June Flowers and Property Sales

It might have been nothing more than a cruel tease but we got our first long, soaking rain of the season on Friday after months of little to no rainfall. Every green and blooming thing in town is radiating happiness and it seems to be affecting the humans as well.

The month of May finished with a bang in the local real estate market. As of this morning, the MLS is showing 67 condos and townhomes closed in Cocoa Beach and Cape Canaveral during the month. As is normal in our market, over half sold for cash and ten sold in the first week on the market. Average days on the market are creeping up as sellers, emboldened by low inventory and rising prices, are listing with ever more optimistic initial asking prices. As always, the market ultimately decides the selling price, not the seller. The MLS is showing 204 total existing condos and townhomes for sale in Cocoa Beach and Cape Canaveral this morning and another 27 to-be-built units.

Action in the higher end of the condo market was subdued with only ten of the sold units closing for more than $399,000. Over half closed for less than $220,000. Decent oceanfront units were closing for prices mainly in the $230 to $285/sf range with only one smaller unit commanding over $300 per square foot. For perspective, there are 33 units currently asking over $300 per square foot. Only a few of them deserve that price.

Single family home sales continued at a strong pace with 16 closed in May, five of them over a half million. Only three of the homes sold for cash. A third of the homes sold in the first 30 days on the market. There are 73 homes currently for sale in the two cities.

Bottom Line
The song remains the same; know how to, or have a buyer's agent who does, accurately estimate fair value of properties for sale. If a listing is priced closed to fair value, it usually sells quickly. If a condo, know that over half the interested parties will likely be offering cash. Those who have been looking for a while will know that putting off an offer until travel arrangements have been made will likely contribute to being to the table too late. It's possible and usually advisable for out of town buyers to have their agent go ahead and offer on attractively priced properties sight unseen as long as they can negotiate a long enough inspection period to accommodate travel here for viewing. As we oldtime surfers used to say, "the lip does not linger".

SpaceX launched a previously flown Dragon Spacecraft on a resupply mission to the ISS yesterday and successfully landed the first stage of the Falcon 9 rocket vertically at LZ1 at the Cape after stage separation. The tremendous sonic boom of the returning Falcon loosened caulking and fillings all over town.

"A human being should be able to change a diaper, plan an invasion, butcher a hog, conn a ship, design a building, write a sonnet, balance accounts, build a wall, set a bone, comfort the dying, take orders, give orders, cooperate, act alone, solve equations, analyze a new problem, pitch manure, program a computer, cook a tasty meal, fight efficiently, die gallantly. Specialization is for insects."  __Robert Heinlein

Read More >>>

Don't Panic...Yet

A fine example of Jurassic World Cocoa Beach wildlife. I've seen this guy chase snakes away.

A few things: Several dozen property owners in Cocoa Beach and Cape Canaveral woke up Sunday morning of Memorial Day weekend to find (if they looked) that their property was being advertised on Zillow as "foreclosed" or "pre-foreclosure (auction)". Must have made for an interesting morning for those who caught it. Most probably didn't but you can bet that real estate agents across our area are frantically researching the flood of new distressed properties that their Zillow-using clients are calling about. The handful that I looked at when I got the alert proved to be mostly previously foreclosed properties that had long since been sold and off the MLS in some case for over six months. It was either a computer glitch during the night or a deliberate ploy by Zillow to increase traffic, their life-blood. We may never know. For the record, of the 298 residential listings in Cocoa Beach and Cape Canaveral this morning only five are distressed, four of them bank-owned, one auction and zero short sales.

In the shenanigans category; another agent mentioned to me that a settlement statement he saw last week had a substantial "marketing fee" being paid by the seller to her broker. This was in addition to the commission already being paid which was at the top of the range I'm used to seeing. Not sure what extra "marketing" on this particular property deserved a bonus beyond what is usually provided in a listing but, hey, if they'll sign agreeing to pay more, why not? My opinion; disgraceful gouging, but I don't have all the details and perhaps the seller insisted to weekend ads in The Telegraph and Le Monde. to which the listing agent agreed with the extra fee.

We are resting at a measly 200 total existing condos and townhomes actively for sale in Cocoa Beach and Cape Canaveral. There are another 27 pre-construction units offered to the market's collective indifference. The low inventory numbers may have finally put the brakes on the sales rate. In the last two weeks only 21 units have gone under contract, quite a slow-down from activity in the first quarter. Five of those sold within the first five days on the market. So far in the month of May, 53 units have closed, 32 of them bought with cash. Fifteen single family homes have closed so far in May with only three of those purchased with cash.

Speculations: A frequent question I get is "Should I wait to look for a property to purchase in Cocoa Beach assuming prices will be better later?" Looking at our 200 unit inventory, which I though would level out many dozens of units higher, I don't see any forces that would contribute to prices retreating from current levels. This is, of course, barring a macro event like dollar collapse, war with North Korea or another country gaining control of our executive branch. Demand is still high and the appreciation we see appears to be at a healthy sustainable rate. Without a flood of new properties, the demand should continue to exceed the supply well into next year and beyond. The takeaway for those who agree is to continue the search if purchasing is the goal. Waiting for a dip in prices could prove expensive.

There's an excellent new fish market downtown Cocoa Beach on the beach side of South Atlantic just south of Minutemen next to the sunglasses shop. It's Coconut's Fresh Catch Market and it's not what you might expect. I've been in three times and I've found big, fresh cuts of locally-caught fish, tripletail, cobia, tuna and mahi in addition to some other not-local fish. Homemade crab cakes ready to cook for $5 each. The prices are slightly higher than the markets at the Port but the difference won't buy the gas there and back and the quality is equal. If you like fresh seafood, check them out and support this welcome addition to the community.

On this Memorial Day we celebrate and honor those who made the greatest sacrifice defending our freedom and way of life. Think about the idea of someone you don't know dying to protect your right to the way of life you enjoy. That is what this holiday is about. In addition, there are thousands of living Americans serving right now knowing the possibility of their making the greatest sacrifice is part of their service. To those before you and to you, thank you and a tip o' the glass.

“There are so many ways to be brave in this world. Sometimes bravery involves laying down your life for something bigger than yourself, or for someone else. Sometimes it involves giving up everything you have ever known, or everyone you have ever loved, for the sake of something greater.
 
But sometimes it doesn't. Sometimes it is nothing more than gritting your teeth through pain, and the work of every day, the slow walk toward a better life." __Veronica Roth, Allegiant

Read More >>>

Fear and Loathing in Cocoa Beach

I apologize for the long interval between posts. Over the last couple of weeks I began writing two different tales of shenanigans and outrageous behavior in the local real estate market, a favorite subject for writer and reader. Alas, a moment of level-headedness led me to shelve both articles. Rather than leave the reader hanging, briefly, one was about an episode of collective insanity at one of Cocoa Beach's largest (and tallest) condos. After years of willingly filling out prospective buyers' lenders' questionnaires, the association decided that they would no longer complete the required form. I happened to be the unfortunate agent with a buyer seeking a mortgage who was first confronted with the new policy. The association, after refusing to complete the form, referred the lender to the association's attorney who likewise refused citing imagined liability. What the association and their attorney failed to anticipate was the consequence of not completing the form. Without a completed form, the 108 owners in the building would not be able to sell to someone who needed a mortgage to purchase. It would effectively become a cash-only building. Here's what the form looks like for those interested.

After a few owners were alerted to the consequence of the new policy a small uprising ignited, the questionnaire was swiftly completed by a Board member and the loan package proceeded to underwriting, disaster averted.

The other tale of real estate drama I chose not to share was having my behind chewed viciously by a listing agent over some excluded contents in a "fully furnished" condo. She felt that I was being unreasonable in asking for an excluded items list prior to making our best and final offer. We ultimately offered without the list which was then produced, five days after listing, with, in our opinion, excessive exclusions. We ultimately reached agreement but not before I endured a scathing tirade and a hangup. All part of the job. About hangups: I got to thinking that punching the red "END" button on a cell phone, no matter how vigorously, is not nearly as gratifying as slamming a heavy phone receiver into its cradle. The millennials among us will never experience that warm fuzzy. On to real estate activity in Cocoa Beach and Cape Canaveral.

Since May 1, fourteen single family homes and 45 condos and townhomes in our two cities have received accepted contracts and another 70 new listings have come on the market. During the same time 46 properties have closed. Over half, 26, of the sold properties sold for cash, no mortgage. Inventory this morning sits at 206 existing condos and townhomes for sale in Cocoa Beach and Cape Canaveral. There are another 27 pre-construction units offered but they seem to be attracting very little attention despite compelling pricing at at least one of the projects. There are 72 single family homes for sale in the two cities, half of them waterfront and just under half asking over a half million.

Super boat races in the ocean off Cocoa Beach this weekend. Best places to view other than from a helicopter or boat will be in the stretch from about the Pier to Xanadu. The boats will be available for up close viewing on their trailers Friday night downtown. Hope to see some of you there.

"We felt the lightning
 And we waited on the thunder."  __Bob Seger

Read More >>>

This Is No Social Crisis

Minutemen Causeway streetscape is nearing completion. Landscaping is being plugged in and it looks like the finished product will be beautiful. It's very welcomed. The oceanfront block is closed to vehicular traffic and is pedestrian only now, pavers and planters from Atlantic Ave. to the beach.

Sales activity in Cocoa Beach and Cape Canaveral continues at a plodding pace thanks to the depleted and showing no signs of changing inventory. With a total condo and townhome inventory of 209 existing units in the two cities, finding a suitable property has become more of an epic quest than a narrowing down of suitable possibilities. Those looking for a single family home are even more constrained with a total of 72 possibilities, half of those asking a half million or more.

In the two weeks since Sunday April 16, forty three people were successful in their condo search and were able to put units under contract. During the same two weeks nine single family homes were contracted. With a roster of hundreds of agents trying to get a slice of the beach pie and only a few dozen actually involved in transactions, you may soon find your last agent bagging groceries at Publix. Those with a gainfully employed spouse may have the luxury of retreating beyond the break on a locally shaped log. Tasty waves in Cocoa Beach are in much greater supply than attractively-priced real estate listings.

A third of the condos were on the market less than a month and half of those less than a week. It's competitive for buyers and units that are priced right when listed are gone quickly. This has changed seller and listing agent behavior. Why not overprice and see what happens? The seller can always reduce the price later and the listing agents need inventory so anything, no matter the price, is good for them. Speaking of overpaying, buyers, when faced with an unreasonable seller of a property they like, have to ask themselves whether it makes sense to knowingly overpay by X% now or risk not finding another suitable property during the time prices move up by X+Y%. Buyers who made this difficult decision at any time in the last several years came out ahead. Buyers who think like I do that the demand and supply dynamic will continue to nudge prices higher should not run from a small overpayment. Conversely, buyers who think that prices will not continue the current trend should stick to their guns and not pay a dime more than what the comps suggest is current fair value. It's important to know how to figure out what that number is or have an agent who can. No matter who is doing the estimation remember that one comp does not determine fair value. Randolph may have sold his unit down the hall for $220,000 but that doesn't automatically make mine worth $220,000 when similar units in other buildings are selling for $250,000. Be smart and look at all angles. Creative thinking may be rewarded.

You can't always get it
When you really want it
You can't always get it at all
Just because there's space
In your life it's a waste
___________________The Who - Another Tricky Day

Read More >>>

Welcome to the Slowdown

Snowbird season ended with a bang Easter Sunday and we woke up Monday morning to a different, much less hectic town. I can once again drive from downtown Cocoa Beach to Port Canaveral for lunch and expect to make the trip there, eat an excellent fish sandwich dockside and drive back in little more than an hour if need be.

In the week from Sunday April 9, 2017, through Sunday, April 16, a total of 18 condo units and seven single family homes received accepted contracts in Cocoa Beach and Cape Canaveral. The homes were in a range of asking prices between $289,900 for a non-waterfront 4/2 three blocks from the beach to $749,500 for a gorgeous two story 3000 square foot beauty on a canal.

None of the condos contracted during the week were asking over a half million and half of them were under $200,000. Current condo inventory for sale stands at 210 exiting units in the two cities. That's about a three month supply at the current sales rate. Pickings are slim for the fairly large numbers of prospective buyers.

Those of us in south Cocoa Beach have been entertained in the last week or two by frequent sightings of a wild bobcat that has been roaming the dunes. The swamp rabbit that's been eating my backyard flowers has apparently been successfully avoiding contact with this large predator as I continue to wake up every day to fewer flowers. Those of you with pets are probably well-advised to keep the little fluffies safely inside for a while.

Crews have been making noticeable progress (finally) on the Minutemen streetscape project with the center block leveled and sidewalk work begun. Palm trees are going in on the ocean end of Minutemen and my first impression is positive. It's a great visual improvement. Don't forget Friday Fest this Friday night downtown. I hope to see y'all there.

"A Southern accent is not a club in my bag." __John Oliver

Read More >>>

Winding Down

The crush of snowbird season 2017 is firmly behind us now. After Easter we will drift into a brief slow season before school is done for the year and summer vacations kick in. Anyone who has only seen Cocoa Beach during the busy snowbird or summer seasons might be surprised at the laid-back feel here in late April and May. It's a good time to be in Cocoa Beach.

Property sales were slower in Cocoa Beach and Cape Canaveral this past week, Sunday April 2 through today. There were 15 condos and two single family homes contracted during the seven day period while we gained 13 new condo listings and 5 new single family homes. Our inventory of properties for sale is virtually unchanged from last week with 219 existing condos and townhomes and 68 single family homes currently offered. Only a third of the single families have been for sale for longer than three months. In contrast, over half of the condos have been for sale longer than three months, a sure sign of overpricing. Of the 174 condos closed so far in 2017, 54 sold in the first two weeks on the market with 35 of those gone in the first five days. Price it right and it's gone immediately.

I would advise those of you looking to purchase to get your finances in order prior to starting the search. If you're going to be getting a mortgage, talk to lenders now, choose the one you want to work with and begin the process. You are guaranteed to become frustrated along the way with the many requests for documents so getting in front of that will make your life less stressful. Same for cash buyers. Know how long it will take for your funds to become liquid and have a proof of funds document ready to provide with your offer.

Post-Inspection Price Reductions

The large majority of purchase contracts that I see for beach properties are written using the FAR-BAR "As-Is" contract. "As-Is" in theory means that the contract is for the property in the condition it's now in, "as-is". In practice, "As-Is" means the buyer is willing to purchase the property for this price IF no deal-killing conditions are found during inspection. It's not uncommon for the buyer to go back to the seller after inspections have been done and ask for either repairs or a price concession for issues found during inspection. That is fair for hidden issues. Here on the beach the number one hidden issue is a rooftop AC compressor with one rusted foot in the grave. That is a reasonable issue for price renegotiation if it wasn't disclosed already. Going back after inspections and asking for concessions for issues that were either disclosed or are plainly visible is not going to be well received. The "As-Is" contract gives the buyer "sole discretion" to cancel the contract and receive refund of deposit if done within the inspection period. That puts total control of the contract (read: negotiating strength) in the buyer's hands. If the seller refuses to renegotiate the buyer can either stick with the original contract and move forward or cancel. It's worth keeping in mind that in the current market, a seller stands a good chance of finding another buyer while a buyer may have a much harder time finding another suitable similar property.

It's Master's Sunday and we have four players within two stokes of the leaders, Justin Rose and Sergio Garcia. It's gonna be a good one. John John Florence won the Margaret River Pro in West Oz yesterday at Main Break in sizable and challenging surf. John has all the raw talent that we saw from Kelly at the same age. The Cocoa Beach business golf league kicks back off this Tuesday at noon. Anyone who'd like to get together for a weekly nine holes is welcome. It's fun, rates are super low and there is a chance to win a few bucks on a skin. Come on out. It's a friendly bunch of guys and girls. Tee off anytime between noon and dark.

"My parents didn't want to move to Florida but they turned sixty and that's the law."  __Jerry Seinfeld

Read More >>>

The Difference a Week Makes

More of the same this past week in the real estate market but a lot different feel around town otherwise. We are into the winding down of snowbird season 2017 with the departure of the first major wave of northward migrations last Saturday. The traffic in Cocoa Beach was noticeably lighter Monday April 2. By the time Easter has come and gone it'll be back to dusty little cow town with walk-ons at the Cocoa Beach Country Club golf course the rule rather than a reason for the starter to look at the offender like an antler-sprouting Under Armour-wearing alien.

Condo sales in the week beginning Sunday March 26 were right in line with the previous trend; 24 units under contract in the week with five of them under contract in less than seven days. There was not a lot of oceanfront unit activity probably because that segment of our inventory is the most picked over and depleted. There were 22 new condo listings in the same seven day period along with seven new single family home listings. Nine homes went under contract during the week.

As of this morning, there are 67 single-family homes for sale in Cocoa Beach and Cape Canaveral at prices between $379,000 for a fixer-upper canal home in south Cocoa Beach to a brand new direct ocean five bedroom beauty downtown offered for $2.995 MM.

The condo inventory managed to shrink despite it's alarming low level with the combo of sales and withdrawals exceeding the new listings. We are down to 213 existing units for sale in our two cities. If I'm looking for an ocean condo I am encouraged to see that there are 100 listings showing as oceanfront. Being the skeptical sort I have to take a closer look. I must eliminate six as they are proposed and not in existence yet. Another 35 are asking over a half million and about half of the remaining have either no view or a peek so tiny as to be nothing more than a cruel reminder of what might have been. As a public service I must remind readers that those listings that appear too good to be true are exactly that, in every single case. When I receive an email about the very nice looking, 16 year old oceanfront 2 bedroom, 2.5 bath townhouse in Cape Canaveral asking $170,000 I don't even have to look at the MLS to know that it's another Villages of Seaport listing that the agent has misleadingly classified as "oceanfront". Listing agents feel justified doing that because the Villages property has a sliver of oceanfront that is as much as a half mile from some of the lovely townhomes. Owners in those units rarely repeat their first trek to the beach from their "oceanfront" condo opting instead to load the car rather than melt another pair of flip flops strolling the blacktop to the beach.

Negotiating tip 72: keep the chances of finding a replacement property in mind before walking away from a negotiation. Personalities often overtake logic during adversarial back and forths. Walking away from a $5000 impasse in negotiations and then waiting six months to try to buy another might make sense for a $100,000 property. Walking away over $5000 on a half-million dollar condo of which there are few available could very well cost much, much more six months down the road when the next target appears. Relative and absolute dollars are different. No one wants to overpay but sometimes the decision to overpay a little now for a property that hits all the buttons is more prudent than taking a gamble on finding a similar property later for today's price. We must play the cards we are dealt. Small unpleasantries now can eliminate large unpleasantries in the future.

Good hunting out there. I'm here if you have questions or a good knock-knock joke. Publix is safe once again. Feel free to approach the free coffee or blood pressure machine without fear of a running check against the beach toy display.

"The funds in your retirement account can be exchanged with zero transaction costs. Every day you do not sell them, you are deciding to buy them." __Ketawa - Boglehead

Read More >>>

There Will Be a Quiz

I skipped last week's summary so it's two for the price of one today. In summary, nothing much has changed with property sales almost exactly equaling new listings, a net zero effect on our meager inventory. For the seven days ending last Sunday, 23 condos and townhomes and 5 single family homes went under contract, six of them within a week of listing. During the same period there were 22 new listings.

In this most recent week, March 19 through March 26, there were another 24 new listings with 19 new accepted contracts, four of them in the first week on the market. There are 220 existing condo units and 66 single family homes for sale in Cocoa Beach and Cape Canaveral this morning. That is only slightly more than the number of properties that have gone under contract so far this year.

The Misunderstood and Often Wrongly-Administered First Right of Refusal

An unusual number of the condo transaction I've been involved in recently have been in first right of refusal complexes. There is a lot of misunderstanding about how this antiquated process works and how it should be carried out. From experience, I can say that it is often being done contrary to the procedure the condo docs proscribe. Procedures outlined in the condo docs vary among the dozens of local condo associations that have this right and the Board's or management company's interpretation of the docs is often wrong. First right of refusal gives the association and/or the members (owners) of the association the right to take over a contract to purchase from an outside buyer. For instance, if I contract to purchase a unit in a first right building, the association will offer my contract to the existing owners and they will each have the right to take my contract away from me and purchase the unit at the same terms. Some complexes mail a copy of the contract to all owners and some post it on a bulletin board or website. The length of time is usually between 10 and 21 days in our area. Most docs spell out that a sale to an existing owner is not subject to first right. There is a popular weekly rental complex in Cocoa Beach whose docs spell this exclusion out but the longtime management company insists on offering every contract out to the members regardless of whether the purchaser is already an owner in the complex. There are other complexes offering the right to members where that right only applies to the association and not individual members. I used to own in a complex with first right or so the owners thought. When challenged by a new purchaser, it was discovered that the first right did not and never had existed despite having been offered for over ten years. I would encourage everyone who owns in a first right building and especially Board members to read the condo docs carefully. There is a good chance that the procedure being used for the last two decades is wrong. It may be of little concern to an owner who is not involved in a dispute, but a lawsuit over the interpretation may prevent that innocent owner from being able to sell her unit.

And on another well-worn topic, I continue to receive requests to hold escrow deposits at title companies from agents who should know better. If there is an agent or broker out there who has a good reason for wanting a deposit held at a title company rather than a real estate broker's escrow account, I'd love to hear it. I'll give you a hint; there are none. In the event of a rare dispute over a deposit, I'll take a State of Florida free dispute resolution any day over dueling lawyers.

“We try to abolish intervals by our manic insistence on keeping busy, on doing something. And as a result, all we succeed in doing is destroying all hope of tranquility. You have to learn to immerse yourself in the silences between.”  ____from a book I read years ago that changed my perception of and the direction of my life. Thank you Lyall Watson for writing Gifts of Unknown Things

Read More >>>

It Fell and Can't Get Up

You know you're in a beach town when the front rack of DVDs at the public library is all surf flicks. Cocoa Beach Library DVD room pictured.

Will the Cocoa Beach and Cape Canaveral real estate market ever return to a healthy supply of properties for sale? I hope for more inventory but I'm not optimistic. Our historical supply peak was in 2006 when we had just under 1200 condo and townhouse units for sale. The long decline began the following year with short sales and foreclosures dominating activity and continued dropping through 2015 when we bottomed at less than 200 units for sale with the distressed inventory depleted. We are only slightly above that number at present with 222 existing units for sale. At the sales rate we averaged last year, we have enough inventory to make it to mid-July. There were 24 new condo listings in the week from Sunday March 5 through March 12. Seventeen units were contracted during the same seven days. There does not seem to be anything suggesting an increase in the supply in the foreseeable future. Barring external events this should continue to urge prices higher.

There are 46 direct ocean units with a view currently available, over half asking above $500,000. Lookers are out in droves but are having an increasingly difficult time finding fairly priced listings. Sellers are listing properties above fair value and hoping for a home run. Over 60% of the total listings have been on the market over 60 days, a clear sign of overpricing in a year when two out of five sold properties were on the market less than a month.

I think it's safe to expect prices to continue to rise in the near future. Slightly higher mortgage rates seem unlikely to impact sales with 60% of all condo sales so far this year having been paid for with cash. Things are only slightly different with single-family homes, 40% of those purchases this year paid for with cash. Good hunting if you're looking. Know that you're not alone and need to be ready to move quickly if you hope to succeed in your search.

"it’s a lot of work not being cynical. Sometimes it just ****ing sucks. Because you have to listen to both sides of every argument – ARRRRGHHHH! All the time it takes, damn!"  ___Henry Rollins

Read More >>>

February Roundup

Real estate activity in Cocoa Beach and Cape Canaveral continued at the same steady pace last week with 28 residential properties going under contract in the week from Sunday, February 26, to March 5. Six of those were on the market for a week or less. The inventory was barely changed with 27 new listings hitting the MLS during that same seven-day period.

There are currently 66 single family homes for sale in our two cities, exactly half of which have been on the market for less than two months. There are 244 condos and townhomes for sale, 27 of which do not exist yet giving a prospective buyer a universe of 217 existing units from which to choose. If an oceanfront building is a must-have, that number shrinks to 89 units with a median asking price of $375,000. A buyer looking for a direct oceanfront unit with at least two bedrooms and two baths asking less than $300,000 has two possibilities, both ground floor.

Closed sales for the month of February 2017 were considerably stronger than the same month a year earlier with 42 condos and townhomes closed, 40% of which were on the market less than a month and half of which were purchased with cash. Sixteen single family homes closed in February with a median time on market of 80 days. A third were purchased with cash.

The routine has not changed for those hoping to purchase. Have your financing and/or cash in order and be ready to move quickly when an attractive target presents itself. The best properties are going to those who act quickly. Our ongoing inventory shortage is showing no signs of abating.

After two days of temps in the 50s our winter that wasn't resumed with daily temps in the mid 70s to high 80s. The pleasant weather has made for crowded and slow conditions on the always packed (this time of year) Cocoa Beach golf course. For maximum enjoyment, golfers are advised to bring plenty of patience. The foursome in front will almost certainly be scavenging balls from every water hazard along the way slowing the pace even more.  After Easter, it's "back to good" to quote Matchbox 20.

Here am I floating
round my tin can
Far above the Moon
Planet Earth is blue
And there's nothing I can do.  __David Bowie

Read More >>>

My Calendar Must Be Broken

First off, I would like to thank all those who have offered comments, suggestions, and encouragement over the years. All feedback is appreciated. When I began writing this blog twelve years ago I made a decision to restrict my research and commentary to the Cocoa Beach and Cape Canaveral markets and to leave the rest of the county to others. This was probably originally rooted in laziness (less to research) but that narrow focus has allowed me to develop a deep understanding of this little market in the intervening twelve years. Other than macro themes affecting all markets, what was happening in Palm Bay or Merritt Island had little correlation to our beach markets. That hasn't changed. A buyer would be ill-advised to ask my opinion about or to engage my representation in the Titusville market. I would apply all of my experience to get the best possible deal with the least risk for my client but I wouldn't know what I may have overlooked in my research. There might be something market-specific and relevant to the property that only an involved local agent would know. To paraphrase a wise general, "we know there are things we don't know but there are also things we don't know we don't know. It is the latter category that tends to be the difficult one." If buying or selling beachside, I advise using an agent who is active in and knows this specific market. The consequence of an agent's ignorance can be costly for their client. Using an out-of-town agent is a risk that makes zero sense.

There were 25 new listings of residential property in Cocoa Beach and Cape Canaveral this past week. Four of them were under contract in four days or less. An additional 16 properties went under contract during the week. The tight inventory continues to be frustrating for those hoping to purchase. Someone looking for an east facing direct ocean condo above the ground floor for less than $350,000 has four possibilities this morning. If they must have a garage there is only one that will fit the bill. Raise that budget to $500,000 and there are several excellent units to consider. There is a new listing this morning in south Cocoa Beach, 4th floor, 3/2, tastefully and beautifully remodeled asking $499,000. Anyone looking in that price range would be advised to call their agent immediately. I doubt it will last for many days.

What a week it's been. For that matter, what a "winter" it's been. Thursday and Saturday were the two best days of surf so far in 2017. The water is warm enough that the wetsuits have been retired for another year. There has been a school of giant black drum roaming the beach between Port Canaveral and Sebastian Inlet for several weeks. They were off Cocoa Beach earlier this past week and several people caught the fish of a lifetime. I enjoyed seeing several of you on the riverboat last night. A good time was had by all.

"If you tell a big enough lie, and tell it frequently enough, it will be believed."  __Adolph Hitler

Read More >>>

Valentine's Week, 2017

There were no big changes in real estate activity in Cocoa Beach and Cape Canaveral the week of Sunday, February 12  to Sunday, February 19. The main themes of previous weeks remain firmly in place; low inventory and demand exceeding supply. Two-thirds of the 63 condo closings so far this year have been cash deals. Those hoping to purchase a condo who are planning to get a mortgage need to remember that when drafting their offers. Single family home buyers are more likely to use a mortgage with only a third of the 19 closed sales so far going for cash. Note to prospective buyers: one fifth of all closed sales so far this year sold in the first week on the market. If a property is desirable there will be multiple suitors immediately and the buyer who can't act quickly will lose out most times. I can say from repeated first-hand experience that those using an active local (Cocoa Beach) buyer's agent have a distinct edge. Three of my last four closings were under contract the first day on the market.

We had 25 new MLS listings of residential properties during the week. One was under contract within five days and one of the new listings was an old stale listing refreshed with a new MLS number. During the same week, another 28 previously listed properties went under contract, six of those single family homes.

Condo inventory is down to 216 existing units for sale in our two cities. That's less than the number of units that sold in a three-month period last spring. The same 27 pre-construction units are still offered with no takers since last week. Rounding out the shopping basket, there are 58 single family homes offered for sale, 28 of them waterfront.

The non-winter of 2017 continues to amaze with high 70s and low 80s most days. A wetsuit has not been needed this month for the several days of small, fun surf with surf temps hovering in the 70s.

Truth will always be truth, regardless of lack of understanding, disbelief or ignorance. __W. Clement Stone

Truth will always be truth, regardless of lack of understanding, disbelief or ignorance.
Read more at: https://www.brainyquote.com/quotes/keywords/disbelief.html

Read More >>>

The Week of February 5, 2017

New listings in the week of Sunday, February 5 to Sunday, February 12 came on at the lowest weekly rate so far in 2017. We had just 21 new MLS listings of  residential properties in Cocoa Beach and Cape Canaveral. Two were under contract within three days and three of the new listings were refreshed older listings.

Fifteen of this week's new listings were condos or townhomes and six were single-family homes. During the same week another 19 properties that had been listed prior to last Sunday went under contract making a net inventory gain of zero for the week. Twelve properties were reported closed during the week, ten condos and two single families.

Condo inventory stands at 220 existing units in our two cities with another 27 pre-construction units (same as last week) in yet-to-be-built buildings. There are 61 single family homes offered for sale, 28 of them waterfront, highest asking price $2.995 MM for a brand new beauty on the ocean at 1st St. South. Lowest priced waterfront currently offered is a fixer-upper on a canal in south Cocoa Beach just off the open river for $379,000. Exactly a third of all residential properties on the market have been for sale for over five months. We know what that means.

The ocean end of the Minutemen streetscape project is taking shape and the finished product looks like it's going to be beautiful. [First photo above] There are two colors of pavers in the pedestrian only street laid in a pleasing pattern with a few scattered planters. Looks promising. The second photo shows the block between Atlantic and Orlando avenues. It still looks like a Todd Hoffman mining project but I'm very hopeful now that we've had a peek at the ocean end. Foot traffic last night downtown didn't seem to be deterred by the construction. Lots of people out enjoying the balmy weather and excellent live music at multiple venues. The Uber guys were busy.

“If I paint a wild horse, you might not see the horse... but surely you will see the wildness!” __Pablo Picasso

Read More >>>

The Appraiser Is Not Buying It

The moon setting over Merritt Island this morning just before sunrise in south Cocoa Beach.

I can examine the details of every single sale in Cocoa Beach every day for years, go in many of those sold properties and know things about many of the sales that aren't made public yet my opinion of property values in Cocoa Beach will never be held in the same high regard that an actual appraisal is. The one exception to this is the occasion when an appraisal comes in lower than expected. In those instances sellers are very willing to dismiss the appraisal as garbage. In most cases, in most minds, appraisals are seen as definitive proof of a property's present value.

I called a listing agent last week to alert him that I was sending over an offer on his new listing. I asked about the unusually high price when we talked and told him that I'd include comps with our offer to justify our offering price. He said not to bother, the owner had an appraisal done before listing and the asking price was at the appraisal number. He was as surprised as I was at the high number but the seller had firmly wrapped her arms around that number and expected to receive it. She didn't counter the very fair offer that I presented. A spendthrift purchaser may come along and pay the appraisal number but it's a long shot at best. Incidentally, the unit needs tens of thousands of dollars of renovations to approach average beach condo condition. Maybe she can get the appraiser to buy it since he and she are the only two people who believe his opinion of value. Or she can sit on it and let the rising market bridge the gap in a year or two.

Maybe my opinion of value is wrong and the appraisal is correct. They are both opinions and presumably based on the exact same data. The difference is that my opinion comes with a ready, willing and able buyer and the appraisal is accompanied only by an invoice for services rendered. The unit is still active this morning.

Public Service Announcement: Property owners and tenants, change your AC filters. Here on the beach, the inside air handler will last a decade or two longer than the five to eight year life of exterior compressor unit IF filters are regularly changed. The system will do it's job better and with less energy usage as well. The same condo unit I mentioned above had a filter change log taped to the air handler so that the date could be noted every time the filter was changed. That's a great idea in theory. The last entry on the log was dated 2014 with a note from the person changing the filter that she used the last filter and more were needed. There was no filter in the unit when I checked and no spares around. It looked like it might continue to blow air another day or two. Expected high in Cocoa Beach today, February 11, 2017, is 78 degrees under sunny skies. Enjoy.

“People would say to me, “Hey man, you look just like Paul McCartney”, and I’d say: “I wish I had his money!”” __Paul McCartney

Read More >>>

Wrapping Another Week - Feb. 5, 2017

I shot the photo above last week on one of those magical still mornings when the Banana River is a sheet of glass except for the scattered schools of bait fish and feeding dolphins. Sure makes it hard to concentrate on work when surrounded by this kind of beauty.

The week of Sunday, January 29 to Sunday, February 5 saw a welcome increase in new listings from the previous weeks of 2017. We had 40 new MLS listings of  residential properties in Cocoa Beach and Cape Canaveral. Seven of those were older listings that were relisted, all but one at lower, more reasonable asking prices. [Note to sellers: In this tight market, if it isn't selling it is most likely overpriced unless it's a special property with no appeal to the many prospective buyers who are actively looking to purchase. It's always worth taking a brief shot at landing a lottery winner who is willing to pay a crazy price but if that hasn't happened after a few weeks it might be time for a de-orbital burn to get the price back in Earth's atmosphere.]

Thirty three of this week's new listings were condos or townhomes and seven were single-family homes. Three were under contract by this morning. During the same week another 18 properties that had been listed prior to last Sunday went under contract. Thirteen properties were reported closed during the week, eight condos and five single families.

The busy week of new listings helped to increase our existing condo inventory to 229 units in our two cities and another 27 units in yet-to-be-built buildings. Nothing has changed with the tendency to over-price with still more than a third of the total on the market for over six months. The single family home inventory is little changed with 59 homes on offer, 29 of them waterfront.

Those of you hoping to purchase, and there are quite a few, understand that over half of all listings are optimistically priced. It is your and/or your agent's job to try to educate the seller when making a fair offer. The seller's mental number, no matter how crazy high, is usually very real to her but a well-thought out and well-supported argument for a fair price sometimes works. A low offer that can't be justified with sold comps is, in this market, a snowball in a Waffle House kitchen.

Drivers, please be careful on our streets. Every crosswalk this time of year is crowded with snowbirds and the frustration we all feel having to wait through an entire traffic light cycle to turn onto A1A does not justify some of the aggressive driving I'm seeing. Snowbirds, likewise, look behind and beside yourselves when on those crosswalks. There are less-than-reasonable people driving some of the cars waiting for you and it is prudent to stroll defensively. Let's all enjoy this beautiful "winter" weather.

...the plane brought me farther.
I'm surrounded by water
And I'm not going back again
I got my toes in the water, ass in the sand
Not a worry in the world, a cold beer in my hand
Life is good today. Life is good today.
_________________________Zac Brown Band

Read More >>>

Weekly Wrap Up - Sunday January 29, 2017

I appreciate the positive feedback about last week's wrap-up, so, here's another.

For the week Sunday, January 22 to Sunday, January 29 there were 21 new MLS listings of  residential properties in Cocoa Beach and Cape Canaveral, slightly more than last week. Fourteen of those were condos or townhomes and seven were single-family homes. Four of the sellers priced their properties attractively and were under contract by the end of the week. Most of the others could not resist the urge to over-price. During the same week another twelve properties that had been listed prior to last Sunday went under contract. Nine properties were reported closed during the week, all but one were condos.

There are currently 219 existing condos and townhomes offered for sale in our two cities and another 28 pre-construction units. Nothing has changed with the tendency to over-price with still more than a third of the total on the market for over six months. There are 60 single-family homes on offer, 25 of them waterfront.

The strategy has not changed for those hoping to purchase. A prospective buyer who knows how to approximate fair value for their target property and is willing and able to offer when the right property becomes available stands a good chance of succeeding as long as her criteria are not too restrictive. Out of town buyers who are unwilling to offer without physically touring the property are at a severe disadvantage to those who have an agent they can trust to protect them in a quick sight-unseen offer situation. The best properties and deals rarely happen with properties that have been on the market long enough for American Airlines to deliver a buyer to Cocoa Beach.

About those restrictive criteria: With our tight inventory, some flexibility with must-haves can go a long way towards a successful purchase. A buyer looking for a condo that will allow their Labrador that has a two car garage has exactly three possibilities this morning. If they must be on the ocean, there is but one. As always, a purchaser with a buyer's agent who knows and is active in this market and understands what is working has a great advantage over those who may have selected a face from Zillow's gallery of paid agent listings.
___________________________________

"The best scams are the ones that are not actually dishonest but that simply set up the mark to make decisions against their own interest."  __dbr

Read More >>>

The Weekly Wrap - Jan. 22, 2017

I am contemplating adding a weekly or bi-weekly wrap-up like the one below into the usual mix of ramblings about agent shenanigans and misbehavior. Feedback and/or suggestions are appreciated. I'm fond of the thought of "less is more" but I've been known to take that to extremes as evidenced by a couple of month long gaps between posts in the past. Note that the data I'm reporting are totally dependent upon those entering said data, a group not known collectively as being dependable nor prompt. That means there will be some under-reporting due to listing agents who didn't get around to marking a listing as contingent or closed. That said, the picture of the overall trend is true.

For the week Sunday, January 15 to Sunday, January 22 there were 26 new MLS listings of  residential properties in Cocoa Beach and Cape Canaveral. Twenty two of those were condos or townhomes and four were single-family homes. Four of the 26 new listings were under contract in three days or less, a sign of spot-on pricing and strong demand. It must be noted that there is no level of demand that will overcome some of the extreme over-pricing that I'm seeing on a lot of properties. During the same week another 18 properties that had been listed prior to last Saturday went under contract. Only five properties were reported closed during the week.

There are currently 216 existing condos and townhomes offered for sale in our two cities and another 29 units in proposed projects yet to break ground. A third of the total have been for sale for over six months, a sure sign of over-pricing. The single-family home market is somewhat more rational with 60% of the 61 houses for sale on offer for less than three months.

I'll try to post this wrap-up every week if it looks like anyone is interested. If not, we'll go back to the random post when the wind changes direction schedule.

I enjoyed seeing a lot of you last night at the downtown Sip n Stroll event. Clear skies and temps in the mid 70s contributed to the attendance. There were 26 different stops scattered in a three block area of downtown, each offering a small splash of wine and an hors d'oeuvre to the hundreds of folks moseying about. Some stops like Twin Finnegans and Heidi's Jazz Club had lines out the door when I stopped by but I didn't hear any complaints. I missed well over half of the stops as I maintained a tight orbit around the Studios. It was fun.

“If a free society cannot help the many who are poor, it cannot save the few who are rich."
  [Inaugural Address, January 20 1961]  John F. Kennedy

A considerable share of the world's population still cannot afford comfortable housing, education and quality health care.
Read more at: https://www.brainyquote.com/quotes/authors/v/vladimir_putin_3.html

A considerable share of the world's population still cannot afford comfortable housing, education and quality health care.
Read more at: https://www.brainyquote.com/quotes/authors/v/vladimir_putin_3.html

A considerable share of the world's population still cannot afford comfortable housing, education and quality health care.
Read more at: https://www.brainyquote.com/quotes/authors/v/vladimir_putin_3.html

Read More >>>

Bandits Are Back in Town

Beware the junk fee. It's one thing to be bested by the other party in a transaction. It happens. It is another thing altogether to be taken advantage of by one's own team. Most purchasers who are getting a mortgage scrutinize their lender's disclosures trying to figure out if there are any junk fees and, if so, where they are buried. It can be difficult with today's complicated loan disclosures. Sellers are rarely concerned with the borrower's loan fees but the lender may not be the only shark in the tank.

In most Florida residential transactions, the seller is paying all real estate commissions which her listing broker shares with the buyer's broker, usually but not always, equally. There is a well-known local broker who frequently shaves off a larger portion for himself and tosses a leftover bone to the buyer's broker. Sellers agree in their listing agreement to the amount of commission and how it is to be shared with the buyer's broker. I'd love to hear Mr. Well-known's pitch for the unequal sharing. What Ms. Seller probably doesn't expect nor know to look for is an additional junk fee from her listing broker. I've written about these rip-off fees several times as far back as 2007 and thought they had quietly gone away by now but I encountered one last week.

I'm not sure at what point that $345 fee circled in red was disclosed to the seller or if it was just a coughed over small print item on the last page of the listing agreement. However it was disclosed/sold it was not justified and was a blatant rip-off of the client. In this instance the seller was already paying $12,762.50 which her broker shared equally with the buyer's broker. To gouge her for another undeserved $345 was, in my opinion, disclosed or not, shameful. My partners and I decided to form our company over a decade ago in large part because of our refusal to charge these types of fees to our clients when we were working for another local brokerage. At that time they cleverly called their junk fee a "Regulatory Compliance Fee". To quote Damon Wayans, "Homey don't play that." Adios.

Buyers and sellers of real estate, do not pay these fees. If you see one on the settlement statement, stop the proceedings and demand that it be removed. Trust me, your agent will be more than willing to pay that $345 out of his multi-thousand dollar commission check rather than let the deal die.

Some of the past posts about these fees for those who may have missed them.:
Unarmed Robbery Broker Style 
Revisiting Compliance Fees
Robberies Update

"Never make fun of people for mispronouncing a word. It means they learned it by reading." __Morgan Housel

Read More >>>

The Curious Case of the Disappearing Agent

This is the true account of an interesting and perplexing transaction last month with a mysterious buyer and his communication-impaired buyer's agent from another city.

November 3: A buyer's agent calls the listing agent of a condo in Cocoa Beach asking to show. The unit is vacant and available to show anytime, but, being from Orlando, the buyer's agent doesn't have access to the local electronic lockbox system so he asks if listing agent can unlock the unit for him. No problem.

November 8: After no contact for five days after showing the buyer's agent delivers a very low offer contingent upon a mortgage. The listing agent presents the offer to the seller who doesn't want to counter as the unit is in a condotel complex where a mortgage is impossible to acquire unless it is from an unconventional source. The listing agent suggests countering without a financing contingency. Done.

November 9: Buyer counters at a lower number, cash, close in 30 days.

November 10: Negotiations ensue and buyer and seller verbally agree upon a higher number, cash purchase with a 30 day close and buyer's agent asks listing agent to write it up and he'll get buyer to sign. Written, signed by seller and delivered to buyer's agent same day.

November 11: Buyer's agent sends a lender's condo questionnaire but no signed contract. What? This was a cash offer. Buyer's agent says don't worry, buyer is just exploring his options. OK, management company completes the questionnaire three days later and listing agent forwards it to buyer's agent. Buyer's agent goes radio silent. 

December 7: The buyer's agent hasn't responded to any emails, texts or phone calls from listing agent for three weeks. Suddenly,  26 days after last contact, he emails listing agent to say that buyer is moving forward if the property is still available and is sending the signed contract shortly. Listing agent informs seller that the dead have arisen but neither holds their breath.

December 8: Signed contract is received from the buyer's agent with escrow deposit due in three days and a ten day inspection period with a close date of Dec. 30. Buyer's agent returns to his Faraday cage and relights the "Do Not Disturb" sign. Listing agent marks the MLS listing as "Backups" rather than "Contingent" and notes in the narrative that the contract is "shaky" and encourages backup offers. Fingers are crossed but seller's and listing agent's expectations remain minimal.

December 14: Escrow deposit is received, three days late. Buyer's agent surfaces briefly to acknowledge receipt and reenters suspension chamber blithely letting the inspection period expire four days later with zero contact..

December 26: After a two week disappearance buyer's agent notifies listing agent that inspections will be done Dec. 27 three days before closing. Inspection period expired on Dec. 18.

December 27 late night: Buyer's agent emails inspection report with a demand for all items to be repaired prior to closing on the 30th.

December 28: Seller refuses to do repairs but offers $300 credit at closing for the small items found. and buyer responds that he is willing to delay closing to give seller time to repair. Seller says, no dice, and closing will still happen on Dec. 30 or he will keep the deposit which became non-refundable ten days earlier at the expiration of the inspection period.

December 29: Buyer wisely agrees to the $300 repair credit, signs closing documents and initiates wire of funds late in the day which does not arrive until Jan. 3 for unknown reasons.

January 3: Buyer's agent who has been absent since demanding repairs the previous week sends his last text to the listing agent "Did you receive commission yet?"

While frustrating, this all-too-common level of incompetence from some of my fellow practitioners does provide entertainment and makes for lively discussions when the used house salesmen gather round the table for refreshments. I'd like to thank this buyer's agent and his peers for making the rest of us look better than we would sans the contrast. A hearty toast merry fellows.

"Just keep the motor runnin' this won't take very long
By the time the police get here we'll be already gone
We've got to leave 'em hangin' we can't leave 'em no clues
Just take the money and run
Lord I love robbin' banks" ___David Allan Coe

Read More >>>

Realistic Expectations

9:30 AM, New Year's Day 2017 and the sky in Cocoa Beach is cloudless, there is no breeze with a temp of 70 degrees and an expected high of 77. According to the Cocoa Beach MLS there are 198 existing condos and townhomes for sale in Cocoa Beach and Cape Canaveral this morning. This is an all-time low. In addition, as I mentioned in my previous post, probably well over half of this tiny handful are over-priced by at least 10%. This makes for a frustrating search for the many prospective buyers hoping to buy in our town.

Condo sales for the year ended at 691 units, just a few less than last year's decade high with 31 units closed in 2016 that brought over $300 per square foot compared to just four in 2015. Prices continue their steady upward direction and I see no fundamental issues to change that trend. Mortgage rates are inching upwards but the Cocoa Beach condo market is not particularly sensitive to mortgage rates with over half of condo sales in 2016 paid for with cash, a trend that's been in place since 2008. Distressed sales have all but disappeared with just 5% of total sales in 2016 bank-owned or short sales.

Those of you looking for property here will be well-served by being aware of the low inventory situation and the price trend. If you're looking for a deal, you'll probably be disappointed, but if you can find a property close to current value, you'll probably be pleased with the value a year from now. We'd all like to purchase a beautiful beach property for less than it's current value. The big problem with that is that unless a seller is distressed she has absolutely no motivation to sell for a discount. In fact, with her property steadily appreciating, time is on her side. It only takes a few percent annual appreciation to cover the carrying cost of most properties. Why sell for for less than she wants if appreciation will pay the costs of not selling?  I've written dozens of posts about valuation and the dangers of becoming married to an estimation of value. A buyer whose search is focused on buying below his opinion of value better have an extremely accurate method for estimating value, a lot of patience and be prepared to possibly never buy. One of the dangers in the "must be a deal" mentality is that, in an appreciating market, values continue to move upwards while the search for  the "deal" drags on. Looking at sold properties in the last several years, even the highest dollar per square foot sales, the  buyers were rewarded with the passage of time.Your mileage may vary but it's probably worth keeping the historical trend in mind.

If anyone reading this lives at Ambassador Shores would you please have the maintenance guy put your navigational lights at the driveway entrance in the correct configuration of "red, right, returning" before a distracted guest takes out the bus stop some foggy night. And a big thanks to the person who took care of the crazy traffic light cycle on Atlantic Ave. at both Minutemen and Holiday Lane. My early morning drives through town are safer and faster. Happy New Year all and I hope the coming year proves to be prosperous and fulfilling. I'll continue my commentary on the market and the players in 2017. I appreciate all the encouraging words.

“My party has gone batshit crazy.” __Senator Lindsey Graham, Feb. 2016

Read More >>>