Under the Hood February 2015

How's the market doing? I get this question almost daily. I don't have to look at MLS stats to know that it is on fire. We continue to have more demand than supply and the cold, snowy winter up north is fanning the demand flames.

Since the first of February, 59 units have gone under contract in Cocoa Beach and Cape Canaveral. Total MLS for sale inventory of condos and townhomes in the two cities is 261 units this morning. Considering the current rate of 2.5 units a day going under contract, the supply is likely to remain low.

The Cocoa Beach MLS is showing 69 closed condos and townhomes since January 1 in our two cities and 13 single family homes. Of the 69 sold units, 49 sold without ever dropping the asking price. They closed for an average of 94% of asking and 30 of them sold in a month or less on the market. Compare this to the average 149 days on market for the twenty units that had to reduce their asking price to sell.

An interesting side note is that only one of the six bank-owned units closed at or above asking price. This is reflective of the banks' recent too-optimistic pricing.

Cash accounted for 72% of all condo purchases so far this year. This trend is likely to persist as underwriting has gotten even more strict for condos with many underwriters now requiring forms of insurance that were rarely mentioned in the past and that many associations do not have. Buyers using a mortgage would be prudent to get the condo questionnaire from their lender to the Board of the condo as early in the process as possible in case the association's insurance is not up to snuff.

Take-away for buyers: Identify your property type and either search the MLS daily or have your agent set up an email auto-alert directly from the MLS. You are likely not the only one looking for the same type of property. The stats above tell us that the priced-right units will be gone in less than a month. The 94% of asking average also tells us that a lowball offer is not likely to work. If you will be getting a mortgage please consider using a local lender. Your internet loan officer or cousin at First National back home will tell you they can close on a Florida condo but history tells us that they fail to close far more often than the local lenders.

Take-away for sellers: Price it right to start with and it will sell quickly. It is very easy to know what your unit is likely to bring by looking at recently sold comparable properties and adjusting accordingly for condition and other details. What you would like to get is probably more than what the market is willing to deliver. Be realistic. If you don't trust your agent, get a different one.

The weather the last two days has been wonderful, temps in the 70s with very light winds. The forecast high in Cocoa Beach today is 78 with slightly cloudy skies and a westerly breeze of less than 10 MPH.

I see skies of blue and clouds of white
The bright blessed the day, the dark sacred night
And I think to myself what a wonderful world.
_____________________Louis Armstrong

Sorry Lady, Forgot The Month

I'm back. Sorry for the long break in posts. Google's very protective two-step authentication shut my access down during my time in Abaco. My welcome home first sunrise in Cocoa Beach this morning at left.

On my first partial day back in Cocoa Beach yesterday a nice lady snowbird shook her fist at me from her minivan in the Publix parking lot because she apparently thought my driving pace too casual. Whatever. The streets, Post Office, grocery stores and golf course are jammed to the max with winter visitors, some of them, judging from my encounter yesterday, with their back-home attitudes intact. Protect yourselves accordingly.

Sales of properties in Cocoa Beach and Cape Canaveral this January lagged last January's numbers considerably. There were 46 condos and 11 single family homes closed in the month this year compared to sixty and seven, respectively in 2014. The sold single family homes were skewed to the lower end of the price range with seven of the sales closing for prices below $300,000, all non-waterfront. The four waterfront homes sold closed at prices between $475,000 and $700,000. None of the eleven were short sales and only one was bank-owned.

The 46 closed condos and townhomes were evenly distributed in price with the bottom quarter closing for less than $100,000 and the top quarter closing at prices above $240,000, seven of those between $300,000 and $799,000. Over 70% of all condo sales closed for cash. Three of the condos were short sales and six were bank-owned.

Our current inventory has increased somewhat with the Cocoa Beach MLS reporting 271 units for sale this morning in Cocoa Beach and Cape Canaveral. Five of those are short sales and sixteen are bank-owned. There are 64 single family and half-duplexes for sale. None of them are short sales and four are bank-owned.

The sales in January confirmed the continuing upward trend of selling prices. Barring some unforeseen event, with the robust demand for properties, I think we can expect that to continue. Good luck if you're looking to purchase and resist the urge to lowball. The current dynamic guarantees that that routine has a very low chance of success.

Winter rules are in place.

• Tee times are absolutely necessary unless golfing after 3 PM. 
• Add at least 15 minutes drive time for any drive through the main part of Cocoa Beach. 
• Wear protective and/or padded clothing for grocery store trips and under no circumstances approach the free coffee stand at Publix. 
• Avoid the "Express Checkout-10 items or less" line
• Tip your servers and be nice to them.
• Be very aware walking if crossing driveways on the sidewalk.
• DO NOT wave waiting cars into traffic ahead of you. It's not polite. It's dangerous.

"Wait. Be patient. The storm will pass. The spring will come." __Robert H. Schuller

Winging Back - New Post Shortly

January 2015 Halftime

This is our first halftime report of 2105. Sales are typically slow the first part of January reflecting the reduced numbers of contracts during the year-end holidays and this year is no different. The Cocoa Beach MLS is showing 14 closed condos so far this month and three single family homes. Continuing the established trend, over half of the condos sold in less than a month on the market and all three homes sold in less than 37 days. All but three of the condos closed with cash. Highest price paid so far was for a 3rd floor direct ocean Meridian 3/2 that sold for $700,000 or $338 per square foot. Other sales of note included:

3rd floor furnished south facing 3/2, 2340 square foot Xanadu that closed for $330,000.

3rd floor furnished weekly rental Cocoa Beach Towers 3/2, 1323 sf, carport for $317,500.

3rd floor furnished direct ocean Cape Winds weekly rental 2/2, 934 sf, no garage for $269,500.

2nd floor furnished weekly rental Spanish Main 2/2, 1153 sf, garage for $265,000.

3rd floor south ocean view Conquistador 2/2, 1101 sf, open parking for $190,000.

2nd floor furnished direct ocean 1/1 Triton Arms downtown Cocoa Beach for $130,000.

Condo inventory in Cocoa Beach and Cape Canaveral this morning is at 250 units with short sales and foreclosures representing just 7% of the total. That's the lowest level since 2007. None of the distressed units is direct ocean. That boat has sailed.

"I need to see a gentle palm tree and I won't wait too long." Captain Jim's Drunken Dream by James Taylor

Let's Get This Party Started

Here's a ten year snapshot of our condo market that graphically portrays the crash and recovery. It's been a wild ride. The upward trend in number of units sold should flatten out this year while a graph of prices, if I were able to accurately build one, would continue to rise. Supply and demand firmly in effect right now.

Wispy clouds on blue skies this morning, January 3, 2015, and the temp in Cocoa Beach is forecast to be 78,  with a low of 69 tonight before back up to 80 tomorrow. A cold snap next week will push daytime temps all the way down to the high 50s on Thursday before climbing back to the 70s on Saturday. Not rubbing it in but definitely enjoying it.

There seems to be an unusually high number of snowbirds already in town. Buyer traffic in real estate is likewise brisk. We haven't seen many new listings since the holidays so those looking are experiencing a little frustration with the few good choices available. Half of the 54 condo units closed in December sold in less than 37 days on the market, fourteen of those in less than two weeks. Expect that trend to continue until the inventory recovers. Of the 251 total condo and townhome units for sale right now, half have been on the market more than 90 days suggesting overpricing.

Golfers, time to get back in the habit of making advance tee times and steeling yourselves for slow play. The greens in Cocoa Beach are playing great and it's beautiful out there but from now until Easter it's gonna take a little longer to play a round than most are accustomed to. Do everyone a favor and be aware of your own pace of play. If you're not waiting on the group ahead of you, you might be holding up the group following you. And, please repair your ball marks and fill your divots. Play well..

Random fact: Cleopatra lived closer in time to the moon landing than she did to the building of the Great Pyramid.

That's a Wrap, Cocoa Beach

2014 was an eventful year in Cocoa Beach. I had forgotten how much had happened until I began listing the significant events of the year. I know I may have missed some but these are the ones I can remember that felt worth mentioning.

The picture at the left was taken from the golf course at the Cocoa Beach Country Club on December 20. Temp was in the high 70s at the time. It was a carbon copy of every day of the entire preceding week. By the way, how about those new greens? It's been a couple of years since they tore out the old ones and replaced them with new, salt-tolerant Paspalum grass. They were better than the old very quickly but now that they have completely filled in, they are excellent and, according to one old-timer who plays all over Brevard, might be the best in the county. Kudos to the people who made the decision to undertake this disruptive project and who chose the type of grass to use. It has paid off wonderfully.

Some of the Highlights of 2014

Our new fire station is almost finished directly across the street from the old station which is slated for tear-down. Imagine the Chili Cook-off next year.

The Cocoa Beach Pier was sold to Westgate Resorts of Orlando who have begun total renovation of the 52 year old landmark. I expect big things and probably a challenge of the height and density limits for a new structure on the parking lot. That will be highly contentious if it happens.

The Pelican Landings Resort in south Cocoa Beach was sold and torn down to make room for a magnificent new oceanfront home, a rare case of natural density reduction. It was completed late in the year.

We saw the highest price ever paid for a single family home in Cocoa Beach this year. It was for a 13 year old luxurious, three level direct ocean beauty for just shy of $2 million. That record is soon to be more than doubled when the pending Pumpkin Center oceanfront block closes.

And once again, as we've done for the last six years running, the number of closed residential sales exceeded the preceding year. The over 670 condo units closed in Cocoa Beach and Cape Canaveral (as of Christmas) exceeded the total for every year since 2005.

The final chapter of the Glass Bank saga was begun late in the year as preps for demo began.

The new oceanfront condos on the site of Crawford's Cocoa Cabanas in south Cocoa Beach finally broke ground after first being announced back in 2006 just as the housing crash began. I've been hearing ever since then that construction was about to begin. They are being offered with "boat slips". Caveat emptor.

After voters overwhelmingly supported mixed-use zoning in a small area of downtown Cocoa Beach in 2011, we saw our first two new mixed-use buildings completed, residential upstairs over commercial downstairs. I think we can expect many more of these types of buildings downtown. Also downtown, we saw several other commercial buildings remodeled and re-purposed and several new restaurants, offices and watering holes opened. The old Post Office was sold and remodeled and has reopened as retail and offices.

The Port continued it's blazing pace of growth. The old boat ramps next to Grills were closed to make room for the new Cruise Terminal One which is almost complete. We recreational fishermen scored on this one as we got brand new ramps much closer to the Port entrance adjacent to Jetty Park. The container port appears to be either complete or close to it. The main channel of the Port near the entrance has been widened to allow two cruise ships to pass one another. Next on the agenda there is to turn the area around the Exploration Tower into something like downtown Disney. The conceptual renderings are breath-taking. We've come a long way since Captain Ed's and the scallop plant.

SpaceX completed several successful missions from the Space Center as did the other usual players. The big launch of the year was a massive Delta 4 Heavy in December carrying the Orion space craft. There are a dozen launches scheduled right now for the next eight months from the Cape, seven by SpaceX and five by the United Launch Alliance. The space flight business is firing on all cylinders (nozzles?).

And, while not Cocoa Beach news, the online real estate world experienced a couple of major moves with Zillow buying Trulia and News Corp. buying Point2 and Move, Inc. so that they now own, in addition to Realtor.com, the pipeline for the vast majority of Zillow and Trulia's listings. This one ain't over by a long shot. I can't wait.

We are entering 2015 with an inventory of 257 condo and townhouse units for sale and 60 single family homes.That's about a 4.5 month supply at 2014's rate of sales. Considering this, I think it's reasonable to expect the number of sales to decrease in 2015. There are a total of five short sales and 24 bank-owned properties for sale in Cocoa Beach and Cape Canaveral. That scarcity of distressed sales combined with the low inventory should be a tailwind for continued rising prices. As always, buyers should be aware of market conditions and recent selling prices and be realistic if they hope to purchase. Prices have risen but are still less than the cost to build in many cases. There are gems to be had. Good hunting.

Happy safe holidays to all and a positive and gratifying New Year.


"Your purchase choices are probably fueling slavery. But convenience often trumps ideology, so...whatever." ___ M.Lapa

Robberies Update

Thanks for the feedback from those of you with knowledge of this ripoff. It didn't take me long to find several more examples of the same local brokerage charging their clients the junk fee. The "Broker Only Commission" is exactly the same as the infamous "Regulatory Compliance Fee" that used to be charged by another local brokerage. It's a junk fee that has no place on the vast majority of settlement statements. One reader was kind enough to forward me a portion of their contract that showed the fee disclosed and pre-printed on the last page, presumably to make it seem legit. In two other cases that I looked at, that line was omitted from the contract but the fee was inserted on the settlement statement.

People, do not pay a fee to your agent or broker above the commission they are receiving unless it's a case of reduced or no commission and you want them to be paid an appropriate amount for their work. If you are presented with a contract or settlement statement showing a "Broker Only Commission", "Regulatory Compliance Fee" or any other fee paid to your broker by you, refuse to pay it unless you previously agreed to and are OK with paying it. No agent or broker is going to let the deal die because you refused to be robbed of $345 at closing.

Agents, don't be bullied into ripping off your clients. This is a shady practice and it won't continue without your complicity. There are plenty of good brokerages that don't encourage you to treat your clients poorly. Do the right thing.
_____________________________________________________

Beautifully Written Breath Hold Diving Techniques from Breathing.com

Release snorkel, pike, raise leg, begin to drop. A few strong slow kicks to get to negative and then, depending on the type/depth of diving, glide down to depth or kick a bit more to get through the top portion of the dive and down to depth. Mentally, as a natural low-level anxiety emerges, the game begins. The relationship towards the fear of air starvation becomes a game. It is "out there" in the consciousness, and I physically smile at it like an old acquaintance, neither friend nor enemy.

Ultimately, my control of, or my relationship to, these feelings begins to erode. It "becomes" time to go up. Small contractions may begin in my gut/diaphragm and throat. I begin to smile and to redouble my relaxing "non-effort efforts". Anxiety, tension and wasted movement are the tricksters that conspire to rob me of oxygen (and life). I smile at them, search for that relaxation, and rise. Kicking slowly, trailing my gun. Streamlined. I focus on the beauty of the light above and I move towards it.

The Robberies Continue

For the second time in two weeks I've witnessed a buyer being ripped off by their agent. The crime: a junk fee tacked on the settlement statement among the dozens of other, legitimate charges. If the buyer was told about and agreed to this fee in advance, it's still wrong. I don't know if the broker lets the agent decide whether to charge the client or pay it out of their own pocket. Agents working for a broker who charges them a transaction fee in addition to skimming a cut off the top of their commission are being ripped off. Agents who pass on the fee to their client when a substantial commission is already being paid are ripping off the client. Long-time readers of this blog will remember that this exact distasteful practice by my former broker (one of the big franchise offices) was the impetus for the opening of Walker Bagwell years ago.

I understand why some agents are tempted to pass the fee along. In this particular case, the buyer's broker is receiving $4920.00 commission from the seller's broker. Depending on the agent's split with the broker, if the agent pays the $345 "Broker Only Commission" there's a good chance the agent's take-home pay (before taxes) will be less than half the original $4920. Still doesn't justify ripping off the client. Agents, do the right thing or look for a broker who doesn't see you as just another revenue stream to squeeze and massage.

The photo is of the north side of the Cocoa Beach Pier yesterday, Dec. 10, midday, high tide. Surf was big and clean and, as is usually the case at the Pier, easy enough for Grandma to catch a head-high peeler. Things were a little more intense and consequential a few miles south where the north swell was hitting directly. The epic conditions continue today.

"Living is easy with eyes closed,
Misunderstanding all you see." ____John Lennon