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.

Termite Inspections Protect the Value of Your Property!

Don't run the risk of losing value in one of your greatest assets - Your Home!

Giddy-Up Go Termite Inspection & Pest Control, Inc. will perform a termite and pest inspection on your home today. Don't run the risk of losing value in one of your greatest assets - Your Home! Giddy-Up Go Termite Inspection & Pest Control, Inc. will perform a termite and pest inspection on your home today.

Giddy-Up Go is a "customer-centric" company that prides itself on being a reliable and trustworthy agency with a proven track record of competent service delivery.

Many lenders require a termite inspection in a real estate transaction such as with the selling or buying of a home, or in the refinancing of a home. A termite inspection can protect the value of your property, giving you peace of mind about your most valuable asset.

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

Read more »»  

Happy 8th Anniversary

Beach restoration south Cocoa beach 2005

I just realized that this month marks the 8 year anniversary of this little real estate blog. In the 8 years I've been commenting on our market I've written 389 posts and angered scores of listing agents, developers and other market participants. Those same not universally loved comments have also initiated contact from hedge funds, banks, troubled developers and various members of the media. Not one of them realized the oracle was wearing flip flops until the first meeting. Hey. Whatcha gonna do? My shining moment of the last eight years, however, has to be the time I was accused straight-faced by a local lender as being the reason via this blog for the market crash. I may not have crashed the market but I will take credit for torpedoing more than one deal. All this because I write honestly about what I see happening in the Cocoa Beach real estate market. Expect more of the same, hopefully for at least another eight.

What's changed since then? When I began writing in March 2005 the market was poised for a meltdown but it wasn't apparent yet. We had never heard of short sales and there were zero foreclosures for sale in the two cities. There were 200 new condos either under construction or about to break ground just in the 3/4 mile stretch from Patrick Air Force Base to 18th Street South. It was to be a disaster for all of them except the one building that was never built, Cocoa Cabanas. They are still threatening to build, by the way. Magnolia Bay was set to break ground the following month and the announced 77 units were offered pre-construction starting at $549,900. Many of the pre-construction buyers eventually walked away from their 10% deposits but they lost less than those who went ahead and closed with an instant six figure loss. The fourth building was never built. It was a story to be repeated at all the other new buildings in the once-sleepy southern stretch of Cocoa Beach. Another boondoggle soon to be announced was the Enclave between 3rd and 4th Street South with an original plan of 24 zero lot line single family homes starting at a million dollars. Only 12 were built and several of those eventually sold for less than a half million. For the record, it was true then and as is still true today, no non-waterfront home has sold in Cocoa Beach for even close to a million dollars. For anyone to think they could sell, not one, but 24 for more than a million bucks seems incomprehensible. Those were heady, optimistic and greedy times.

At the same time in March 2005 pre-construction buyers were flipping contracts at Portside Villas for 5 to 7 times their investment. Similar, although not quite as lucrative, activity was happening at Solana on the River, Mystic Vistas, Majestic Bay and Puerto del Rio among others. The coming months were to see tens of millions in evaporated money for those unfortunate enough to be among the buyers of the flipped contracts or those who closed on those contracts rather than flip for a profit. Prices of individual units in some complexes eventually sold for a quarter of the number they were bringing in 2005, e.g., Perlas del Mar and Sea Spray Townhomes.

In early March 2005 the national average 30 year fixed rate mortgage was 5.77% and climbing and scrutiny of the borrower and the property was practically non-existent. Rates topped 6% by month's end. Inventory was still relatively low with around 400 condo units listed for sale in the Cocoa Beach and Cape Canaveral MLS and less than 45 single family homes. The condo inventory was top heavy with over 110 units asking over a half million. This  warning sign was ignored by almost all market participants. Inventory was about to blow up with total number of condos for sale almost tripling in a year's time as prices tumbled.

 Things have changed. MLS condo inventory is at 317 total units for sale this morning. Magnolia Bay and most of the other once-troubled complexes are on solid footing with most or all units sold. (There are a couple of exceptions in south Cocoa Beach.) The national average for a 30 year fixed rate mortgage  is 3.52%. Scrutiny of borrowers and the collateral property is now as invasive and thorough as a prostate exam. The Space Shuttle is no longer flying and Kelly Slater has been world champion five more times since that first blog post. The downtown sidewalks that were concrete in 2005 are now pavers and rowdy beach-goers are more likely to be accosted by a fired up old dude on a power trip in a Beach Ranger shirt than a cop. The locals on the deck at the Beach Shack have not noticed any change at all. Through it all, Cocoa Beach is still my pick as the best little beach town in Florida.


"I always wanted to be somebody, but now I realize I should have been more specific." ___Lily Tomlin

Read more »»  

Short Sale Negotiators on Acid

I promised I'd share the final chapter in the crazy short sale story I began earlier this year when it finally concluded. As crazy as it was then it got even more bizarre before blowing up in spectacular fashion this week. The story of the short sale on acid is now complete and follows. I'll start back at the beginning for those who may have missed it.

The short sale one bedroom, one bath Cocoa Beach condo was first listed on April 27, 2012 for $49,999. The seller signed a contract on May 4 but that buyer backed out three weeks later. The seller signed another offer for $35,000 from my client on July 7 and the signed offer was submitted to Wells Fargo to start the short sale approval process. Wells finally approved the short sale at the $35,000 contract price with a $2000 seller contribution and release from deficiency in January this year. The contract was then submitted to the condo association for first right of refusal and an existing owner took the contract away from my client. The bank refused to transfer the approval to the new buyer and the short sale negotiations had to be restarted. At this point I suggested to the new buyer that the approved price might not happen again and if it didn't then all the other owners would lose. She was willing to take the risk for them (without asking them, of course) and would not back away and let the first buyer close.

The title company negotiating the short sale resubmitted the new contract and the bank responded in April with a new, increased approved price of $51,500 with $7000 seller contribution. The new buyer responded by upping their $35,000 to $35,100. The bank responded with a request for the buyer's highest and best offer accompanied by three recently sold comparable properties. The buyer provided comps and upped their offer to $37,000. This was April 24.

Wells Fargo responded this week with their take it or leave it offer. They now want $63,000 from the buyer and want the seller to sign a promissory note for $131, 828 payable at $1098.57 per month for 120 months. The seller's unpaid balance at the time of the January approval was $138,903.20. Wells Fargo now wants $157,828 more than they were willing to accept then. How can the outstanding balance have increased by almost $56,000 in those five months? Is anyone surprised that these guys needed bailing out because of bad decisions?

Here's the easy to read timeline:
April 27, 2012 - condo listed as short sale for $49,999
May 4, 2012 - seller signs contract for unknown amount
May 30, 2012 - buyer cancels contract and listing returns active
July 7, 2012 - 2nd buyer submits offer of $35,000 and seller signs
July 9, 2012 - short sale package is submitted to Wells Fargo
Jan. 21, 2013 - bank approves sale for $35,000 plus $2000 from seller, no deficiency
Jan. 22, 2013 - another owners declares intent to exercise first right of refusal
Feb 5, 2013 - bank refuses to transfer approval to new buyer
Feb 8, 2013 - short sale process is started over with new buyer
April 12, 2013 - bank counters at $51,5000 plus $7000 seller contribution
April 15, 2013 - buyer counters at $35,100
April 23, 2013 - bank declines counter and asks for best plus 3 supporting comps
April 24, 2013 - buyer submits best offer of $37,000
June 10, 2013 - bank counters at $63,000 plus $131, 828 promissory note from seller
June 12, 2013 - buyer declines and file is closed - foreclosure next

Current market value of this unit is around $40,000 to $45,000. I will update on the sold amount when it is eventually foreclosed and sold. Wells Fargo stock is currently rated either buy or strong buy by 18 major analysts. I'm an idiot.

"Insane in da membrane.
Crazy insane, got no brain
Insane in da brain."  ___Cypress Hill

Read more »»  

Parsing the Trends For Summer 2013

Let's look at the dynamics of the Cocoa Beach real estate market as we begin the summer of 2013. I'm not seeing any significant shifts away from the trends that were already in place. The most powerful force in our market is the continued decline in the number of distressed sales. Of the 61 condo sales recorded in May 2013 only 16% were distressed. We began the year with 44% of all MLS closed condo sales in January 2013 either short or foreclosed. That percentage has dropped every month since. As these distressed sales have disappeared the downward pressure on prices has disappeared with them and we are seeing rising prices again in almost all complexes and neighborhoods. The sellers who were waiting for market recovery to list their property are finally getting their day although probably not as fast as they hoped. Prices aren't rising nearly fast enough. Our depleted inventory still has a large number of listings at optimistic asking prices by these hopeful sellers. That means that, after discarding the over-priced listings, buyers have very few priced-right attractive properties to consider. That dynamic has the fairly-priced, good ones moving quickly. Price a decent condition Cocoa Beach property near the fair market value and it will sell immediately.

One third of the condo sales in May were on the market for less than 32 days and half of the single family homes sold in less than 35 days. Had the other sellers been more realistic with their first asking price that number would be higher. 59% of  condo sellers had to reduce their asking prices before finding a buyer.

The number of purchases with mortgages is rising. As recently as 2010 two thirds of all condo purchases were for cash. In May we were right at 50/50 cash to mortgage for condos and about 2/3 of all single family sales were financed.

As we move through the summer months I expect these trends to continue. For sellers it means that you can reasonably expect to get more than you would have last year but not a great deal. For buyers, expect competition from other buyers for good properties and expect to pay slightly more than you would have six months ago. Thinking of throwing out a lowball on a good property hoping for a steal? Try some other market. It's not going to happen here. Get pre-approved with your local lender so you can include a pre-approval letter with your offer or have proof of funds if you offer cash. As always, good luck in your search. Questions? Email me at larry@walkerbagwell.com or call me at 321.917.5786 I'm happy to help.

Here's the tl;dr version for those with limited attention spans.

Cocoa Beach & Cape Canaveral Real Estate Trends Summer 2013

• very low inventory
• slowly, steadily rising prices
• shrinking number of distressed sales
• competittion among buyers for good properties
• quick sales of good, priced-right properties
• mortgages becoming more prevalent
• successful lowball offers = DOA

"Money doesn't solve all your problems but it solves your money problems."  __James Altucher

Read more »»  

Condo Commandos

Is your condo board of directors acting within the law? Or are they making it up as they go and potentially exposing themselves and the association to lawsuits? I can say with certainty that there is more than one board of cowboy directors in Cocoa Beach that fits in the latter category. It's not uncommon to find condo associations enforcing rules that are in contradiction to the condo docs or enforcing legitimate rules unequally. I've had a condo director tell me that he knew the pet rule he was enforcing was different than the policy spelled out in the docs but that he was doing it for the good of the owners. This same board is also rigidly enforcing occupancy limits that are in contradiction to the docs. No one has challenged so it goes on.

Can't the Board just add a rule changing the pet restrictions in the docs? How about a new rule limiting the number of units one person or entity can own? We must go to the original docs to answer that. "The authority for the board to enact a given rule or regulation must be either expressly authorized in the governing documents or Declaration of Condominium or be reasonably inferred therefrom."

If your board has adopted a new rule prohibiting pets in contradiction to the docs you are under no obligation to find a new home for Spot. The law is specific about a board's authority and the process for limiting uses and rights. Merely adding a new rule to the old rules and backdating the document does not make that rule enforceable and it might expose the directors to liability. Targeting a specific owner through such methods is doubly dangerous. Cowboy directors, if you're reading this, you are encouraged to shape up and follow the rules. If you're in an association with a renegade board, you may want to point them to this post and to this one by Jean Winters, Esq.

"If honesty is the best policy, then is dishonesty the 

second best policy?"  _____Grant Williams

Read more »»  

What's Selling in Cocoa Beach?

Tasty pompano from the surf in south Cocoa beach

Almost a month into sea turtle nesting season and but a few days from the beginning of the 2013 hurricane season and real estate sales appear to be slowing somewhat. The Cocoa Beach and Cape Canaveral MLS condo inventory first broke below 300 units exactly one year ago and is still hovering in the same range. The makeup of that plus or minus 300 units has changed somewhat with average prices shifting upwards as the sub-$100,000 supply has been chipped away. Of the 34 units already closed this month, only five closed for less than $100,000. Compare that to the 24 units under $100,000 that closed in May 2012. There was only one sale for more than $375,000 in May 2012. We've had four closed sales so far this month above that number with three of them at or above $500,000.

The priciest condo sale so far this month was a 4th floor SE corner unit at 3800 Ocean Beach Blvd. that closed for $520,000. This unit has 3 bedrooms, 3.5 baths and 2392 square feet. Weekly rentals are allowed in this small 6 year old complex with rents in the $2000 per week range.

Another of the $500K+ sales was one of the pie-shaped, direct river 4/4 Magnolia Bay units. This 3rd floor 3024 square foot unit with a 2 car garage sold for $510,000.

An upgraded 7 year old, 4th floor direct ocean Michelina 3/3 with 2008 square feet and one car garage sold for $500,000.

In the sub-$100 per square foot club a 6 year old, non-waterfront four story townhome with 4454 square feet  in south Cocoa Beach closed for $425,000. It has ocean and river views being in the magic narrow strip of land that is south Cocoa Beach.

One of the big 2434 square foot 3/2 Puerto del Rio units closed for $372,000. It was direct river on the 4th floor.

An east facing Mystic Vistas 4th floor 3/2 with 1686 square feet in the A building sold fully furnished for $370,000. A foreclosed 4th floor 3/2 NE corner  in the D building with an ocean view and 1994 square feet closed for $262,500.

A 3rd floor direct ocean SE corner Beach Winds Cocoa Beach with 1618 square feet sold for $367,500. It had some remodeling and a 2 car garage. In the same building a 7th floor north ocean view 3/2 with 1464 square feet and a one car garage sold fully furnished for $230,500.

A nicely updated direct ocean Driftwood 5th floor SE corner 2/2 with 1118 square feet and some furnishings sold for $268,000. No garage.

A mainly original condition 5th floor north ocean view Mark 3/2 with 1506 square feet closed for $280,000. No garage but does have a carport.

A nicely remodeled ground floor direct ocean NE corner 2/2 Windjammer of Cape Canaveral with 1196 square feet and a one car garage sold for $226,900.

A fully furnished south facing 2nd floor, 2 story Cocoa Beach Club with two bedrooms and 2.5 baths and 1176 square feet sold for $225,000. It has a peek of the ocean over the pool and a carport. Weekly rentals allowed in this complex.

A very nicely remodeled ground floor east corner C building Royale Towers 2/2 closed for $205,000. 1256 square feet and a one car garage.

A direct ocean 2nd floor, 2 story North Triton Arms 2 bedroom 1.5 bath in downtown Cocoa Beach sold for $184,000. It has 1088 square feet and a carport.

Another of the bank-owned Pier Resort units closed for $169,000. It was 2nd floor with 3 bedrooms and 3 baths. There are no more of these units available with the last three under contract yet to close.

A foreclosed 2nd floor direct Banana River Harbor Isles 2/2 with 1308 square feet and a one car garage closed for $167,000. A slightly smaller 1st floor lakefront 2/2 in the same complex sold for $135,500.Next door at River Lakes a direct river 2nd floor 2/2 with remodeled kitchen, 1244 square feet and a one car garage closed for $155,000.

A fully furnished 5th floor south ocean view 1 bedroom, 2 bath Cape Winds sold for $138,000. No garage but weekly rentals allowed.

A nicely remodeled north ocean view 4th floor Twin Towers sold fully furnished for $110,000.

Other sales included three at Costa del Sol at prices between $148,500 for a 2nd floor direct river 2/2 and $86,000 for a ground floor non-waterfront 2/2.

There were two closed short sales at Oak Park on Tin Roof in Cape Canaveral for $150,000 and $160,000. That's half the new price of these units in 2006.

During this same time a remarkable ten single family homes have closed. It's remarkable because there are only 57 left for sale in our two cities. Half of the ten were canalfront in Cocoa Beach at prices between $277,000 and $481,765.

There are 301 MLS-listed condos and townhomes for sale in the two cities this morning. Of those, 26 are either short or foreclosed. Only three of the 57 single family homes are distressed, two short sales in Cocoa Beach and a lone foreclosure in Cape Canaveral.

Turtle nesting has been active in south Cocoa Beach and several dolphin in the 50+ pound range have been landed offshore. Weather has been beautiful and we watched a magnificent rocket launch earlier this week. Overall, a good month so far in Cocoa Beach. If you haven't found your place yet and want to experience what Cocoa Beach has to offer I still have some open weeks in beach rental units this summer starting at $785 total for 7 nights.

Have a safe holiday weekend and thanks to all who have served our country.

"If you're gonna do me wrong, do it right."  ___Vern Gosdin

Read more »»  

Big MLS Shakeup Coming

As of right now, most property listings on the MLS anywhere in Brevard County are visible to any agent or consumer who logs onto BrevardMLS.com to search. It has been this way for as long as the MLS has been available online. When I checked another source this morning, I found that there are three oceanfront condo listings in Cocoa Beach and Cape Canaveral that do not appear on the local MLS but do appear on a distant MLS. How did that happen? Are the property owners aware that Cocoa Beach and Cape Canaveral agents who sell the vast majority of listings here aren't able to see or even know about their property for sale? These three are listed by out-of-town brokers in the Orlando area and posted on their MLS system but not our local MLS. Not good for the sellers. This glitch looks to become more common this summer.

Brevard County has, for some reason, two Realtor associations. We've always used the same MLS system and shared our listings with one another so that an agent member of the Melbourne association could easily see and show listings in Cocoa Beach just like a Cocoa Beach agent could see and show listings in the southern part of our county.

Unless some solution is reached in the next couple of months more Cocoa Beach and Cape Canaveral listings will disappear from BrevardMLS.com. It has always made sense to list with a local broker when trying to sell a property wherever that property is. Should our MLS become divided with some listings only showing up on a distant MLS, it will become crucial for sellers in Brevard County to ask their listing agent whether their listing will be on the local MLS. Exposure on another MLS can't hurt but, if that exposure means exclusion from BrevardMLS.com, for sellers anywhere in Brevard County and especially Cocoa Beach and Cape Canaveral, the impact could be costly. I'm hoping for an eleventh hour solution but it appears right now that the split is unavoidable. I will continue to post sales and listing stats for Cocoa Beach and Cape Canaveral should it become a reality. For me it just means more work. For property sellers, loss of local exposure could prove costly.

"When times are tough and people are frustrated and angry and hurting and uncertain, the politics of constant conflict may be good, but what is good politics does not necessarily work in the real world. What works in the real world is cooperation."  _________Bill Clinton

Read more »»