$40,000 Christmas present for all

Those of you tracking property prices with intentions of possibly purchasing should also be looking at the impact of interest rates if you're planning to finance your purchase. Freddie Mac's December 24th survey finds the national average of 30 year fixed rate mortgages at 5.19%, their lowest point of the year and a full point and a quarter below the rate just seven weeks earlier. The payment on a $300,000 mortgage has dropped by $252 per month in just seven weeks, the equivalent of a $40,000 price cut. Definitely not insignificant.

The weather in Cocoa Beach continues to hover in the mid-70s as we approach 2009. I'm seeing winter on the TV but it just hasn't touched us here, yet. My best wishes to all of you for a prosperous New Year. I will do my year-end wrap-up next week with my picks for deals of the year with a few dubious distinctions for flavor. Should be interesting. Peace out.



"I can breathe in a small town."
_________John Mellencamp

Morning Glory

Sunrise at 12th St. South, December 18, 2008

What a week of beautiful weather we've had in Cocoa Beach. While the Weather Channel has focused on the winter storms in other areas of the country, we've been in the 70s every day with little or no wind and a persistent, clean, head-high swell to keep the surfers occupied. The great beach weather has made procrastinating about holiday shopping justifiable, at least in my mind.

As is normal for this time of year, with time off for the holidays, buyers are out in force and we will likely see quite a few properties go under contract before the first of the year. Among the likely targets are the recently reduced direct ocean 2/2 at Waters Edge in south Cocoa Beach. This unit is now offered as a short sale with a suggested price of $179,000, the lowest priced direct ocean 2/2 by a mile. It's view is obstructed by the dune vegetation but it is now priced as if it were smaller, crummier and blocks from the beach. Another favorite of mine is a big (1447 sq. ft.) 3rd floor, 2/2 south view at the 11 year-old Sand Dunes building in Cape Canaveral just reduced to $299,000. Offered fully furnished. The 3000 sq. ft. penthouse direct river unit at Crescent Palms that I mentioned in an earlier post that was offered as a short sale for $399,000 is under contract. None of the units mentioned here are listed by my firm.

Hope you all have a happy and safe holiday season and that the new year brings you prosperity and fulfillment. If you need to contact me before December 26, forget the email and please call my cell, 321.917.5786. I'll be back in the office on December 27. I'll leave you with a shot of a secret holiday pool somewhere in south Cocoa Beach.



"Look at the stars and how they shine for you, and all the things that you do."
______Chris Martin - Coldplay

Giddy-up

The shuttle Endeavour catches a ride back home on a 747 last Friday after initially landing in California due to bad weather at the Cape. The pilots usually cruise low and slow down the beach when returning for all to see. I've seen proud locals spontaneously stand from their beach towels and applaud the safe return of our spacecraft as it cruises by. It's a goose bump moment the first time you see this public display of patriotism and local pride.

Sales and listing activity has been slow as everyone's focus has shifted into holiday/year-end mode. There have been three closed sales of condos so far this month in Cocoa Beach and Cape Canaveral with 20 new contracts executed in the same period. Hopefully we will see a spike in new listings after New Years for those of you still waiting for that perfect unit at the right price.

Among the attractively priced oceanfront units currently offered is a new short sale listing at Park Place in downtown Cocoa Beach; a 2nd floor, 2/2 direct ocean unit being offered for $270,000. There is also a top floor, direct ocean 2/2 at Spanish Main being offered for $299,900. Spanish Main is one of the small handful of buildings that allow weekly rentals. These units rent for between $800 and $1200 per week for most of the year. This is the view.



MLS inventory Dec 15, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____738
over $500,000_________98 - 28 sold since New Year's Day
Single family homes___116
over $500,000_________35
________________________________

"You'll shoot your eye out, kid."
______Santa Claus to Ralphie

System of a Down

Delta rocket vapor trail over Cocoa Beach

Today we get another case history of a bad selling strategy. This is the price history of a 3rd floor original condition, side view condo in an older oceanfront building that has been on the market for 687 days.

Jan. 17 2007 - first listed for $499,000
Jan. 13, 2008 - price drop to $349,900
May 10, 2008 -- 2nd drop to $324,900
June 12, 2008 -- 3rd drop to $319,900
Aug 08, 2008 --- 4th drop to $315,900
Sept 08, 2008 ---5th drop to $310,900
Oct 09, 2008 ----6th drop to $305,900
Nov 08, 2008 --- 7th drop to $300,900
Dec 04, 2008 --- 8th drop to $299,900

After 687 days on the market this seller has shaved 40% off his asking price. During the time since first listing there have been sales of five units in the building, two for $330,000 and three for less than the current asking price. Several were in better shape than the subject unit. Today after eight price drops he is still asking more than two other currently-listed units in the building. My suspicion is that the price drops are not over if he seriously wants to sell. Since the day this unit was first listed, 181 oceanfront condos with at least 2 bedrooms and 2 baths have closed in Cocoa Beach and Cape Canaveral for less than the original asking price of this unit. Sellers take note. This is not the way to sell your unit.

"You say it best when you say nothing at all."
_______Paul Overstreet and Don Schlitz

Free Falling

Mortgage rates have been in virtual free fall for the last month dropping almost three quarters of a point in 30 days. The monthly payment on a $300,000, 30 year fixed rate mortgage this week is about $150 less than the same mortgage initiated just 30 days ago.

Condo sales for the month of November were slow as expected and exactly matched last year's number for the same period with 17 closed sales reported on the Cocoa Beach and Cape Canaveral MLS. Only one sale exceeded $325,000 and seven of the sixteen were either short sales or foreclosures. Notable sales included a foreclosed two year old, 3 bedroom, 2.5 bath townhouse in Cape Canaveral, one block from the ocean that sold for $149,900. Selling price exactly two years ago when it was new was $350,000.

There have been 120 price reductions of condos during the month of November increasing our somewhat meager supply of attractively-priced units. Two of the price reductions were in one of my favorite river buildings, Majestic Bay in Cape Canaveral. I like this 3-year-old building for it's very private location, the extra amenities and excellent construction and workmanship. One of the units is a 1900+ sq. ft., 2nd floor unit with a private 2 car garage offered as a short sale for $279,000. It sold in February 2006 for $445,000. The other drastic price reduction in the building was the developer's personal 4th floor corner unit with a deeded boat slip and 2 car garage. The price of this gorgeous unit with many extras was dropped from $475,000 to $349,900 making this one of the smoking deals of the moment.

"In the middle of every difficulty lies opportunity."
_________Albert Einstein

Tremors

I received word yesterday and confirmed this morning that a lis pendens or notice of foreclosure has been filed against one of our local developers on 16 of the unsold units in a big condo development in Cape Canaveral. This will likely further depress prices in this complex which took a hit earlier this year when the developer auctioned off several of the unsold units. One bright spot in this unfortunate situation is that at last these units, once sold, will begin contributing monthly condo fees. The association, until now, has been receiving no monthly fees from these units. We also had a sweeping series of price reductions of luxury oceanfront units at Meridian and Michelina on the beach this week. While the crack sales team at Meridian has accounted for fully half of all over-$500,000 MLS-listed condo sales in Cocoa Beach this year, no MLS-listed Michelina units have closed since the developer's model sold in May this year. By the way there are 4 units at Michelina offered for $1.49 million and above, one for a cool $3 million.

In south Cocoa Beach, the developer has reduced at least one unit at Magnolia Bay to well below pre-construction prices. A few blocks south, another short sale is being offered at Crescent Palms, this time a south corner penthouse with 3000+ square feet that sold new in December 2005 for $775,000. Suggested price now is $399,000. The MLS-listed unsold units at the new buildings Ocean Cove, Ocean Paradise, Garden Bay and Garden by the Sea were all withdrawn on September 11 and have not been relisted as of this morning.

There have been 10 closed sales of MLS-listed condos and townhomes so far this month in Cocoa Beach and Cape Canaveral. Only one was for more than $295,000. During the same period, three single family homes closed, one a short sale of a gorgeous Country Club waterfront home that sold for $449,000.

There are a couple of new listings of direct ocean units in weekly rental buildings this week that are realistically priced for those of you who have been waiting for something with high income potential priced right.

MLS inventory Nov 21, 2008 Cocoa Beach & Cape Canaveral

Condos, all prices_____748
over $500,000_________91 - 29 sold since New Year's Day
Single family homes___116
over $500,000_________36

In case you were wondering, the ship in the photo is the 370' yacht, Le Grand Bleu , currently docked at Port Canaveral. You may have seen it across the channel if you've dined at Grills recently. This monster of a private yacht was a gift from Russian billionaire Roman Abramovich to his friend Eugene Shvidler. Thank goodness he didn't give it to me as the fuel bill for the twin 3600 HP engines is probably out of my budget.

"Never let the fear of striking out get in your way."
_______Babe Ruth

Dear Ms. Condo Seller

Dear Ms. Condo Seller,

I had a buyer stop in unannounced this morning wanting to see oceanfront condos. I called your listing broker hoping to show your unit. The broker informed me that they would not be putting a lockbox on your unit and that, instead, buyer's agents would have to pick up the key in their office, an 11 mile round trip from your unit to pick up the key and another 11 miles to return it. I applaud their effort to save money by not spending money on silly tools like lockboxes but, unfortunately for you, in trying to see as many units as possible today, our schedule does not allow the time necessary for the trips to pick up and return your key. Good luck selling your condo in these difficult times. Oh yeah, love the blurry pixelated cell phone photos of your unit on the MLS. If I squint my eyes and shake my head while looking at the photos, your unit looks lovely.

Sincerely,

The Buyer's Agent

P.S. I don't mind driving an extra 22 miles for my buyers and, next time, with advance notice, I will pick up the key in advance but, today, the situation did not allow that. You may want to request that your broker provide a lockbox and decent MLS photos. Remember, you're only looking for one buyer, so, you don't want to chance excluding anyone with difficult access or unappealing photos.

"I cannot give you the formula for success, but I can give you the formula for failure..."
_______Herbert Swope

Disclaimer: This letter was not actually sent to the seller as that would be inappropriate, although the story is true. My intention in posting this is to inspire all sellers to investigate the efforts of their brokers and to be proactive in reducing friction in the selling process. Successfully selling a property in today's competitive market involves more than correct pricing and effective marketing. Providing easy access is paramount as are decent MLS photos.

Silly Games and Pompano

November surf fishing in Cocoa Beach, hoping for a pompano.

Below is the listing history of a waterfront home in Cocoa Beach.

07/18/08	$1,199,000
08/25/08	$1,189,000
08/28/08	$1,184,000
08/29/08	$1,179,000
09/02/08	$1,174,000
09/03/08	$1,169,000
09/05/08	$1,164,000
09/14/08	$1,159,000
09/16/08	$1,154,000
10/02/08	$1,149,000
10/07/08	$1,143,000
10/09/08	$1,139,000
10/10/08	$1,129,000
10/24/08	$1,124,000
10/25/08	$1,119,000
10/27/08	$1,114,900
10/29/08	$1,109,900
11/06/08	$1,100,000
11/07/08	$1,090,000
11/08/08	$1,080,000
11/09/08	$1,070,000
11/11/08	$1,050,000

I'm not sure what the strategy is here but apparently the seller believes that there is a buyer out there who will make a move when the price hits the magic number. With such teeny price drops the seller is obviously afraid of selling too low but must have some motivation in selling unless this is just a crazy MLS experiment. After 22 price drops in 4 months without a sale, two things are obvious; the price is still too high and the seller is not serious about selling. I always investigate the current and previous listing histories of target properties before making an offer in hopes of getting some indication of the seller's level of motivation. Much can be learned from these histories. My take-away from this particular history and the silly series of small price drops is that this seller is not realistic about the market and will probably be reluctant to accept well-researched comps and a fair offer. If you are trying to sell your property, I would advise researching recent sales and competing properties and to price your property at or just below what the comps tell you is fair market value. Don't waste your time playing games like this seller if you really want to sell.

"Never play cat and mouse games if you are a mouse."
_____Don Addis