The World is a Vampire

Delta rocket launch, sunrise Aug. 17, 2009

We’re halfway through August and, as expected, activity has slowed. We’ve had 12 closed sales from the Cape Canaveral and Cocoa Beach MLS, 11 condos and one single-family home. The home was a small 3 bedroom, 1.5 bath short sale on south Orlando Ave. that closed for $139,000. The sold condos ranged from $79,900 for a foreclosed, non-waterfront 2 bedroom 2 bath unit at Costa del Sol to $425,000 for a 5th floor direct ocean, southeast corner at Crescent Beach Club in south Cocoa Beach. This unit had 2278 square feet with 3 bedrooms, 2 baths and a massive wrap balcony.

An interesting sale was the 2nd floor, southeast corner at Palmas de Majorca in downtown Cocoa Beach. This 3/2 unit had been on the market for 731 days, always overpriced and was down to $549,000, the most recent still-too-high asking price when something enticed the seller into accepting $400,000. Maybe he read my “Breakdown, go ahead and give it to me” post or perhaps the appraisal came in low. At any rate, for $186 per square foot, this one was a deal. The too-close boardwalk traffic intruding on the privacy from the 2nd floor probably contributed to the low price. It was, beside that shortcoming, a very nice unit.

Another good deal was a Constellation 3/2, this one on the 6th floor with 2419 square feet and panoramic views of the ocean and the Banana River across the street. Sold for $395,000 or $163 per square feet. Don’t expect to get a smaller unit for these $/sqft numbers as large size contributes to the low ratio.

Someone picked up a 2/2 direct river, 2nd floor Sunset Harbor for $146,000. Needed some updating. Another foreclosed 4 bedroom, 2.5 bath Perlas del Mar in Cape Canaveral sold for $165,000. It sold new two years ago for $450,000.

The 3rd floor south ocean view Cape Winds, 1 bedroom 2 bath unit that was offered as a short sale for $150,000 got a contract in just seven days.

That’s it for now. New listing activity is slow as are sales and there have not been a lot of compelling new offerings. That is normal for this time of year. If the short sale bottleneck opens up we could have a surge of closings which would be welcome. I received lender approvals this week for two short sales that have been in the system for 105 and 75 days while I have four others that have been leapfrogging desks for up to 150 days without approval. Go figure.

“Despite all my rage, I’m still just a rat in a cage.”
_____________Billy Corgan

 

Putting right along

Photo above was taken from the top floor of Xanadu looking south towards downtown Cocoa Beach. The Pig and Whistle Pub is the brown roof building in the dead center of the shot. The white buildings on the river in the top left are Harbor Isles with Merritt Island off in the distance.

Sorry for the lag between posts as I’ve been traveling. We are back on the regular schedule now.

Action in the Cocoa Beach and Cape Canaveral condo market has been strong so far this month with 46 accepted contracts since June 1. Fourteen of those were short sales and a few others were foreclosures. Only 2 of the units were asking above $500,000. With sales at Meridian winding down to the last few developer units I expect the over-$500,000 sales to drop off the cliff. Of the fourteen condo sales over $500,000 so far in 2009, eight were Meridian units. That leaves us with a rest-of-the-market sales rate of one half-million-dollar-plus condo per month. That’s with an inventory this morning of 97 units, eight years worth not even factoring in the shadow developer inventory which will easily swell that number by 50% or more. Not good news for the luxury condo market.

We have had an impressive 25 closed condo sales so far in June, two over $500,000, both at Meridian. Twenty of the thirty sold for less than $230,000. That paints a pretty clear picture of our market. If I gave any credence to median price numbers that metric would look horrific year over year. The bright spot in all this is the fact that so many units are selling despite significant hurdles with financing and the difficulty of bringing a short sale to the closing table.

Only one single family home has closed this month in our market, a direct Banana River home on Jack Drive that closed for $450,000. Another three went under contract since the 1st.

Of the sales of note so far this month, my favorite has to be the Fountain Cove 3rd floor unit that closed Monday for $185,000. I presented an offer exactly one year ago today on this unit for $190,000 when it was listed for $243,500. Not only did the listing agent rudely dismiss the substantiating comps we included with our offer, she actually called back after the seller refused to counter to deliver a second message from the sellers, “Tell them to go buy another condo.” We did. You can read the entire sadly funny exchange here. Others of note included;

• A five year old top floor, 1918 sq.ft. Solana on the River closed for $215,000 as a short sale.
• A 2 year old 3/2 Puerto del Rio in Cape Canaveral with 1862 sq.ft. sold for $205,000 as a short sale.
• A direct river River Bend 3/2 with 2050 sq.ft. and a boat slip in south Cocoa Beach was stolen for $260,000.

MLS inventory June 18, 2009 Cocoa Beach & Cape Canaveral

Condos, all prices_____681
over $500,000_________97 – 14 sold since New Year’s Day
Single family homes____102
over $500,000_________39

“If you can’t make it good, at least make it look good.”
_________________Bill Gates

 

Halftime Report

The kind of morning that has me running through all my excuses for trading the desk and the Blackberry for a beach chair and a Randy Wayne White novel.

Halfway through May and this market is very active. Lenders are still killing deals right and left but a substantial number of persistent buyers are riding deals through closing. I have not experienced this level of activity in a few years. As of this morning, May 16, a total of 19 condos have closed in Cocoa Beach and Cape Canaveral at prices from $25,000 for a small foreclosed Golden Gate Manor 1/1 to another new, top floor Meridian for $630,000. All but two sales were for less than $300,000. Deals of note included the following:

Oceanfront buildings
3rd floor east corner small, 3/2 Cocoa Beach Towers – $340,000
3rd floor south view 2/2 Windward East – $285,000
3rd floor south view 2/2 Driftwood Villas – $210,000
Ola Grande ground floor 2/2 – $200,000

In non-waterfront sales, 2 units at the 4-year old Shores of Artesia closed for $170,000 and $150,000. The latter was a short sale. A foreclosed, ground floor corner 3/2 at Portside Villas went for $130,000. A big, 3-year old foreclosed Perlas del Mar 3/2.5 sold for $162,000. Sold new 2 years ago for $453,000. A big, 3/2 Bayport villa short sale closed for $190,000. New price in 2006 was $350,000.

In Banana River buildings there has only been one closed sale so far in May, a 2nd floor 2/2 at Rock Pointe for $180,000.

Of the contingent and pending contracts yet to close are several that will qualify as smoking deals. I will report on them as they close.

Piss and vinegar can’t be summoned on command. The muted colors of a muted life will not suddenly brighten because you think it a good idea they should.
___________Travis McGee

 

Locked Out

To take the closest route to the ocean by water from Cocoa Beach, Cape Canaveral or Merritt Island, a boat must pass from the Banana River through the locks above at Port Canaveral. The single lock system helps maintain water depth in the Port for the cruise ships and submarines and prevents strong tidal currents, a nice benefit for boaters. For impatient fishermen, there are multiple ramps and marinas in the Port east of the locks.

As of this morning, March 14, there have been 9 closed condo sales in Cocoa Beach and Cape Canaveral posted in the MLS. There was 1 MLS-listed single-family home closed in the same period. Sales of note include the following:

These first three are interesting for their similarities but very different levels of appreciation over the years.

A 2/2, 2nd floor non-waterfront unit in Cape Shores on the river sold for $68,000. It was not a short sale or foreclosure and was first listed in July 2007 for $139,900. This unit last sold in 1982 for $56,000. It was built in 1973.

An almost identical sized 2/2, 2nd floor non-riverfront unit at Four Seasons on the river, built in 1980 closed for $133,500. It had a garage. It sold in 1980 for $56,000.

Another 2/2 at Four Seasons also closed this month. It was a 3rd floor, 2/2 direct river with garage and closed for $172,500. It also sold in 1980 for $56,000. Can you say location, location, location?

A top floor (5th), 3/2 short sale at Puerto del Rio closed for $176,000. This 3 year old beauty with big wrap-around balcony sold new in August 2007 for $335,000.

A top floor (5th), 3/2 lakefront unit at Harbor Isles on the river in south Cocoa Beach closed for $199,900. Sold new in 1993 for $114,600.

A big, 2/2, 5th floor, direct ocean unit at Emerald Seas closed for $290,000.

The highest price condo sale of the month so far was a short sale of the entire 2nd floor of Riomar in south Cocoa Beach. This building has only 6 units total with each 3008 sq. ft. unit occupying an entire floor. The upper floors have magnificent views in every direction from the sweep of the beach north and south to Merritt Island across the Banana River. Selling price was $550,000. Sold in 2004 for $740,000.

“I didn’t say this had to be, you can’t blame these things on me.”
__________________Lou Reed

 

What Goes Up …

Notable price drops and new listings since February 1st from the Cape Canaveral and Cocoa Beach MLS.

Brand new, foreclosed, never lived in 2300+ sq.ft. canal home off Minutmen Cswy.
_______________________$459,900

Two year old, 7 bedroom, 4.5 bath, 6300+ sq.ft. canal home with all the bells and whistles, Originally asking $1.3 million, dropped to
_______________________$799,900

A 2 year old, 2300+ sq.ft., 4 bedroom, 2.5 bath townhome in Cape Canaveral that sold new for $450,000, offered this week as a short sale, suggested price; _______$199,500

Two year old, 3 bedroom, 3 bath, 2100+ sq.ft. river condo in south Cocoa Beach, sold new in 2007 for $549,900, now offered (not a short sale) for
_______________________$398,500

A 3 bedroom, 2 bath Cape Canaveral townhome that sold new in 2006 for $255,000, now offered as a short sale, suggested price,
_______________________ $149,900

And crazy price drop of the month, the previously profiled 4300+ sq.ft. canal home that started at $1,199,000 last June posted it’s 29th teensy price drop this month to bring it to a still-too-high $979,000.

There are plenty of others out there but I thought these would be interesting. As I’ve mentioned in recent posts, if you’re not paying cash, be prepared to pony up more than you thought for a down payment. Talk to a lender now to find out what may be required of you for a mortgage, especially if it’s a condo, AND, pray for warmer weather.

Well he who waits for the day’s riches will be lost
In the whispering tide
Where the river flows
Tomorrow never knows

__________Bruce Springsteen

 

Cocoa Beach Potpourri

This is a secret little kayak launching ramp on the Banana River behind the Cocoa Beach Country Club. I shot the photo early today on our first truly chilly morning of the winter. I was tempted to discard the flip flops in favor of closed shoes but habit overruled reason.

I thought for today’s report I’d sift through the available offerings and post my favorites. None of these are listed by my office. I’m more than a little surprised that some of these haven’t sold yet considering the price.

First up is a big price reduction this morning of a direct river 2/2 at River Lakes in Cocoa Beach just two blocks from the ocean. Comes with a private garage and is now offered for $165,000.

This next one is a mystery. Direct ocean 2/2 at Waters Edge in south Cocoa Beach offered for $164,000. Does the somewhat obstructed view and lack of a garage really mean this unit should be selling for less than $122 per square foot?

How about a direct river 2/2 at Harbor Isles for $169,000? It’s a short sale, so, that price is subject to bank approval. That’s half what these units were selling for a couple of years ago. There is also a lakefront 3/2 at Harbor Isles offered for $190,000. Both of these have private garages and use of three pools.

Lowest price unit with a deeded boat slip is a 2nd floor, 2/2 unit at Beachwalk behind the Publix Plaza offered for $199,000 with garage.

There is a 2nd floor, direct river 2/2 at the small River Place building in south Cocoa Beach offered for $197,900. It has an unobstructed view across the wide part of the river to south Merritt Island and the beach is right across the road. Comes with a garage.

Among the short-term rental condos there are several that stand out. Lowest priced short term rental unit in Cocoa Beach is a no-view studio at the Marlin Apartments behind the Holiday Inn, asking $130,000. Lowest priced 2/2 unit in Cocoa Beach is a side view Chateau next to the Pier offered for $239,000. It has a little peek of the ocean. Lowest price 2/2 with an unobstructed ocean view is a top floor Spanish Main for $299,000. Photo of view below.

My favorite of the available short-term units is a 4th floor south view Cape Winds one bedroom unit. The one bedroom units at Cape Winds are unusual in that they have two full baths making them comfortable for four people. They rent in the $900 per week range making the asking price of $179,000 quite attractive. View from this unit below.

In non-waterfront properties, there is a foreclosed, 2/2.5 townhouse, 2 blocks from the ocean and downtown Cocoa Beach with 1827 sq.ft. asking $124,900.

Lowest priced waterfront single family home is a partially gutted 3/2 on Cocoa Isles Blvd. Asking price; $209,000. Needs lots of work. Builders were paying $400,000 for these houses a few years ago and tearing them down to build new ones. If you don’t want to have do any work, you can get into a big, 3/2 home in excellent condition on the water with dock and boat house close to the Cocoa Beach schools for $370,000. View below.

Note to prospective condo purchasers: Freddie Mac and Fannie Mae have just announced revisions to their down payment requirements for Florida condos. If you haven’t talked to your lender in the last week about your condo purchase, you need to check back in to see if your loan is effected. Even though rates continue to fall, standards are becoming increasingly strict, even for owner occupied units.

“Your time is limited, so don’t waste it living someone else’s life.”
____________Steve Jobs

 

Cocoa Beach 2008 Year in Review

A Cocoa Beach kid scratches out the last sand message of 2008 on a warm and beautiful December 31, 2008.

The year 2008 began on a gloomy but hopeful note as sellers of real estate in Cocoa Beach and Cape Canaveral were reeling from the price drops of 2007, but, just like the two previous years, were hanging their hats on the spring “selling season”. The season brought increased sales but, just like the two previous years, more downward pressure on prices. There was a big increase in waterfront single-family home sales in 2008 with a total of 45 MLS-listed homes selling compared to only 28 in 2007. I think this can be attributed to the reduced expectations of sellers as they finally began accepting the new reality and reduced their prices to a point attractive enough to generate offers. In 2008 there were 10 MLS sales of canal homes in Cocoa Beach for $300,000 or less with the lowest going for $200,000 compared to only two going for under $300,000 in 2007. No MLS sales of single-family homes exceeded $1 million in 2008 unlike 2007 when four sales surpassed the million dollar mark.

The condo market was similar with not a single sale over the magic million dollar mark in 2008 compared to five closed MLS sales exceeding $1 million in 2007. Over half of all condo sales in 2008 in Cocoa Beach and Cape Canaveral were for less than $200,000. For developers, 2008 was a particularly dismal year with sales practically at a standstill for the luxury buildings with one shining exception, The Meridian. Of only 20 MLS sales of condos over $500,000 in 2008, eleven were at the Meridian. While units were selling there the other new luxury buildings were virtual ghost towns except for lonely Maytag repairman/realtors sitting in the models waiting for the buyer who never showed. I expect some sort of watershed event in 2009 with the empty new buildings. Whether financed with OPP or self-funded, these multi-million dollar projects that aren’t selling represent a lot of dead and decaying money that at some point will become too stinky to hang onto. It will likely take substantial price reductions to move the 100+ new, luxury units that are still available this last day of 2008.

At least one new complex reached the breaking point this year. At this four-building Cape Canaveral oceanfront complex, 2008 began with multiple unsold units, 39 of which were put up for auction in May. Eleven of the units sold at the auction, several under $200,000, less than half the recent asking price. Since then at least one non-developer unit has closed for below $200,000 and the developer has been served notice of foreclosure on 16 of the remaining unsold units. Values of all units here, distressed or not, are affected. The lowest MLS selling price in this complex in 2007 was $280,000. It hit $196,000 in 2008.

While the macro-economic outlook remains uncertain, mortgage rates are at obscenely low levels and sellers, for the most part, have become more realistic in their expectations. If you didn’t have the bulk of your assets parked with Bernie Madoff or invested in Citi, Lehman, General Motors or any of the other thousands of dogs this year and are still looking for your special beach place, 2009 might just be the year for you. Considering the huge amount of retracement in prices that has already taken place and the changed seller sentiment, I think that 2009 will be a bargain hunter’s delight. Many prices are now below replacement cost and sellers and lenders are very motivated to move properties. If you have the nerve, now’s the time to be cautiously looking. More than a few buyers were able to hammer out attractive deals this past year. Below is a handful of some of the more outstanding deals of 2008. There were others but these stood out.

A sampling of the best deals of 2008

Puerto del Rio 2348 sq.ft. top floor, 1 yr old $215,000
Constellation 6th floor direct ocean, 2484 sq.ft. $400,000
River Bend top floor side view, 2292 sq.ft. $265,000
Solana River 2nd floor direct river, 1918 sq.ft. $174,300
Windrush (ocean) 1st floor no view, 1517 sq.ft. $157,500
Sutton Place on the Ocean 2nd floor, 691 sq.ft. $110,000
The Sands 4th floor direct ocean, 1334 sq.ft. $265,000
Harbor Isles top floor direct river, 1308 sq.ft. $210,000
Cocoa Beach 3/2 canal home, needed work $200,000

And my pick for Deal of the Year

A 1938 sq.ft. 3/2 beautifully-remodeled home with 135′ on the open river in south Cocoa Beach (beach is right across the road here) on 5 lots (two zoned commercial on A1A) that closed in July for $670,000 Was listed for $1.9 million just 11 months earlier. That, ladies and gentlemen, is a major change in seller expectations and the smoking deal of 2008.

I hope the new year brings you happiness and reward. Whatever it brings, I will be happy to experience it in Cocoa Beach, my favorite town on Earth.

“And the tide rises, the tide falls.”
Henry Wadsworth Longfellow

 

Giddy-up

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

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

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

MLS inventory Dec 15, 2008 Cocoa Beach & Cape Canaveral

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

“You’ll shoot your eye out, kid.”
______Santa Claus to Ralphie

 

Free Falling

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

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

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

“In the middle of every difficulty lies opportunity.”
_________Albert Einstein

 

REDUCED! … meh

Looking up the channel along St. Croix from Fountain Cove.
Merritt Island in the distance and Banana Bay on left.

REDUCED! OWNER MOTIVATED! BRING OFFER! NEW CAR IN GARAGE! $50,000 DECORATING CREDIT! SELLER WILL PAY 2 YEARS OF YOUR MORTGAGE PAYMENTS!

Like Lisa Simpson, when I see any of the above or similar phrases in a real estate listing I usually yawn and say, meh. All caps and exclamation marks generally suggest insincerity, however, when I sift through the 129 price reductions on condos and townhomes in the month of August in Cocoa Beach and Cape Canaveral I’m seeing some serious price drops unlike the, mostly, baby step reductions earlier in the year. The pressure of the end of the summer season is apparently being felt and some of the reductions are significant. For example:

Villa Verde 3/3 in south Cocoa Beach from $1.35 million to $899,999
Ocean Terraces 3/2 reduced from $699,900 to $599,900
Cape Hacienda 2/2 from $315,000 to $225,000
Waters Edge 2/2 direct ocean from $259,000 to $219,000
Dolphin Beach from $240,000 to $129,900
Brisas del Mar from $185,000 to $120,000
Cape Shores from $199,900 to $119,900

I don’t consider all of these to be good buys even at the newly reduced price but the amount of the drops tells me that the shift in seller psychology is speeding up in it’s move towards acceptance and away from denial. Even with the highly picked-over inventory I suspect that the next few months will present opportunity for ready buyers. I would suggest, if you are going to be using a mortgage, that you go ahead and make contact with your lender before you start pursuing a deal. The rules for condo mortgages continue to change and you’ll have more bargaining strength if you’re already approved or paying cash. If you were pre-approved more than a couple of months ago, you need to talk to the lender again. Things have changed, yet again.

As of today, the Cocoa Beach MLS is showing 24 closed condo and townhome units in the month of August in Cocoa Beach and Cape Canaveral, well below last year’s 39 sold units with nothing closed under $500,00. The number may drift up slightly as tardy listing agents update their listings next week. Hope you have a fun Labor Day. Be safe and close your shutters when you leave.

Homer: Kids… how would you… like to go to… Blocko Land??
Lisa/Bart: Meh.
Homer: But … the TV gave me the impression that …
Bart: We said “meh”.
Lisa: M-e-h. Meh.