Short sales and slackers

Short sales have been very much a part of our market for the last two years. The percentage of closed short to total sales in recent months is at or near the historical peak even as inventory of short sales (and foreclosures) has dropped to below 20% of all residential MLS inventory in Cocoa Bach and Cape Canaveral as of this writing.

Every short sale has a life of it's own and, in my experience, no two take the same path to eventual closing or failure. The fate of a short sale rests primarily with the listing agent and her negotiator (if she is smart enough to have one). It is the listing agent's (or her negotiator's) responsibility to gather the paperwork required by the lender(s) and to timely submit complete packages and to follow the convoluted steps from start to finish. A good listing agent will keep the buyer's agent informed of progress, or lack thereof, along the way. Most fail to do this during the long process. I thought I'd relate my experiences with several recent short sales.

Short sale number one had a contract that was executed on December 18, 2009. It was initially negotiated by an attorney hired by the seller which left the listing agent out of the loop. This listing agent is experienced and determined and refused to be kept out of the info flow. She dogged the attorney's office for progress reports when they failed to offer them and shared those updates with the buyer's agent during the first seven or eight months of negotiations. When the attorney's offcie was unable to get approval, the file was handed over to a title company to attempt to resume negotiations. At slightly more than eleven months since the offer the sale closed. Without the listing agent's persistence and sharing of progress with the buyer's agent this short sale would likely not have happened.

Short sale number two also had an attorney hired by the seller involved. The attorney's office was uncommunicative with the listing office and seemed not to understand the process. By the time the bank finally issued acceptance well over a year later the buyers had moved on. Maybe better communication from the attorney could have kept the buyers engaged and committed. Maybe not.

Short sale number three also had an attorney negotiating with the bank. This experienced and competent lawyer was able to get approval relatively quickly except that the bank wanted the seller to contribute some cash at closing in exchange for release from all other liability. As the seller didn't have any cash this looked to be a deal killer but, in this case, the contract price was low enough that the buyer was willing to contribute (with the bank's knowledge) the amount for the seller and the sale closed. Seller walked with no liability and the buyers got a great deal.

The attack of the listing agent:

I have had an unusually high number of encounters with incompetent and lazy listing agents and offices in recent weeks. I am reminded of a post from 2008 in which I talked about the obstacles some listing agents and offices put between their clients and the sale of their property. You can reread it here: Dear Ms. condo seller

Last weekend I was stymied yet again by the same office that keeps all listings' keys in their office and is closed on the weekend. Not a problem when the buyer's agent has advance notice but for those not uncommon times when a client shows up unexpectedly on a weekend and wants to see properties, all of this office's listings are off limits. I won't even go into the 22 mile double round trip necessary for agents from downtown offices wanting to show downtown listings.

I showed a property recently which was easy to show as the showing instructions said to pick up the key in the condo's office and show. Great, except that after showing and deciding to present an offer, there is no answer at the listing office during weekday business hours and the agent does not respond to email AND his cell phone goes directly to voice mail with a full mailbox. The listing agent responded for the first time 48 hours after the offer had been emailed to him and three days after the offer was first presented, no further response.

Another listing agent responded to a call for showing instructions with the tidbit that the short sale unit was "disgusting". We looked at it anyway and decided to make an offer. The agent quickly acknowledged receipt of the offer and then stopped answering emails and phone messages. Next contact was six days after presenting our offer with the news that she had received another offer and we should present our best offer. We revised our offer and presented it with her quick acknowledgment of receipt. She then went back into blackout mode and finally responded two days later with an email that she had two offers and was "processing" them. We are now 10 days since the initial offer and she is incommunicado. We may need an intervention from her broker to force her to do her job. However, having displayed her incompetence in the listing process, we are concerned that she will have the ability to close a short sale. I suspect she won't.

Unfortunately, these are not atypical experiences. If you are a seller, it is a good idea to ask your agent how your property is to be shown. Requiring buyer's agents to go on a scavenger hunt to get the keys is only effective as a deterrent to a sale. If you have a tenant in your property, have a talk with your tenant before listing and make sure they understand that they must allow showings. I can' tell you how often I call to show a tenant-occupied property only to get some weak excuse from the tenant why today isn't a good day. In it's most extreme case I have known tenants to change the locks so that the listing agent's keys wouldn't open the door. You may think your house is for sale when it's really not.

Have you called your listing office today? How about the listing agent? If buyer's agents can't get through to your agent or her office, you are less likely to sell. Guess which days are busiest for showings. Saturday and Sunday. Guess which days real estate offices are most likely to be closed. Yep. Pick up the phone and call your listing office on the weekend. Call your listing agent any afternoon on her cell. If you're not getting answered buyers agents aren't either.

If yours is a short sale it is critical that your listing agent or her negotiator be experienced in the process. Your sale may be complicated enough that you'd be better off with an attorney. If you decide to use an attorney for the process be sure to hire one that specializes in distressed sales. Not all attorneys are competent in short sale negotiations. A good one should be able to get you out with less post-sale liability.

A last comment about listing agents; There are many good ones. I find myself across the closing table from the same ones again and again. I respect and admire many of my listing colleagues and appreciate their professionalism. You know who you are. It is the not-small number of incompetents who make the road bumpy for their clients and those of us representing buyers that I have a problem with. Match one of these with a difficult and unreasonable seller and you have a headwind of epic proportions.

We've enjoyed a few days of beautiful December weather after the bitter cold snap earlier this week. The shot at the top was Thursday this week, windless and in the 70s. Happy and safe holidays to all.

I can see every monster as they come in.__Truman Capote

November Wrap-up

Warmer days.

November was a good month for luxury condo sales in Cocoa Beach and Cape Canaveral. According to the Cocoa Beach MLS, out of 39 total condo and townhome sales, four were for more than a half million dollars and six others were at $300K or above. Seven of the ten highest priced closings were cash deals. Eight of the 39 were short sales and nine were foreclosures. Only three of the 17 distressed sales exceeded $200,000. There have been only 18 closed sales of condos exceeding $500,000 so far this year.

Highlights in the non-distressed sales included;

Three brand new units at Ocean Paradise in south Cocoa Beach closed this month with three more under contract and only four units left for sale in the building. All the action here happened after the last big price cuts on these units in late September. One unit sold at a $200,000+ discount to asking price.

Two big (2819 square feet) corner units at Solana Shores in Cape Canaveral closed one day apart for $555,000 and $565,000. Forth and third floor respectively.

A fifth floor corner at Emerald Seas closed for $395,000. It was a 3 bedroom, 2.5 bath with 2394 square feet and sold fully furnished.

The second floor south unit at the four year old Almar in south Cocoa Beach sold for $380,000. There are only two units per floor in this small direct ocean building. This unit has 2713 square feet, 4 bedrooms, 3.5 baths and a 2 car private garage.

A third floor direct Banana River southwest corner unit at the four year old Garden Bay in Cocoa Beach sold for $340,000. This unit has 2600 square feet with 3 bedrooms, 3.5 baths and a 2 car garage.

A 2nd floor direct ocean 2/2 at Sea Era Sands in Cape Canaveral closed for $247,500. 1409 square feet and garage.

Two units sold in the month at Solana Lake in Cape Canaveral. Both were 2/2 units and closed for $184,000 (third floor, 1698 sf) and $208,000 (fifth floor, 1828 sf).

A nice 2nd floor, 2/2 Spanish Trace direct river unit closed for $135,000. This complex is right across the road from the CB schools and a short walk to the Country Club. Carport instead of garages.

A fully furnished direct river, 2nd floor end unit at Cape Shores in Cape Canaveral sold for $126,000. Open parking, 2/2 with 1082 square feet.

A small but nice 2 bedroom, 1 bath unit at Twin Palms in Cocoa Beach 2 blocks from the beach sold for $67,000.

Among the distressed sales these were interesting;

Top floor (5th) Cape Winds southeast corner direct ocean 2/2 closed as a short sale for $250,000 eleven months after the contract was signed. Cape Winds is one of the very few complexes that allow weekly rentals.

A side view 2nd floor Michelina 3/3 closed as a short sale for $299,900. Four years old, 2411 square feet with garage. This one only took five months from contract to close.

A very nice top floor 2/2 with 1409 square feet and garage at Sea Era Sands in Cape Canaveral sold for $245,000. This short sale closed quickly with only two months from contract to close.

Another short sale closed at Diplomat of Cocoa Beach. This was a ground floor 2/1 with open parking that went for $74,900. Needed a little TLC. This one was three months from contract to close.

Two Mystic Vistas foreclosures closed for $194,000 and $150,000. Both units were 2000+ square feet. The lower priced sale was a never-sold unit taken back from the developer while the higher priced unit sold new in 2007 for $544,900. Ouch!

A foreclosed direct ocean, top floor 2/2 unit at the 33 year old Crossway in Cocoa Beach closed for $155,000. Open parking and 1250 square feet. It sold five years ago for $370,000. Another foreclosure with the same floor plan on the same floor in the building also sold in November for $190,000. It last sold in 2004 for $360,000.

Last of our distressed sales was a foreclosed five year old Majestic Bay townhome in Cape Canaveral. This big 2307 square foot, 3 bedroom, 3.5 bath unit has a 2 car garage and sold for $128,000. Sold new in 2005 for $308,900.

Condo and townhome inventory in all prices stands at 482 this morning with 77 of those offered as short sales. There are only 24 foreclosures in the mix. Much of the rest of the current inventory is overpriced which is why it's still there. The supply of distressed sales continues to shrink. Prices of non-distressed properties have continued to drift downward although at a slower pace. For established older complexes and single-family homes I don't foresee a whole lot more downward movement in average selling prices barring total economic collapse. There is a reservoir of pain yet to be realized in the higher price range especially in the newer buildings. As always, I could be wrong. Pray that I'm not.

“No matter how cynical you get, it’s impossible to keep up.” _______________Lily Tomlin

Random observations

Looking west on Minutemen Causeway yesterday.

I hope everyone had an enjoyable Thanksgiving holiday. Weather looks beautiful for the last day of the Space Coast Art Festival in downtown Cocoa Beach and I'll be rejoining the crowds here shortly. It's always a fun time. I crunched a few numbers this morning looking for trends from the almost-finished year. My findings mixed with some random anecdotal observations are below.

Trends in 2010 in Cocoa Beach and Cape Canaveral

• High-end newer condos saw prices drop significantly closing the gap with older luxury units. We saw sales at Ocean Club, Magnolia Bay, Michelina, Ocean Paradise, Garden Bay and other new luxury developments at numbers hundreds of thousands of dollars below previous asking prices. This pressure on prices will likely abate as supply diminishes but there is more pain yet to be felt at at couple of large, recently completed complexes starting with "M".
• While mortgage rates hit an all-time low, difficulty in getting a mortgage hit an all-time high, especially for condos.
• The number of condo sales was up for the 4th straight year.
• Inventory continued to drop. Now at pre-boom levels.
• Short sales and foreclosures made up more than a third of all sales. Of these distressed sales, the vast majority were clustered in the sub-$100,000 range. Only 7% of the distressed sales were for $300,000 or more.
• Of 127 pending sales, 80 (63%) are distressed.
• Of 586 currently active residential listings in Cocoa Beach and Cape Canaveral only 102 (17%) are short sales or foreclosures. This seems to suggest that once the 80 pending distressed sales close, we may be out of the woods for this cycle. We will, of course, see more distressed sales but likely not at the pace of the last couple of years. It appears the bulk of the weak hands have folded. As always, I could be wrong.
• Some buildings will continue to buck the trend because of limited supply, strength of owners, age and other factors. Because Mystic Vistas is imploding doesn't mean that Solana Shores owners are going to give away their units.
  

I welcome all comments, predictions and other observations. It is almost noon and downtown Cocoa Beach is wrapped up in Art Show visitors. I'm out there. Have a good one wherever you are.

The end of the world call, so far throughout history, has been the losing bet. _________Barry Ritholtz

repeat: Ten questions for prospective condo buyers

This is repeat of a post from last year that is still relevant. Some of you may have missed it then.

I've seen many a search for a beach condo grind to a halt or take an abrupt turn when a buyer encountered an issue that they hadn't considered earlier. One's mental image of the perfect beach getaway may be at odds with the reality. Below is a list of ten pertinent questions prospective buyers of beach condos should have asked and answered prior to beginning the search.

1. If planning to get a mortgage for the purchase, how much down payment will the lender require? Mortgage requirements for Florida condos are different than those for condos in other states and for houses. Expect to have to put down 25 to 30% in most cases for Florida condos. Your pristine credit does not matter.

2. What will my taxes be? Forget what the current owner is paying. It does not apply to the new owner except (sometimes) for the first partial year of ownership.

3. Will there be a problem with my English Mastiff? Probably. Most condos have rules limiting the number and weight of pets. Some don't allow any pets at all.

4. Do the condo fees cover all expenses? No. In most condos the monthly fees cover insurance and maintenance for the building, water and sewer, basic cable, lawn care, common area electric and other common expenses. Some condos also include hot water in the fees and some even cover AC units. At the other end of the scale, some do a special assessment every year when the insurance bill arrives and a few complexes with artificially low monthlies seem to assess every time the wind changes direction. Be suspicious of condos with too-good-to-be-true low monthly fees.

5. Will the insurance on a Florida condo be sky high? No. As the condo fees cover the insurance for the building, the unit owners have only to cover the interior and contents of their units. I pay less than $1000 per year for a small 2 bedroom beach rental condo.

6. If I don't like the layout will I be allowed to remodel my unit? Yes. In most cases, any interior alterations that do not affect the structural integrity of the building are allowed. Removing non-load-bearing walls and building new walls are common alterations. Exterior alterations in most cases are more tightly restricted. Replacing the tired wooden front door with a hip new stainless steel door will likely not be allowed.

7. Are ground floor units undesirable? Not according to the people living in them. If you don't plan to go to the beach often, you will prefer the view from an upper floor. If you're one of those people or families that will be on the beach a lot, you may want to consider the lack of barriers (stairs or elevators) between your unit and the beach. I've found that the people in the ground floor units are the ones who spend the most time on the beach. Bonus here is that the ground floor units usually sell at a decent discount to higher floor units.

8. Can the condo association bill me for repairs to the building without my consent? Yes. All owners in a complex share the expense of maintaining the common elements and the board has a duty to maintain those shared assets. When the time comes to repair the balconies or replace the roof, if sufficient reserves don't exist, each owner will be assessed their share of the total. Sometimes an association will get a loan to pay for a large expense and increase monthlies to cover the repayment of the loan. This is why it is vital to review the condo budget and to read minutes of recent meetings. A buyer should be aware of recent and/or upcoming repair projects. Some buildings have reserves to pay for future expenses and some have none. Lack of reserves may kill chances of a mortgage. If considering a unit in an older building, all other things being relatively equal, a building that has recently completed a large renovation project is more desirable than one staring at an upcoming project.

9. If the seller agrees to pay the assessment for the upcoming concrete restoration project should I be concerned about anything else? Yes. The assessment might not be enough to take care of unexpected issues that surface during the project. Even more important, are you prepared to deal with the noise and inconvenience of the project for an extended period? Major concrete projects in addition to being expensive, are unbearably noisy, balconies are out of use and often pools are covered for the duration. As stated in number 8, a building with recently finished project is preferable all other things being equal.

10. Will I be able to rent my unit out for some income when I'm not using it? Maybe. Some condos have no rental restrictions while others have up to a one year minimum rental period. If you are prohibited from renting for less than a year, you won't be using the unit at all if you choose to rent it. If you buy a unit in a building with a one month or longer minimum rental, you may have a hard time picking up a monthly or longer tenant outside of the January through April season. You can read my detailed post on rental restrictions and their implications here.

This is by no means a comprehensive list but it's a good start. Knowing about restrictions and issues may eliminate a lot of wasted effort in your search. If anyone has others I've not included, please add them in the comments below.

I know that things are getting tougher
When you can't get the top off from
the bottom of the barrel.
_____Green Day

October 2010 rundown

Somewhere in Cape Canaveral, November 3, 2010.

Welcome and best of luck to our new Cocoa Beach City Commissioner.

The month of October 2010 saw 45 condo and townhome sales in Cocoa Beach and Cape Canaveral as reported on the Cocoa Beach MLS. Only four of the sales exceeded $187,000 and 40% closed for less than $100,000. There was one lone sale above the half million dollar mark, a beautiful 4th floor southeast corner at the 5 year old Carlyle in south Cocoa Beach. This unit has 2713 square feet, 3 bedrooms, 3.5 baths, a 2 car garage and expansive views over the ocean and the three mile wide Banana River across the street. It closed for $590,000 having sold new in 2005 for $850,000. It was offered for $1.15 million in 2007 with no takers.

The 2nd highest priced sale was a 2502 square foot, 5th floor Diamond Bay of Cocoa Beach. This 3 bedroom, 2.5 bath unit has expansive Banana River views and a big 2 car garage. Sold for $310,000.

A 3rd floor C building Stonewood 3/2 with a side ocean view sold for $280,000.

A direct ocean Canaveral Towers 2nd floor 3/2 closed for $240,000. Fully furnished with two ocean balconies. This is a weekly rental building with excellent income opportunities for owners who choose to rent.

A 2nd floor direct ocean Sand Dunes 1/1 in Cape Canaveral closed for $187,000. It was fully furnished and came with a 1 car garage.

A direct river Bay Club of Cocoa Beach (across the street from the schools on Minutemen) sold for $175,000. This top floor (2nd) corner unit had 1570 square feet, 3 bedrooms, 2 baths and a boat slip. No garages at this small building.

Mystic Vistas in Cape Canaveral was active in October with four recorded sales as of this morning although there may be some others not accounted for yet. The sales so far recorded ranged from a jaw-dropping $130,000 to $187,000. All were 3/2 units between 1994 and 2010 square feet with garages.

Another Perlas del Mar unit closed as a short sale for $161,000. The train of foreclosures and short sales may be coming to an end in this unfortunately timed complex. Every sale in the last two years there has been either a short sale or a foreclosure. As of this morning there is only one unit actively for sale on the MLS. These big, luxurious units sold for as much as $345,000 new a few years ago.

A direct ocean, 2nd floor, 2/2 southeast corner at Windjammer in Cape Canaveral sold for $160,000, quite a deal even though the unit was in original condition. In fact it was such a compelling price for the buyer that another owner exercised their first right of refusal and bought the unit, pushing the original buyer out.

A 2nd floor direct ocean 1/1 at Royale Towers in Cocoa Beach sold for $150,000 fully furnished with garage.

Two more direct Banana River units sold at Pebble Cove of Cocoa Beach. Both were top (4th) floor 3/2 units with 1344 square feet and garage. One closed for $135,000 and the other, in slightly better condition, sold for $146,000. This same unit sold in March of this year at the same price, $146,000.

An Oak Park townhome in Cape Canaveral closed as a short sale for $128,000. Not bad for a four year old 1855 square foot, 4 bedroom, 2.5 bath with 2 car garage. Sold new in 2006 for $299,900.

Two Villages of Seaport 2 bedroom 2.5 bath townhomes sold in the month for $124,000 and $127,000. Both had open parking and were built in 1985. A 1/1 built in 2002 in the same complex sold for $88,000.

Another ground floor lakefront Harbor Isles of Cocoa Beach 2/2 with private garage sold for $120,000.

A Royale Towers C building 1/1 unit on the ground floor closed for $98,000. Had a garage and a tiny peek of the ocean. Sold for $175,000 just three years ago.

Two Banana Bay of Cocoa Beach 2/2 townhomes with open parking closed in the month setting new lows for the complex, one for $90,000 and a foreclosed unit for $68,250.

A four year old 2nd floor 2/2 in Portside Villas Cape Canaveral closed for $89,000. It last sold in 2006 for $195,000.

One of the non-waterfront Four Seasons 2/2 units with open parking sold for $82,500.

Another complex setting a new low was The Diplomat in Cocoa Beach. A ground floor, non-oceanfront 2/1 in need of extensive repairs went for $64,000.

Non-condo residential sales were quite brisk for the month with 14 sales of MLS-listed homes in the two cities. Prices ranged from $105,000 for a 5 year old 2/2 half-duplex with garage in Cape Canaveral to $960,000 for a super nice 4/3 single family on 75 feet of direct ocean beach just south of downtown Cocoa Beach. Cocoa Beach canalfront home sales ranged from $360,000 for a gorgeous remodeled 3/2 with 2373 square feet and pool on Barrello to $201,000 for a 1592 sf home in need of extensive work or possible tear-down on Trinidad.

Deal of the month had to be a 3/2 with 1440 square feet and pool on the canal on Barrello that went for $237,000.

Lowest price for a freestanding single family was a foreclosed, non-waterfront, fixer-upper in Snug Harbor on a .17 acre lot that closed for $123,000.

I've been imitated so well I've heard people copy my mistakes.______________Jimi Hendrix

A luxury condo case study

I thought it would be interesting to review the luxury condo market in Cocoa Beach and Cape Canaveral as it stands in the last quarter of 2010. Some of my comments from one year ago about the same market segment are here. For my number-crunch, I chose the poster child of successful sales in a crappy market, the beautiful Meridian of Cocoa Beach pictured above. This complex was built and marketed by an experienced long-time developer in our area who has built 21 complexes in Cocoa Beach and Cape Canaveral since 1977. They were able to sell their last remaining unit out of 64 in December 2009 about two and a half years since the first unit closed, a remarkable feat in a horrible market while every other developer was floundering with few or no sales. Of the strategies they employed to sell their units, in addition to "decorator credits" paid back to buyers, they offered jacked-up commissions to buyers' agents. Of the last 13 developer units sold, all paid either 4% or 5% to the buyers' agents. A $30,000 plus potential payday is enough to set most agent's tails a wagging. This strategy along with exorbitant bonuses was employed by other developers in our area as the market tanked boosting buyers' brokers paydays on some sales over the $50,000 mark. For the record, I have always thought bribing buyer's agents a smelly practice and have commented frequently about it on this blog.

We have seen five total resales at the Meridian (all between $550,000 and $575,000). One other unit is under contract at the present, a short sale asking $500,000. The first resale happened in January 2008 just 17 months after it's purchase for $150,000 more than the short sale price of $550,000. The developer was able to move the remaining 13 unsold units after this short sale closed although by mid 2009 they were starting to drop prices of similar units below $550,000 in order to exit the project. The second resale happened a year and a half later in August 2009 and, although not a short sale, sold for over $100,000 less than the purchase price two years earlier. The last three resales all closed this year. None were short sales but all represented over $100,000 loss to each of the sellers.

As of this morning, October 24, there are six units offered for sale and one short sale under contract . Two of the six are asking slightly more than they paid (cuckoo) and the other four are asking below their purchase price, one more than $200,000 less. What are we to conclude from our research? To me, it seems that there will be more price drops in this complex and very likely more short sales. Excluding the resales, only four owners bought for less than $575,000, the highest of the resale prices. That means that there is likely a considerable number of underwater owners who have been blindsided by the resale prices since the developer's departure. How long do they hang on looking at a six-figure paper loss with fingers crossed hoping for a turnaround?

There is a level at which these units will sell and the market seems comfortable with the recent low to mid $500,000 range for the interior units although it's conceivable that it could inch lower. None of the corners have resold. We saw immediate sales recently at Ocean Paradise in south Cocoa Beach when the developer dropped prices significantly on the unsold units there and I expect, at or near the current lower asking prices, that the building should sell the remaining units. Buyers who have been waiting for deals on luxury condominium units have now and in the near future opportunities to be rewarded for their patience. There are other new luxury buildings with similar dynamics where deals have already been and will be happening as reality becomes manifest. There are two pending short sales at Sol y Mar for less than $450,000. These units sold as high as $900,000 four years ago. As units at Michelina have been offered in the high $400s and low to mid $500s recently they have sold.

Inventory of $500,000 plus units stands at 44 right now, half that of early 2009. Some of that is due to asking prices drifting below the half million dollar mark but a significant part of the reduction is because of sales. Meanwhile, the October weather continues to be perfect. I encourage beach time. The ocean water is at 80 degrees and the mullet run is still on and the beaches are deserted with the exception of the beach behind Coconuts where the annual Slater Brothers Surf Contest is happening this weekend. The boys were skating the big ramp set up on the beach under the full moon the last two nights.

What we don't know keeps the contracts alive an movin'
They don't gotta burn the books they just remove 'em
___________Rage Against the Machine

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