Since I wrote the last post about July sales, four more sales of condos have recorded which makes the 70 units sold in July 2013 the biggest July for condo sales in Cocoa Beach and Cape Canaveral since 2004. More July sales than the peak years of 2005 and 2006. That's shocking considering that we have about 900 less units for sale than in those years. Go figure.

So far in August another 29 units have closed as of this morning. The highest price paid was $750,000 for a 5 year old direct river penthouse corner 4/4 with 4299 square feet at the West End building behind the Sunset Grill.

A south facing 4th floor Michelina 3/3.5 with 2325 square feet closed for $425,000.

A north ocean view tastefully remodeled 4th floor Ocean Oaks 2/2 in Cape Canaveral with 1723 square feet and a one car garage closed for $390,000.

A fully furnished 3rd floor direct ocean Emerald Seas 2/2 with 1602 square feet and a one car garage sold for $326,000.

Another developer-owned Magnolia Bay 2nd floor, 3/3 with 2183 square feet and a one car garage closed for $325,000.

A 4th floor direct ocean partially updated and good condition Sand Dollar 2/2 with 1394 square feet in Windward East with a one car garage closed for $300,000.

In Hacienda del Mar in south Cocoa Beach a furnished 2nd floor direct ocean 2/2 in original condition with 1273 square feet and a one car garage sold for $280,000.

The smoking deal of the month was in the Garden by the Sea direct river building in south Cocoa Beach. This six year old 2nd floor 3/3.5 corner unit had 2405 square feet and a two car garage. It closed for $275,000. That killer price came with a bit of risk as the majority of the units in the building are still unsold.

A remodeled and fully furnished 2 bed, 2.5 bath townhome with 1151 square feet  in the newer section of Villages of Seaport with no garage closed for $235,000.

Another 8 year old Bayside in Cape Canaveral closed for $230,000. This one was a 5th floor 3 bedroom 2.5 bath with 2032 square feet and a one car garage.

A foreclosed direct river 3rd floor Solana on the River 2 bed, 2 bath with 2055 square feet sold for $230,000.

A fully furnished, direct ocean weekly rental 1st floor Chateau by the Sea 2 bed, 2 bath with open parking in original condition closed for $219,000. It has 910 square feet.

Two villas at Bayport of Cape Canaveral closed for $218,000 and $220,000. One was 3 bed, 2.5 bath and the other 4 bed, 3.5 bath. Both had 2 car garages.

A three level direct ocean penthouse Sunrise Tower 2 bed, 2 bath with 1457 square feet and a one car garage sold for $190,000. It needed work.

A ground floor nicely remodeled and fully furnished canalfront Beachwalk 2/2 with 1014 square feet in Cocoa Beach closed for $185,000. It has a one car garage and a deeded boat slip

Another of the bank-owned Pier Resort 3/3 (3rd floor) units has closed. Like most of the others, it has 1900 square feet and a one car garage. Closed for $169,100.

A 1st floor foreclosed direct ocean Canaveral Sands 2/2 sold for $165,000. One car garage and 1222 square feet.

One of the Diplomat 2 bed, 1 bath units sold for $120,000. Open parking, 750 square feet and original condition.

A 5th floor south facing unit in the north Twin Towers building closed for $115,000. Two bed, 2.5 baths in original condition with a carport.

A 900 square foot direct river 1st floor Fountain Cove 1/1 in original but nice condition with a garage sold furnished for $112,000.

A non-waterfront Four Seasons 2nd floor 2/2 with garage sold for $110,000.


A ground floor direct river Seminole Landings 3/2 with 1498 square feet sold as a short sale for $105,000. Don't get too disappointed at missing this one. Was moldy and needed a lot of work.

Two 2nd floor Dolphin Beach updated 1/1 units with a view of the ocean sold for $70,000 and $68,500. Open parking and 735 square feet. The lower priced unit sold furnished.

A ground floor Roosevelt Gardens 2/1 with 671 square feet and open parking sold for $42,500. Needed work.

Two other small Cape 1/1 units sold for $41,900 and $29,500.

I've long been advising buyers who are buying property here to use a local lender, especially for condos. A recent experience with one of the "region"al banks in our county has spurred me to qualify that advice. Just choosing a local lender does not guarantee a good experience. You might be unlucky enough to get a bad loan officer at a good bank. There are incompetent loan officers walking among us and they look just like the good ones at first glance. Ask someone for a recommendation based on a positive experience before you choose your lender and loan officer. Even with a good recommendation, it is prudent to maintain constant contact with the lender and to demand constant status reports. Sometimes the explosion happens before anyone notices the sizzling fuse.

On a positive note, the fishing right off the beach is on fire. Tarpon, snook, kingfish and other big predators are shadowing the plentiful bait pods up and down the beach.Conditions are such that they are easily caught from a small boat out of Port Canaveral or a kayak off the beach. A friend caught two sailfish in 40 feet of water off Cocoa Beach last Saturday.

"I know there are other errors but unless I'm being graded or paid I'm not trying to be perfect." ___CMO_Ratchet

Sizzling July

I'm more than a little surprised at the number of MLS-listed condos and townhomes that closed in the month of July in Cocoa Beach and Cape Canaveral. With a record low number of units for sale, somehow, 66 units were picked off and closed in the month. Our inventory now stands at 245 existing units actively for sale in the two cities with another 17 optimistically being offered in buildings that are but drawings on paper and dreams in the minds of the developers. At the offering prices of units in these two buildings, it seems unlikely that construction will begin anytime soon. I could be wrong.

Anyone hoping to pick up a deal on a short sale or foreclosure direct ocean condo has a grand total of three from which to chose. Two of those are unlikely to attract much attention in the condition and building they're in. Again, I could be wrong. There are 33 total short sales and foreclosure condos for sale right now.

Interest in attractively-priced new listings remains high and good units are under contract usually within a few days. Multiple offers are still common. The brouhaha over the new MLS has subsided somewhat as the crybabies have cried themselves out and realized that the new system is actually a great improvement over the old one. There are still some glitches as the data are migrated and criteria are tweaked to our needs but overall, I'm liking the change. The login for the public is now BrevardMLS.com so get rid of your old link if you have one saved and give the new system a try if you haven't already.

Weather has been typical for mid-summer except for a few cool days last week. This morning Tropical Depression Dorian is sitting directly off our coast and predicted to move east into the Atlantic bringing us nothing more than rain and cooler temps. I'll take it. If anyone needs help with the new MLS or a bulldog to represent their best interests in making an offer, I'm here to help. Larry@southcocoabeach.com

"Just goes to show that the ability to be a complete moron who eats confirmation bias for breakfast has no fixed place on the political spectrum." anonymous

Change Has Come

That loud whining sound in the air this last week was the sound of hundreds of distraught Realtors in Brevard County moaning and complaining about our powerful new MLS system. The majority, however, have embraced the new system and are working through the transition despite having to learn new software on the fly while conducting normal business. It has been challenging. Consumers going to BrevardMLS.com will now be directed into the new system. Don't despair on the first visit. It's fairly intuitive but if anyone has questions I'll do my best to assist. One powerful new feature is a custom portal into the MLS where favorite listings and searches can be saved. If anyone would like one, send me an email Larry@southcocoabeach.com and I'll set it up for you.

Our stats aren't quite as reliable this first week as many listing agents are still trying to figure out how to add and close listings so I'll report on what is showing this morning. According to FlexMLS we have had a total of 47 closed condos and townhomes in Cocoa Beach and Cape Canaveral so far in July 2013. Six sold for less than $100,000 and seven closed for more than $300,000. The two highest sales so far were both at the Meridian oceanfront in Cocoa Beach. These 2072 square foot 3/3 units closed for $650,000 and $575,000.

Two of the 47 were short sales. One was a 3/2 villa with 1507 square feet and 2 car garage at Bayport Cape Canaveral that sold for $205,000. The other was a lakefront Harbor Isles 2/2 in south Cocoa Beach that sold for $130,000.

Seven of the sales were bank-owned. They included;
A 2nd floor 3/2 direct ocean Coral Sands w/garage in south Cocoa Beach for $270,000.
A 2nd floor Pier Resort 3/3 with 1900 square feet and garage for $175,000.
An Ocean Woods Cape Canaveral 2/2 with open parking for $115,000.
A 2nd floor north bldg. Twin Towers 2 bed 1.5 bath w/carport for $104,900.
A 4th floor 900 sf Fountain Cove 1/1 w/garage for $92,000.
A 2nd floor Cape Shores 2/2 with 1091 sf and open parking for $79,900.
A Ridgeview 2/1 w/carport and 756 sf on south Brevard Ave. Cocoa Beach for $53,900.

Our inventory is at an all-time low with a total of 250 active for sale condos in Cocoa Beach and Cape Canaveral showing right now, 24 of those distressed. There may be a few new listings that haven't shown up yet as listing agents are struggling trying to figure out the new system but the trend before the change-over was shrinking numbers so I suspect that the real number is no more than 260. Compare this to almost 1200 listings in late 2006 and early 2007. Construction activity of single family homes is active right now in Cocoa Beach with several new homes slated to start shortly in addition to those currently being built.

Lobster mini-season this past week was successful with some of the biggest shallow water bugs caught in recent years. Those pictured were caught from a beach dive in Indian River County. Tarpon and other big predators are thick around the huge pogie schools off Cocoa Beach right now. They are easily reached by small boats from the Port or by kayakers from the beach in our calm summer ocean conditions. Remember the sunscreen and stay hydrated. Tropical Storm Dorian is approaching from the east but not expected to bring much impact to us. That could change.

"Why would I lay up now that I'm rich? I didn't do that when I was poor." __Angel Cabrera

Better Best and Highest

The seemingly missing comma in the title is not an error. Read the last part of this post and it will become clearer.

Halfway through July and property sales in Cocoa Beach and Cape Canaveral are ticking along at a heated rate. Of the 26 reported closed condos and townhomes so far in the month two went for more than a half million, both at Michelina, $600,000 and $575,000. Another high sale was a 2nd floor northeast corner at Villa Verde in the same stack as the collapsed 4th floor balcony in April. It has 3 bedrooms 3.5 baths, 2512 square feet, 2 car garage and closed for $395,000.

Shorewood in Cape Canaveral has been active with three closed sales of non-direct units at prices between $202,000 and $245,000.

One of the last bank-owned Pier Resort units closed for $170,000. Side peek of the ocean with three bedrooms, three baths and 1900 square feet.

A 2nd floor Diplomat 2/1, 750 sf with mild updating sold furnished for $116,000.

Two Bayport villas in Cape Canaveral closed for $205,000 and $240,000, 1507 and 1686 square feet.

A 2nd floor Royale Towers south facing C building 2/2 closed for $202,000.

The highest closing price since 2005 at Beachwalk on the grand canal on Banana River Drive in Cocoa Beach happened this month. A 2nd floor 2/2 closed for $190,000. It had a boat slip with lift and a garage. Several direct water units similar to this have sold for under $150,000 in the last three years. A ground floor direct with boat lift closed in January this year for $128,500. This same story is being repeated at most complexes as prices are ratcheting up with the evaporation of distressed inventory.

Let's revisit multiple offers. I had an interesting encounter with a buyer last week who thought multiple offers should include multiple chances to do "best and highest". It doesn't work that way. Typically in our market, if more than one offer is received at the same time, the listing agent will go back to all buyers' agents and give them the opportunity to bring their best and highest offer to be presented to the seller at the same time. This is risky for the seller as the pervasive distrust of real estate agents means that they run the risk of losing one or all of the buyers. I was involved in one situation where both buyers withdrew their offer when asked to bring their best and highest. The condo ultimately sold to an entirely different person for less than at least one of the first buyers was willing to pay. If your buyer's agent tells you that the listing agent has called for "best and highest" because there are multiple offers, you have three choices.

1. keep your offer exactly the same in hopes of being the winning offer
2. increase your price and/or better your terms in hopes of being the winning offer
3. withdraw your offer because you "don't play games' or believe the agent/s are lying to you

The seller also has choices of how they want to handle the multiple offers once received.

1. They can accept the offer they like best and proceed to closing. Note that the best offer may not necessarily be the highest. Closing date and terms may win out over price.
2. They can choose not to respond to any of the offers if none are good enough.
3. They can counter one or several of the offers. If none of the prices are acceptable to them they can offer the same counter-price to all and accept the first one (if any) to respond. Or, if one is clearly better than the others, they may choose to counter that one alone with a change of price and/or terms.

How a buyer responds when asked for his best and highest offer is entirely his decision. How a seller responds to the offers she receives is entirely her decision. The buyer I mentioned who was upset with the process was bothered that he didn't get a second chance to better his "best and highest" when someone else made a more attractive offer. The seller chose to negotiate with the offer that she preferred. That offer was apparently good enough that she saw no upside to re-approaching the lesser offer. It was her decision to make. Also note that in the event of multiple offers, a seller doesn't have to call for best and highest. She has the right to choose the offer she likes best without giving anyone a chance to do best and highest.

At this stage of our market, multiple offers are the name of the game for any priced-right listing so be prepared for this if you're offering and don't let it deter you from participation. You decide what price and terms you're comfortable with and then hope for the best. You might win just by staying in the game without changing the offer at all. If you don't trust your agent enough to be honest with him, find another one.

"All journalism is advocacy journalism. No matter how it's presented,
every report by every reporter advances someone's point of view."
_______Matt Taibbi

Larry Walker - larry@southcocoabeach.com  - 321.917.5786

How Not to Sell a Condo

Those who've read this blog for any length of time know from my dozens of tales of misbehavior that a good listing agent is more than a Glamor Shot and a snazzy blazer. As a buyer's agent I find myself across the table from plenty of very competent and able listing agents, some of them many times every year. I appreciate them making my job enjoyable and as snag-free as the system will allow. Unfortunately, I am sometimes forced to deal with listing agents who occupy a much lower position on the competency scale.

A listing agent is employed by property owners to sell property. Once hired, if the listing agent is not doing her job well, there is not a good way for the seller to know that. If there's a sign in the yard and the listing is on the internet she's doing her job. Right? Maybe not. No offers? Maybe the market is just not interested in your property OR, maybe, the agent doesn't answer her phone or respond to messages or emails. No showings? Same answer. How's a seller to know? Here's a timeline of a recent encounter with a slacker of a listing agent whose listing my client tried to purchase. Note that often sellers may be hard to reach and responses can take days. Good listing agents will relay the reason for the delay and try to keep the prospective buyer's agent informed along the way in hopes of eventually putting a deal together. That didn't happen this time. This is how NOT to handle an offer.

June 15 - mid-morning - I call the listing agent of a half-million dollar oceanfront condo to ask some questions about her listing. My clients who I've shown the unit to twice are interested in making an offer. The recently sold comparable units don't support the asking price so I'm making the call to discuss the unit and find out if there are non-public comps or details about the unit that would justify the higher asking price. She doesn't answer and I leave a message. There is still no call-back by late afternoon so we go ahead and prepare an offer based on our research of the nearby, recently sold units of similar size and condition. The comps suggest a price of about 90% of the asking and we offer accordingly. I email the offer to her and ask for confirmation of receipt.

June 16 - early morning - I have received no call-back or email so I email again asking if she has received the offer. Living here in the home of manned space flight, the practice of redundancy is firmly ingrained in most of us so I fax another copy to her office, just in case. No response so I call again at 9:30 and leave a message that I had emailed and faxed the offer. She calls late afternoon to confirm her receipt and said she'd present our offer to the seller that night and get back to me.

June 17 - no communication from agent

June 18 - she calls and apologizes for the delay and says she will get the offer to the seller "today". I don't mention that she told me two days ago that she was presenting then.

June 19 - I call and ask if the seller had a response to our offer. She says she is getting with him at 9:30 AM "today" (not the other "today" as promised) and will have a response for us shortly after. Nothing from her after that.

June 20 - Still no word from the agent but I have heard about another unit not yet listed on the MLS that seems perfect for these clients. I make arrangements to see the other unit.

June 21 - I email our MIA listing agent again asking if any word. No response.

June 22 - We look at the unlisted unit, love it, make an offer and reach agreement that afternoon. No contact from the first agent about our now seven day old offer all day.

June 23 - Still no word from the listing agent.

June 24 - 11AM email from the listing agent saying the seller has countered our offer from nine days ago and encourages me to have my clients respond to his counter. I let her know that we have another unit under contract and thank her for her tireless efforts.

Think this is uncommon? Think again. Choose your listing agent carefully. For the record, so no innocent Cocoa Beach listing agents are suspected, this was an agent from further south who has no listings in our two cities, thankfully. Oh, and for the sellers of the three Cocoa Beach and Cape Canaveral condos this morning that are listed by Orlando brokers and appear only in the Orlando MLS and not on the local MLS, good luck finding a buyer. Most of the local buyer's agents aren't even aware that your units are for sale.

Well I guess it ain't easy doing nothing at all oh yeah
But hey man free rides just don't come along every day
____The Offspring

Hands Up and Kick the Checkbook Over Slowly

A one-week move of over a half percentage point in mortgage rates caught everyone's attention this week, especially prospective mortgage borrowers. Freddie Mac reported that the average 30 year fixed rate mortgage increased from 3.93% to 4.46% between June 20 and June 27. That's on top of a similar increase already pressuring mortgage applicants since May 2 when the average rate was 3.35%. In the real world that translates to a monthly payment today for a $250,000 mortgage that's $159 higher than just seven weeks ago. A borrower getting a $250,000 mortgage at today's average rate will pay $1908.000 a year more interest than a borrower of the same amount at the average rate in early May.

Will rates continue their upward trend? No one knows but opinions are abundant. I would normally say do your homework and trust your gut but, in this case, the forces moving rates are too big and complex for a peasant like me to comprehend. Time will tell. In the meantime, inventory of condos and townhomes in Cocoa Beach and Cape Canaveral is back down to 275 total units after briefly getting to 330 units earlier in the year. Median asking price is $210,000. Distressed sales make up 9% of those 275 units with only three of the distressed units asking over $200,000.A total of 52 units (12 distressed) are recorded as having closed in June. At that rate we have but a 5.29 month supply of units for sale.

There are 59 single family homes currently for sale in our two cities with a median asking price of $350,000. Only five are distressed with the highest asking price of the five at $289,900. Nine single family homes are showing as having closed in the month of June. None were distressed.

We are firmly in our usual summer pattern of afternoon thunderstorms and calm ocean waters. Temps have not been unbearably warm and the fishing has been good. As is always the case in summertime, the Cocoa Beach Country Club golf course is wide open, uncrowded and cheap. Tee times unnecessary. We haven't had decent sized waves for a while but there has been a constant small background swell keeping the kids and longboarders satisfied. I'll see you outside. Stay hydrated and don't forget the sunscreen.