Non-repeating history

I’m back after getting the boat to Abaco from Florida. Photo above from yesterday morning at the home mooring off Lubbers Quarters with Elbow Cay in the background. This 42′ Lagoon Hybrid sailing cat is now available for charter, either bare boat or captained in the crystal clear waters of Abaco from CruiseAbaco.com

Our little real estate market has been on fire this normally slow time of year. After setting a four-year record for closed sales in the month of September, October followed suit with another four-year record. [EDIT] Due to a glitch in the MLS, the numbers I reported yesterday were not accurate. The charts are now corrected. October was unseasonably strong but not our biggest month of the year for closed condo sales as I reported yesterday. It was, however, the busiest October since 2005. The bulk of the activity, as has been true all year, was concentrated in the sub-$300,000 range and short sales and foreclosures accounted for just less than a quarter of all closed sales. November looks to continue the trend with both barrels loaded with pending sales. During the last 13 days, 36 condos and townhomes have gone under contract in Cocoa Beach and Cape Canaveral as reported on the MLS.

Foreign buyers taking advantage of the weak US dollar are part of the recent activity. Without making any predictions, the evidence suggests that our market is stabilizing. Even as some prices drift lower, some condo complexes have seen closed sales notch upward. Will prices resume the downward slide after a false recovery? No one knows but with prices in many cases well below 50% of the peak, buyers are stepping in. Markets work on supply and demand and demand is at a four year high right now. First chart below is 2008 and 2009 only.

Notice in the four year chart below that October 2009 has the highest number of sales of any October in the last three years. A trend with legs? We’ll see. I’m encouraged.

“History is more or less bunk. It’s tradition. We don’t want tradition. We want to live in the present and the only history that is worth a tinker’s damn is the history we make today.”
______________Henry Ford

 

I’m good.

Space shuttle launch as seen from the International Space Station.

September’s unseasonably strong sales trend is intact halfway through October. As of this morning twenty condos and townhomes listed on the Cocoa Beach MLS have closed in the two-city market, eight of them in Cape Canaveral. Last October saw only 23 total closed sales in the month. We look to easily trounce that number this year with 31 newly accepted contracts since the 1st of October in addition to those already pending. Half of the closed condo sales so far are for less than $180,000 with only one for over $500,000. The price trend continues to creep downward in most instances with a few notable exceptions.

There have been three single-family home sales in the two cities so far, highest price; $226,000 for a nice, updated 3/2 on Curacau in Cocoa Isles.

A top floor Mystic Vistas “A” building, east-facing, 3/2, furnished, closed for $403,500, twice what lesser view units have closed for recently in the complex.

A 3rd floor north corner, 3/3 Meridian, also furnished, sold for $725,000.

A top floor never lived in Garden Bay 3/3.5 closed for $410,000 or about $200,000 off the original asking price.

A 4th floor south view River Bend 3/2 in south Cocoa Beach sold for $240,000 as a short sale. Incidentally, only two of the twenty closed sales this month have been short sales, a surprising trend I noted last month.

A very nice, four year old Bayport 3/2 townhome with 2-car garage in Cape Canaveral closed for $205,000.

The uncertainty of association health was apparently mitigated enough by a super-low price on a foreclosed South Beach Keys unit that someone was willing to step up and take the risk. This direct Banana River 3/2 unit with 2-car garage in south Cocoa Beach that sold new in 2006 for $495,000 went for a shocking $175,000. Expect more news from this small complex.

A Majestic Bay townhouse in Cape Canaveral that sold new in 2005 for $274,900 sold as a short sale for $140,000. Not bad for a 4 year old townhome with 2-car garage.

And, a Brisa del Mar condo conversion on Ridgewood Ave. that sold for $200,000 in 2005 closed for $90,000.

I was sitting in the water recently on a small, glassy day on a 7′0″ fun shape when my 15 year old neighbor paddled over and asked why I wasn’t riding my longboard. I said, “I’ll ride it if you’ll go in and get it for me.” Laza looked at me like I’d suddenly sprouted antlers, said, “I’m good” and paddled off for saner waters. Kids.

I’m off on a boat delivery tomorrow and will be incommunicado for a week or so, weather depending. In the interim, Danielle can be reached at danielle@walkerbagwell.com for any issues or inquiries. As a wise man once said, “All work and no play makes Jack a dull boy.”

 

A tale of two sales

Short sale craziness continues. The short sale team in my office took two short sale listings a few days apart in August. At the time, neither seller had done any preliminary work with their respective lenders. The team went to work getting the hardship and other required documentation together from the sellers for submission to the lenders. Both properties got offers shortly which were submitted within days of one another to the lenders along with all requested documentation. Both sellers had legitimate hardship. Forty days later, one sale was approved in writing and ready to close while the other lender was still asking for more and more documentation. The seller confessed yesterday that he had continued to make mortgage payments the whole time that we were trying to negotiate a short sale with his lender. Asking a lender to approve a short sale while the mortgage is current is like panhandling in an Armani suit. Chances of success are slim.

The take-away: If a property owner has the resources to stay current on the mortgage and does so, the lender will be way less motivated to agree to a short sale or modification. Why should a lender write off tens of thousands of dollars when they can just continue to accept timely payments? Any reader considering pursuing a short sale needs to understand that hardship must be real and able to be proven. Prepare to be asked for documentation similar to that required to obtain a new loan. Without proof of hardship, chances of approval approach zero. With proper documentation, real hardship and an experienced short sale negotiator a seller stands a good chance of successfully selling a property short.

“You have to learn the rules of the game. And then you have to play better than anyone else.”
___________Albert Einstein

 

Wake up – September’s finished

How bout that graph? September condo sales in Cocoa Beach and Cape Canaveral spiked up considerably over the previous year with 45 closed MLS sales of condos and townhomes during the month. There were four closed single-family home sales during the month, all in Cocoa Beach. One surprising stat was the fact that, of the 45 condo sales, only five were short sales.

The lowest price condo sale was $13,800 for a foreclosed 1/1 Golden Gate Manor unit in Cape Canaveral that sold in 2006 for $82,500. That’s a mind-numbing 83% off the peak. The highest price condo sale was $555,000 for a never-lived-in Michelina 5th floor corner, 3/3, 2524 sq. ft. This same unit was asking $849,500 just one year ago. It was the only condo sale for more than $500,000 in the month. The adjacent, slightly bigger Michelina unit (not a corner) also closed for $450,000 or $177 per square foot. Not bad for brand new oceanfront, even if side view.

A 7th floor, 3/2 Crescent Beach Club in south Cocoa Beach closed for $325,000 which bumps the comps down slightly for that building which is well into a major and very expensive concrete restoration project.

Harbor Isles was on fire in September with five closed sales. Not surprisingly, the ever-present Betty Siegel was involved in three of those sales. Looking back over the stats for the year, there have been ten MLS sales in Harbor Isles. Of the ten, my office has represented one or both sides of eight of those transactions with Betty being involved in six. You go, girl.

Another Hacienda del Mar direct ocean 2/2, 4th floor with garage sold for $248,500. It was in original condition.

I was able to close a short sale at Cape Winds of a direct ocean ground floor 2/2 with the wide patio for $210,000, a new low for direct ocean units in this very popular complex. With this sale and two other pending short sales there, the other overly optimistic sellers will now have to come to terms with the new reality.

There were three sales in the month of 2 bedroom units at Ocean Woods in Cape Canaveral at prices from $129,000 to $155,000.

In head-scratching news, in a year in which a total of only 20 units have closed for over $500,000 ( half of those at The Meridian) eight pre-construction units in an unbuilt oceanfront building in south Cocoa Beach popped up on the MLS this week at prices from $800,000 to $1,050,000. The same developer is offering 16 other units in four different completed new buildings on the MLS, most or all having been reduced substantially in price. A+ for optimism.

Fishermen, the mullet run is back on in force. There are acres of mullet moving south along the beach with packs of predators in attendance. This is the best time of year for fishing from the beach with opportunities to catch snook, Spanish mackerel, bluefish, kingfish, trout, redfish and tarpon among others. Take advantage if you enjoy fishing but, whatever you do, enjoy October for all the other reasons that make this month my favorite of the year in Cocoa Beach.

“As my memory rests but never forgets what I lost
Wake me up when September ends.”____Green Day

 

No one the wiser

I often write pieces that never see the light of day here on the blog. The piece that I wrote yesterday and intended to post today will become one of those lost letters. In my next-day read this morning the account appears somewhat inflammatory and would probably have caused some ruffling of feathers and almost certainly some backlash. Perhaps less specific references to the guilty parties will make the story acceptable. Here goes.

There once was a broker who ran a successful real estate office in a cute coastal town. One of the broker’s trusty agents found an opportunity to pocket $325 of his client’s money in a property management transaction with no one the wiser. The client from whom the money was stolen found out quite by accident a few months later about the theft and confronted the agent. The agent played dumb and referred the client to his broker for resolution. The broker defended the agent and refused to return the client’s money. The client elected not to pursue the matter. The larcenous agent continued his career with now-obvious support for his business style and the broker rose to a more prominent position in the local real estate community and continued to prosper. No one the wiser.

“The greatest way to live with honor in this world is to be what we pretend to be.”
_____________Socrates

 

Mid September Update

Thanks to all who chimed in on the last post. Closings are slow but plugging along with 20 closed condos and townhouses so far in the month of September in Cocoa Beach and Cape Canaveral. Sales ranged from $32,000 for a foreclosed, 464 sq. ft. 1/1 condo conversion in Cape Canaveral to $335,000 for a brand new, 3rd floor, direct river, 3/2.5 with 2210 sq. ft. at Garden Bay in Cocoa Beach. Other sales of note closed so far included;

Ground floor 2/2 Cape Winds direct ocean for $210,000

2nd floor, direct river, Harbor Isles 2/2 for $220,000

16th floor, direct ocean Stonewood 2/2, very nice for $315,000

6th floor, south ocean view Royale Towers 2/2 for $225,000

There have been three single family homes sold so far, all in Cocoa Beach. They ranged from a small, trashed 3/2 short sale on Samar that sold for $110,000 to a direct river 4/2 on Bali that closed for $389,000.

Checking the MLS this morning I find a total of 131 pending or contingent residential properties in the two cities. Over half of these contracts are short sales. Of 716 total active residential listings, only 94 are short sales. This skew between offered and contracted numbers makes it clear that the action in MLS-listed properties is heavily concentrated in the distressed properties. If you’re hoping to take advantage of the market, don’t make the mistake of only looking at distressed properties. There are a few sellers who understand the market dynamics who have priced their properties accordingly without the hassles of the short sale process. On the other hand, if you have a good property contracted as a short sale at a good price and are losing patience because of the length and opacity of the process, be strong. Unless you find something better in the meantime, your patience may be eventually rewarded with approval. We have had a flood of short sale approvals recently after months of very little contact from the lenders, so, be aware of the frustration of the process, be patient and have a Plan B in case you don’t get approved.

Snook are still being caught in the surf and the mullet run hasn’t really peaked yet, so, there’s plenty of opportunity for everyone to get out there on the beach and catch a great dinner.

“The unspoken word never does harm.”_____Lajos Kossuth

 

Blurring the Ethical Line

eth·i·cal Pronunciation: \ˈe-thi-kəl\
1: conforming to accepted standards of conduct <ethical behavior>

Rhetorical questions:

1. Assuming no dishonesty, is it ethical for a listing agent to use all of their skills, experience and knowledge to try to get their clients the highest possible price at the best possible terms? Is the answer the same if this behavior contributes to rising prices, harming future buyers?

2. Conversely, also assuming no dishonesty, is it ethical for a buyer’s agent to use every bit of his skills, experience and knowledge to obtain the lowest possible price at the best possible terms for his client? Is the answer the same if this behavior contributes to declining prices, harming future sellers?

I ask these questions for a reason. I represent a lot of buyers. In my representation I always use every scrap of market knowledge and all my negotiating skills to try to do the best possible job for my clients which usually means the lowest possible price at the best possible terms. I do this with honesty and fairness to both sides of the transaction. My efforts in recent years have often been a part of the chain of lower and lower selling prices in many complexes and neighborhoods. It was reported to me this past week that my aggressive representation of my clients, buyers all, was being characterized by at least one Cocoa Beach citizen as unethical because it has contributed to lower prices in our market. While the premise seems preposterous, at least to me, I welcome comments here on this blog from anyone who has some insight to share. I certainly know that I tend towards the aggressive in my negotiating but I feel strongly about my character and ethical standards and, in this case, take offense to the accusation. I will take all comments with an open mind. Thanks for reading. Back to our regularly scheduled programming with the next post.

“If it is not right do not do it; if it is not true do not say it.”
___________Marcus Aurelius

 

August sales

Sorry for the break in posts. I avoided the Labor Day crowd in the mountains of North Carolina.

The numbers are in for August. As you can see from the graph above, we have taken the first step off the seasonal sales cliff. After trending above last year’s numbers in June and July we had a total of 27 closed MLS-listed condos and townhomes in Cocoa Beach and Cape Canaveral in the month of August, slightly behind last year’s 30 units closed. The sales ranged from $37,000 for a tiny Lamp Post efficiency in Cape Canaveral to $2.01 million for the entire top floor of Ocean Cove in south Cocoa Beach. This particular brand new unit was 6000 square feet with 4+ garage spaces and a private boat slip across the street on the Banana River. Shortly after this sale closed, the developer slashed over a million dollars off the prices of the remaining unsold units in the building.

Sales of note included a Meridian resale that went for $575,000, over a hundred thousand less than the new purchase price just two years ago. In south Cocoa Beach a fifth floor Crescent Beach Club south corner unit closed for $425,000. It was a three bedroom unit with 2278 square feet. Next door at the Constellation a 6th floor unit with 2419 square feet sold for $395,000 and a 5th floor south corner beautifully totally remodeled unit at Coral Sands went for $405,000.

A foreclosed Perlas del Mar in Cape Canaveral sold for $165,000, a remarkable $285,000 less than the new purchase price two years ago. A 2/2 townhome at Villages of Seaport closed for $107,000 as a short sale.

There were only four closed single-family home sales in the month, none for more than $200,000 and none on the water.

For those looking for direct ocean units in the lower price range, I can find 29 units this morning with at least two bedrooms asking under $300,000 that are east facing. Over-priced listings still dominate the declining inventory but gems are there for the patient. If you’d like a daily dose of new listings, price drops, sales and market news of note you can follow my Twitter feed. In case you missed it, snook season has opened and the fish are already on the beach feeding on the early schools of mullet making their annual run southward. Use a cast net to catch mullet from the beach, put one back out with a weight to keep it on the bottom and hang on for some of the best eating in the ocean.

Comments are welcomed on any of the posts here.

“When a true genius appears in the world, you may know him by this sign, that the dunces are all in confederacy against him.” _________Jonathan Swift

 

If Willy Loman had a blog

More of our great surf recently. Laza tags a screamer with typical nonchalance.

I continue to be amazed at the disingenuous hype being dispersed by others within my industry. I can’t go to a real estate blog or website without reading the same old crap intended to entice buyers into making a move and purchasing a property. Folks, you need to be very careful choosing a buyer’s agent to assist you in your search. There are plenty of warning signs that should give you pause, chief among them, the absence of cautious advice and/or undiluted enthusiasm about the market. If your agent is spending too much energy convincing you that everything is great with our market, you need to reconsider his motivations and sincerity.

and … reason Number 1 that your agent may not be a good choice: He makes a blanket, unqualified statement containing any variation of the words, “Now is a good time to buy.” It may be a good time to buy some isolated properties, but, as I research the available listings on our MLS, I find far more properties that are severely over-priced than those that may qualify as a “good buy”. If you accept that well-worn phrase and come into our market thinking that it applies to all properties, you may well become the next bagholder.

Having said all that, now is a good time to sift through the available properties looking for those good deals hidden among the clutter. Arm yourself with knowledge of recent sales that are comparable to the property type you’re seeking and keep your focus. Don’t chase something you don’t want just because it’s a deal or because you’re impatient. Your search may have started with direct ocean units and became diverted to side views because of the lower prices. As I’ve said before, that forty grand you saved on the purchase price might not taste as sweet when you’re sitting on your side-view balcony staring at the building next door with a cold north wind in your teeth. Patience has been rewarded this year.

Speaking of patience, let’s discuss short sales. A buyer in a short sale is at the total mercy of the listing agent and, in many cases, completely in the dark throughout the process. I have worked with some real pros on the listing side (you know who you are and I thank you) and with some that are completely clueless to the process and have a possibility of closing a deal approaching zero. In addition to the listing agents who can’t close a short sale, there are short sale listings in our system that are, I suspect, just bait to get the phone or in-box lit up. Proceed with skepticism and caution in this part of our market and don’t even consider offering on a short sale unless you are willing to wait indefinitely. If you do put in an offer on a short sale, know that closing is not certain. Keep looking while the bank twiddles it’s thumbs. It’s possible to find non-short sale properties at the same levels as many of the short sales without all the hassles.

MLS inventory August 31, 2009 Cocoa Beach & Cape Canaveral

Condos, all prices_____635 – 22 sold so far in August
over $500,000_________78 – 22 sold since New Year’s Day
Single family homes___108
over $500,000_________43

“Expect ALL estimates of time to be overly optimistic.“_____Larry

 

What a day it was

Sunday, August 24 in south Cocoa Beach. It was like this all day except for about an hour during which we endured an intense electrical storm that chased everyone from the beach. Of course, we locals were back in the water by 5 PM when the sky went blue again and the tide ebbed. The shot above is of one of my friends and her son sharing a wave out back about midday. You can click on the photo for a larger image.