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.

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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

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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

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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

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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

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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

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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

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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

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How Local is it?

All real estate is local. That is certainly true in Brevard County. I get requests almost daily from buyers wanting to take advantage of the distressed market that they've heard about and hoping find a foreclosure or short sale deal in Cocoa Beach or Cape Canaveral. If one looks at the distressed market in Brevard County as a whole (the market that the media typically reports) there are plenty of distressed opportunities. Exactly one quarter, 25%, of all residential listings in our county are either short or foreclosed. If we restrict our search to Palm Bay in the southern end of our county, 35% of the residential listings are distressed. Lots of opportunity there. Now let's cross a bridge and check our possibilities on the beach. In the 30 miles of beach south of Patrick Air Force Base from North Satellite Beach to Sebastian Inlet the distressed ratio drops drastically and is standing at just 9.83% of the total this morning.

Driving north along A1A past Patrick Air Force Base we have the two beachside communities of Cocoa Beach and Cape Canaveral with the Atlantic Ocean to the east, the Banana River to the west and the government owned Kennedy Space Center to the north. The opportunity in distressed property shrinks even more here. Of the 350 total residential listings in the two cities only 8% are distressed. For a buyer looking for a single-family home in either, there are but three distressed possibilities. If that same buyer wants waterfront there are none to see. If he's willing to consider condos, he has a whopping list of 12 from which to choose.

Has our bargain hunter missed his chance? Not really. He does need to reconsider his mindset that bargains only exist with distressed properties. Prices across the board were dragged down when the formerly huge numbers of distressed sales worked their way through the system and are still attractive in many cases. Now that the big numbers of distressed listings have disappeared, there is no dynamic to push prices any lower and we are seeing successive sales creeping upwards. If you're looking to take advantage of the still-low prices, as always, get your pre-approval process handled before you begin your search, do your homework so you'll recognize a deal when it appears and forget about a distressed-only search. Swift action is crucial for those looking for a good property in this market. Conditions will likely change at some point as they always have but, right now, preparation and swift action are among a buyer's best strategies. An informed and involved local buyer's agent will give a serious buyer their absolute best chance at success. AND, this bears repeating, multiple offers are a fact in this market. Calls for best and highest offer in multiple offer situations are common and are not a creation of evil Realtors trying to manipulate single buyers. Withdrawing an offer out of paranoia only gives the property to the other buyer. Adapt and win.

When an archer is shooting for nothing . . . he has all his skill.

If he shoots for a brass buckle . . . he is already nervous.

If he shoots for a prize of gold . . . he goes blind;

or sees two targets . . . he is out of his mind!

His skill has not changed. But the prize . . . divides him. He cares.

He thinks more of winning than of shooting . . .

and the need to win drains him of power.

� Chuang Tzu, 400 B.C..

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First Right Tyranny

Many condominium associations in Florida and the Cocoa Beach area have provisions in their documents that give members of the association (unit owners) the right to take over a contract for sale of another unit. The way this happens in most cases is that an owner first negotiates a contract for the sale of his unit with an outside buyer. Then the contract is offered to the other unit owners at the same price and terms. In some condos, the contract is mailed to owners and at others a notice or a copy of the contract is just posted on a bulletin board at the complex. The method varies as does the time limit for stating intentions. In most area complexes, owners have between 10 and 21 days to state their intention to exercise their first right and take the contract. If this happens, the original buyer is out and any money spent on inspections and appraisal is gone as well. Not fair but that's how it is.

Should more than one owner want to take the contract we have to go back to the docs to see who has priority. Again, the rules vary and we have several methods for determining priority. Some associations give priority to contiguous or adjacent units with priority usually favoring horizontal over vertical (I did not plan that ironic wording). Others give priority to the closest (numerically) unit number. Most, in the case of a tie, give the seller the right to choose. Acrimony is a not uncommon byproduct.

I have always heard that first right was initially a way for owners in a small community to legally discriminate against unwanted buyers. Should some "undesirable" try to buy in their community, one of the existing owners would just use his legal right to take the contract and prevent the undesirable from buying into the community. In my experience in the Cocoa Beach area that has never been the case. What is more common is that an existing investor owner will take any contract of a desirable unit unless the contract price is well above market. In practice that means that no outsider can buy in the complex unless he is willing to take an undesirable unit or overpay for a desirable one. That situation exists in a handful of units in our area.

Let's talk about short sales in first right complexes. The process can be quite perverse.When a seller of a short sale property signs an offer, the bank/s holding the mortgage must still approve the sale. The question for a short seller in a first right complex then becomes "do I submit this signed but unapproved contract to the association for first right, or do I wait until the bank approves the sale?". If the seller submits to the association before bank approval a couple of different problems can arise. Scenario 1: An owner exercises first right but the bank counters at a higher price than the contract the seller signed. The exercising owner then walks away and seller is back at square one with the original buyer long gone. Scenario 2: No owner exercises and bank counters at a higher price. Original buyer accepts the bank's counter. Because the contract has changed the contract must be submitted for first right again. An owner chooses to exercise their right and takes the contract. The bank refuses to transfer approval to a new buyer which means the short sale negotiations must start over at the beginning with no guaranty that the same price will be approved.

If the seller decides to wait until approval by the lender to submit to the association then other problems are lurking, one almost identical to scenario 2 above. I am involved in a situation like this right now with one of my contracts. The seller signed the original $35,000 offer from my buyer client for a small 2/1 Cocoa Beach condo in early September last year. Bank finally approved the short sale at the $35,000 contract price with $2000 seller contribution in January this year. The contract was then submitted to the association for first right and an existing owner took the contract. The bank refused to transfer the approval and the short sale negotiations had to be restarted. The bank responded in April with an approved price of $51,500 and $7000 seller contribution. That's $21,500 more than the approved amount in January. If we can't get the bank to accept a lower price then this owner/buyer will walk and everyone loses.

If you are a buyer of a short sale in a first right complex, be sure to ask your agent when the first right procedure will take place and be prepared for craziness and an illogical progression of events. Now that I think about it, you probably want to know, short sale or not, whether the unit you're offering on is in a first right complex. It might prepare you for the possible disappointment. Whatever your situation, may the force be with you.

"Animal Sounds"; "Condiments"; and finally, "Your Ass or a Hole in the Ground". Mr. Reynolds, unfortunately you're in the lead, so we'll start with you. __Alex Trebek as played by Will Ferrell

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Moving Right Along

What a month April was. As of this morning the Cocoa Beach MLS is showing 67 MLS-listed condos and townhomes and seven single family homes closed in April in Cocoa Beach and Cape Canaveral. Only one of the 67 condo sales was a short sale. Eleven were foreclosures. Two of the seven single family homes were short sales and none were foreclosures. That puts the percentage of closed distressed sales in April at 19%. Only 8% (30 properties) of the remaining for sale inventory of 353 properties is distressed (short or foreclosed).

Higher priced properties have been moving with two units selling at the oceanfront Meridian for $685,000 and $725,000. Two units sold at Solana Shores for $425,000 and $455,000. Two other $400,000+ sales closed at Constellation and Harbor Club. Several other complexes had multiple sales in the month. They included the oceanfront Ambassador Shores in south Cocoa Beach, Harbor Isles, Cocoa Beach Club, Ocean Oaks, Stonewood, Spanish Main, The Constellation, Diplomat and the riverfront Treasure Island Club.

One direct ocean home sold in south Cocoa Beach for $1.24 MM. Only one of the 7 sold homes was not waterfront. Riverfront and canal homes sold in a range from $510,000 for a totally remodeled beauty in Snug Harbor to $230,000 for a handyman special on Riverview off 4th Street South.

Competition for good properties remains high. If you plan on getting a mortgage to purchase a property it will serve you well to get the pre-approval taken care of before looking at properties. Any offer contingent upon a mortgage is going to require a pre-approval letter. If you plan to pay cash, you will have to prove that you have the funds to close the deal. Either a letter from your banker stating that you have the liquid funds sufficient to close or an account statement showing sufficient funds will work. Get these items taken care of before offering so that negotiations can move quickly. Also, be prepared to offer quickly if you find a property you like as there are probably others looking for the same thing. Speed and preparation are being rewarded. Lowball offers are not. The days of buying below market value, for the most part, have passed.

"Other prohibitions from the beach ranger ordinance remain unchanged, including bans on drunken swimming, mobile DJ booths, campfires, high-volume drinking devices and leaping off the Cocoa Beach Pier." Cocoa Beach City Commission

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From the Trenches, April Halfway

After blowing the doors off in March, the property market in Cocoa Beach and Cape Canaveral continues at a blistering pace in April. As of tax day yesterday 32 condos and townhomes had closed in the two towns according to the Cocoa Beach MLS. Of those 32 not a single one was a short sale. Three were foreclosures, all under $80,000. Almost half of those sold, 14 units, sold in less than 30 days on the market. There were multiple offers on several.

The high end of the range continues to be strong with two units closing at the oceanfront Meridian for $725,000 and $685,000. A 3rd floor direct ocean unit at the Constellation in south Cocoa Beach closed for $459,900. A 4th floor direct ocean Spanish Main weekly rental 3/2 closed for $323,000. Other weekly rental units closing included two 2 bedroom units at Cocoa Beach Club for $195,000 and $200,000, a Diplomat 3rd floor direct 2/2 that sold for $198,500 and a Royal Mansion first floor 1/1 that sold for $110,000.

In other oceanfront buildings a Marko Villas top floor 3/2 and a Sea Oats 2/2, 2nd floor direct closed for $287,500 and $255,000 respectively. A ground floor Windrush direct ocean NE corner 3/2 with 1623 square feet and garage sold for $193,000. A fully furnished 3rd floor south facing Ocean Oaks 1 bedroom 1.5 bath with garage sold for $175,000. Another one bedroom unit, this one a nicely remodeled 5th floor at Ambassador Shores in south Cocoa Beach closed for $164,000. No garage. A nicely remodeled NW corner facing Beach Villas 1/1 with a nice ocean view in south Cocoa Beach closed for $92,000.

A newer Harbor Isles lakefront 3/2 with 1401 square feet and two garages sold for $152,500. A remodeled top floor corner Treasure Island Club sold for $250,000 after 17 days on market. Three bedrooms two baths, 1827 square feet and open parking.

There were also sales in Rock Pointe, The Saturn, Villages of Seaport, Bayside, Ocean Woods and Atlantique among others. The trend remains the same; fewer days on market, lower inventory, higher percentage of asking price realized and multiple offers for the good ones. As always, cash offers are better received than those with financing contingencies.

I have been and am currently involved in short sales in complexes with first right of refusal. This is a tricky situation. The exact procedure varies but owners in a first right condo complex have the right to take a contract away from an outside buyer and buy it themselves at exactly the same terms as the original contract. This first right offering usually happens as soon as a seller accepts a contract. With a short sale, the seller signs an offer not knowing whether the bank will actually accept the offer. If it is put out to the owners before sending to the bank, an owner exercising their first right might find themselves in a situation with the bank asking for more than the contract. Should that owner accept the bank's counter, in some situations that new contract would have to be put out for first right again.

An even bigger problem involves transfer of short sale approval to a new buyer. If a listing agent doesn't put the contract our for first right until short sale approval is received from the bank, the bank may refuse to allow a new buyer to substituted for the original buyer. In this situation, the first right negotiations with the lender have to start over at square one. I am involved in exactly this situation right now and it is bordering on insanity with all involved losing. I'll cough up the details in a future post after the smoke has cleared.

I've forgotten how to worry
And I don't know how to run
Against the odds I realize
This struggle could be fun!

__________The Clash

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Meet the Buyers

Who's buying in Cocoa Beach these days? The media would have you believe that foreign buyers are buying sizable amounts of property in Florida. While that may be true elsewhere in the state, it's never been true here. Our buyers are, surprise, overwhelmingly Floridians. I looked at the 25 most recently recorded sales on the property appraiser's site which today includes sales between Feb. 21, 2013 and March 20, 2013. As is usually the case, most of those 25 buyers of property in Cocoa Beach last month, six, already live in Brevard County and are buying for reasons other than primary residence. Another five, current residence location unknown, bought for primary residence. Of the remaining buyers, three live elsewhere in Florida and there were two each from Canada and Colorado. Another six were from eastern seaboard states with a last lone buyer from Michigan. Welcome to all our new neighbors.

"�Without music, life would be a mistake." ___Friedrich Nietzsche

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Reviewing March 2013

March 2013 was a blockbuster month for residential property sales in Cocoa Beach and Cape Canaveral. Monthly condo sales of 71 units in the two cities tied the highest month since 72 units sold in March 2006. In addition to the 71 condos there were 13 single family home sales. Of the 84 closed sales, 22% were distressed, either short sales or foreclosures. Of the remaining 355 properties for sale, 8.5% are distressed.

Twenty six of the condos sold were in oceanfront complexes with 17 of those in direct ocean buildings. Ten of the closed condos were in riverfront complexes. The highest priced condo sale was a 3rd floor south ocean view Sol y Mar with 3020 square feet that sold for $455,000. There were 13 condo sales for $300,000 or above and 17 for less than $100,000. Three single family homes closed above the $600,000 mark, all riverfront.

The ratio of condos closing with financing is rising with the cash/mortgage ratio for March at 4/3. Our meme of swift action and aggressive offering prices continues to be rewarded. Multiple offers have become the norm again for attractive properties. For buyers wanting a specific property, do not let the dreaded multiple offer scenario deter you. I know it's common to think the seller and their agent are playing games but that fear is just background noise in the grand scheme. Proceed with the strongest offer you're comfortable with and hope for the best. Cash, as always, is more attractive to a seller as it removes all the uncertainty of an offer contingent upon a mortgage. A contract contingent upon a mortgage can fail for several reasons including low appraisal or condo association issues. Issues that underwriters frown upon can include low reserves, not enough cash in the association's accounts to cover insurance deductibles, unacceptable ratios of investor owners and too many delinquent owners to name a few. Then there is the all-too-common occurrence of the lender just not having it all together by scheduled closing date.

All the moving parts of a mortgage conspire to delay or kill the closing. Early in the process there is required documentation from the borrower and the association, then the appraisal and underwriting. A delay of any of these will domino the delay down the line. If you're getting a mortgage it is vital to deliver requested documentation on time and prudent to ask your lender if everything is on track. It is not uncommon to close exactly on time but it is unfortunately not uncommon to have to request an extension because the loan did not receive final approval in time to hit the contract closing date. Sellers should be asking their agent to monitor the buyer's loan progress.

The first big wave of departing snowbirds has taken flight and the flock has been reported moving slowly northward through upper Florida and Georgia. Their places in the sun have been partially filled by wave two of spring breakers who will be gone next week. They will be replaced by the last and smallest wave of out-of-schoolers who will arrive to a mostly deserted town and beach. The third week in April Cocoa Beach will officially roll up the sidewalks and turn off all traffic signals. Restaurants will cut menu prices in half and golfers will be paid $10 per nine holes to keep the golf course in use. The ocean water temp will jump to eighty degrees in just a couple of days and residents will have to start raking jumbo shrimp off the sand every morning before taking the first swim of the day. We don't complain as this just a part of the drudgery of small beach town living post season.

"If you're offered a seat on a rocket ship,

you don't ask what seat. You just get on."

_____________________Eric Schmidt

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Balcony collapse Villa Verde South Cocoa Beach

4th floor NE balcony collapsed this afternoon 4/1/2013

It just folded onto the 3rd floor balcony

Early reports say no injuries

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March Madness

Easter week. It's the busiest week of the year in Cocoa Beach. We still have our snowbirds who have been here for the entire season, spring breakers, families with children on spring break, high school and college baseball teams and families and the random couple escaping the deep freeze up north for a few days. Two more weeks and it will all be very different. School will have resumed and the snowbirds will be well into their annual northward migration. No tee times will be necessary at the Cocoa Beach Country Club and rates will be halved. An outside table on the deck at Coconuts on a beautiful sunny day will be there for the taking with no wait. And waiting for more than one traffic light change anywhere in Cocoa Beach will once again be a thing of the past.

Sales so far in March have been very strong in Cocoa Beach and Cape Canaveral with 52 closed condos and townhomes and nine sold single family homes. Of the closed sales 28% were either short sales or foreclosures. This is a reflection of the contracts in the system that finally worked their way to closing and not indicative of the currently for sale inventory. Of the 370 total residential properties currently for sale on the Cocoa Beach and Cape Canaveral MLS only 8% are short or foreclosed. The few new foreclosure listings that are hitting the market are attracting multiple offers the first few days in most cases. Only three of the 12 closed foreclosures this month sold for less than asking price. A couple closed for more than 10% above asking price.

If you're still looking and hoping to steal something, you will likely be disappointed. That said, current selling prices are so far below recent years that buyers shouldn't be deterred by having missed the exact market bottom. As always, know the current value of the properties you're considering and be realistic and speedy with your offers. In a few years it is very likely that we'll look back at 2013 as having been a great opportunity.

"Spring is nature's way of saying, Let's party." __Robin Williams

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No Harm, No Foul?

I'm getting a little weary of real estate websites misleading consumers. That it appears to be intentional deception is also troubling. I get a handful of inquiries every week about listings that someone found on Trulia, Zillow, Homes.com, Realtor.com or one of the many other aggregator real estate sites.

Where do these websites get their listings and how do they make money? They get most of their listings directly from the local MLS systems which give them free access to the data. They then repackage it and display on their sites. They generate revenue by selling advertising back to the listing agents and other advertisers. They justify their rates by number of page views. This is where the suspected deception comes in. It is in their best interest to have as many listings as possible to generate the most page views possible. New listings appear on these sites almost immediately. Sold or withdrawn listings can linger for years continuing to boost total page views which justifies advertising rates. Why is this? The same technology that puts a new listing up immediately should be removing the sold listings equally fast. By design? Your guess is as good as mine but where there's fire...

I received an email yesterday from someone interested in what appeared to be a "smoking deal" listing on one of these sites. The price was too good to be true. I immediately questioned it as I knew there hadn't been a listing in that complex near that price in years. Turns out that the condo was first listed on the MLS at $149,900 in December 2010 as a short sale. It went under contract in three days and came back on the market in June 2011 at $160,000, "bank-approved" price. Presumably that buyer walked at the $160,000 counter from the bank. It closed in August 2011 for $170,000. It is still on the offending site this morning showing up as a "featured" active listing asking $149,900. Also shows as being on the site for "180+" days. True that. Apparently they also have a sense of humor. It has generated 7154 page views, presumably almost all at a time that it wasn't available for sale as it was actually "on the market" for a total of six days.

I ask myself who is being harmed here. Certainly not the agents who are advertising on the sidebars of these deceptive listings. They probably have nothing to do with the listing status nor where their ads appear. They are getting emails and phone calls from consumers who believe these listings are real so they benefit. The websites benefit because they continue to generate ad income from the happy agents who are getting inquiries that they can steer on to other listings. I guess I'm concerned for nothing. The consumer eventually gets another property, the agents, advertisers and the website owners make more money and all that is wasted is a little time on the front end explaining away the loss-leader listings.

I guess what I'm really concerned about is the negative impact to the reputation of the entire real estate industry and my own by unfortunate association. Ours is not the best reputation for well-deserved reasons. With a burden of shenanigans during the boom years including NAR's self-serving "Time to buy" ads at the precise beginning of the crash, we don't need further hints to our possible dishonesty. All I can do is complain here publicly and conduct myself as my mother would approve.

Buyers, forget all websites for property searches other than the MLS itself. There you have full access to all listings and, surprise, they are updated in real time. That listing that I profiled above showed up on the MLS for exactly six days, the time that it was really for sale. Your link for all property searches is BrevardMLS.com Contact me if you find one that interests you and I'll fill in the blanks. Happy hunting.

"You can lead a horse to a picture of pretty water but you can't make him drink. You can however, get him to drink some not-as-pretty water if the first picture made him thirsty enough." __Larry

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When Words Just Aren't Enough

I'm a fan of well-written real estate listings. I'm also a fan of poorly-written real estate listings. The latter are more fun to read. Listing agents have a limited amount of space available to best describe their listings and must make good use of the four lines of text shown in the MLS. Looking at a few listings I see one that has been on the market for 2344 days. That's more than six years. Some of the words that appear in this property narrative are; "alluring, well-appointed, luxurious, functional, welcoming, expansive, modern, elegant, spacious and state-of-the-art". Unfortunately for the seller, the agent's bucketful of superlatives has not been enough to overcome the optimistic price.

Another over four year old condo listing includes the wording, "THE BEST BUY IN COCOA BEACH". It's been at the same asking price since January 2010 with no takers. How about another condo listing whose description begins with the word "FANTASTIC". It's been at the same price since June 2009 and on the market a total of 2362 days. Reason? It's the price, silly. Another multi-year listing is described as "stunning" and "gorgeous". These powerful and pretty words are having a hard time overcoming the fact that the unit is priced $400,000 above what the identical unit next door closed for recently.

In the last four weeks 14 condo units have closed that were on the market less than one month. Some of these listings used similar superlatives but the descriptions were not the reason they sold so quickly. It was price. The real estate market in 2013 is almost completely transparent. The data are there for everyone. Determining fair market value for a property is within everyone's grasp. The days of polishing a turd with a glowing description and getting way above market value are gone. The price of turds, polished or not, is public knowledge. Sellers, if you price your property within striking distance of what the data tell you is current value, you won't need to employ overkill in your description. In this market priced-right listings are selling and are selling quickly.

The winter storm that dumped so much snow on the northeast this week has also delivered a powerful swell to Florida. As soon as the storm was off the coast of New England it began generating a swell that first arrived in Cocoa Beach yesterday and is expected to be with us through late next week. The 20 mile buoy is reading 8.5 feet with a 13.8 second period this morning. That's a big powerful ground swell and the beaches are all firing this morning with well over head high sets in south Cocoa Beach, smaller the further north. It's expected to build through tomorrow. The surf contest at Shepard Park this weekend will enjoy powerful conditions. Keep an eye on the kids if you go to the beach. Conditions are treacherous for swimmers. Surfers check your leashes and expect to see some broken boards like the one pictured above. Stay safe and enjoy the ocean's bounty.

"Half the work that is done in the world is to make things appear what they are not." __E.R. Beadle

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Thoughts about value

I spend at least part of every day looking at recently sold properties to try to determine the fair market value of other properties. It may be for someone who is thinking of selling and wants to know what they can expect to get for their property in today's market. More often it is for a buyer who is preparing to make an offer. In most cases in our market it is fairly easy to determine a fairly close idea of current market value. That doesn't mean that asking and offering prices will have any basis in reality. There is a strong contingent of unreasonable parties on both sides of the fence willingly dismissing the comps. These unreasonable parties rarely face one another across a closing table for obvious reasons.

All property sales involve at least two differing opinions about a property's value. The asking and offering prices will usually include factors other than just that person's opinion of fair market value. All sellers want to believe in the existence of an uninformed buyer who is willing to overpay. All buyers believe that there is a motivated seller somewhere who will sell his property to them below fair value. Both are sometimes right. What is far more common is that the non-distressed sale of a property will happen very close to fair market value for that property. With property sales records easily accessible online it is relatively easy for anyone with internet access to determine a fairly close idea of fair value for anything but the most unique properties. Since comps are rarely exactly like the subject property, some adjustments usually have to be made to determine a close guesstimate of fair value. That means that the exact current value can't be determined, only a close range. A sale is going to involve some modification of opinion on both sides.

Typically a reasonable seller will look at the comps, make adjustments for differences and then list their property above that number to allow for negotiating room and/or the outside chance that an uninformed buyer will overpay. A reasonable buyer will look at the same comps, make similar adjustments and then offer below their opinion of value to allow for negotiating room and the outside chance that the seller will just accept their first low offer. If reasonable negotiations ensue a number somewhere in between is usually reached and a sale happens.

An unreasonable seller will dismiss the comps and list at a much higher number. It may just be an arbitrary amount that they've decided they want or it may be a specific number that they need. With these types of sellers, a rational argument for the fair price based on comps is a waste of time. Likewise, an unreasonable buyer will also dismiss the comps and make an arbitrary low offer that will get either an angry rejection or no response. These unreasonable parties are fairly active in the market just not in the closing rooms.

If you want to sell or buy a property, run the comps and set your asking or offering price accordingly. Hoping for that uninformed other party is, in most cases, just going to prolong the process. One other note; Don't dismiss comps that aren't in line with your expected number. If you're a buyer, you can't just use the low comps and ignore the high one. Likewise, sellers. That low sale next door is relevant whether you want to believe it or not. You know I'm talking to you, Mr. Listing Agent. You embarrassed yourself when you responded to my fair offer last week with a comp in another building while ignoring the identical comp on the same floor in the same building. Not to mention not even being aware of the most recent sale in that other building that also confirmed that our offer was right on the money. If your seller is unrealistic, just admit it. I realize that some agents' business plan involves taking over-priced listings and hoping that with time the market will beat their sellers into a more reasonable state of mind. That's fine. Just don't try to justify a crazy price with cherry picked or unrelated comps.

Every seller's and buyer's agent should be running comps for their clients when the moment of setting a price comes. If your agent isn't doing this for you it may be time for his pink slip. If you want a reasonable idea of what a particular property is worth contact me. I'll tell you what the comps suggest. What you do with that knowledge is up to you. Doesn't mean you can't dream. That redneck lottery winner who hasn't hooked up the internet connection yet may be the next one to view your property and might pay you double what I just told you it was worth. Lightning does occasionally strike.

"Reality is wrong. Dreams are for real." ___Tupac Shakur

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Million Dollar Gator

A dangerous reptile similar in size to the one above ignited a chain of events that traumatized at least one non-Floridian, changed the direction of several people's lives and left a trail of close to a million dollars of failed real estate closings and lost income in his wake. It began the day before two scheduled closings this week. The first was on a waterfront home in Melbourne Beach and the second on a waterfront condo in Cocoa Beach. The sellers of the home were also the buyers of the condo. Their contract to purchase the condo was contingent upon the successful closing of their home. The buyers of the home, who were from somewhere north of the Florida state line, had completed inspections, the mortgage was approved and they were set to close the following day. They arrived to do their final walk-through. A small alligator, oblivious to the human world, had chosen that particular sunny afternoon to soak up the warmth along the lakeshore within sight of the backyard. The soon-to-be-relocating-to-Florida couple spotted the reptile and one of them, pardon the vernacular, freaked out and called the next day's closing off. That, of course, torpedoed the closing of the condo.

The aftermath: Two families who thought they'd be moving this week are back in limbo. Two properties are back on the market. One of the two families is probably having a soul-searching discussion about their relocation to a tropical state. A title company will not be paid for two title searches and preparations for two closings. A mortgage company will not collect their fees (other than those related to application) even though loan officers, processors and underwriters spent hours on the mortgage. Three real estate agents will not collect pay checks although every task related to a sale other than the signing of the closing documents had been completed. Two sellers are changing their possibly life-altering plans and probably quite a few other as-yet unknown dominoes are teetering. All because one of the estimated 1.3 million alligators in Florida chose a particular moment and place to warm his reptilian blood. Bad gator.

"I am a bundle of nerves riddled with irrational fears." __Tori Spelling

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What's Sellin Right Now?

Twenty MLS-listed condos and four single family homes have closed so far in Cocoa Beach and Cape Canaveral in February 2013 according to the Cocoa Beach MLS this morning. Three of the four homes were waterfront and three of the four sold for cash. The highest price paid was $465,000 for a two story, open Banana River 3 bedroom 2.5 bath, remodeled pool home with dock and boat lift and two car garage.

Of the twenty condos closed so far, only four sold for more than $200,000. Sales of note included;

A fully furnished 2nd floor Flores Ocean Suites direct ocean 3 BR, 3 BA with 2060 square feet and garage that closed for $473,000.

A fully furnished 4th floor, direct ocean Shorewood 2 BR, 2 BA with 1866 square feet and garage that sold for $370,000.

A partially remodeled 4th floor direct ocean B building Royale Towers 3 BR, 2 BA with 1445 square feet and garage closed for $284,000 after 32 days on market.

A north facing 3rd floor River Bend 3/2 with 2292 square feet and one car garage closed as a short sale for $215,000.

A beautiful foreclosed 3rd floor, 7 year old direct river Majestic Bay 3/2 with 2052 square feet and private 2 car garage closed for $196,000 after 6 days on market. It sold new in 2007 for $450,000.

Of the twenty closed condo sales all but four sold for cash. Almost half (9) were distressed, either foreclosed or short. This morning total condo and townhouse inventory in the two cities stands at 320 units, 30 of which are either foreclosures or short sales. There are but three distressed single family home listings of the 57 total.

A casual observation of my own and other agents' recent activity is that this is one of the busiest winter seasons in years in our local market. I use the term "winter" loosely as today is but the second day this year requiring more than shorts and a singlet to be comfortable. Competition for good properties is intense in large part because the inventory is so low and so picked over. Of the dozen or so offers I've presented this year, at least a quarter resulted in multiple offer situations. There are no rules for how multiple offers must be handled. A seller can simply choose the offer she prefers and work with that one. What usually happens when more than one offer is received is that the listing agent will go back to the buyers' agents and ask for their best and highest offer to be considered by the seller at the same time. Highest offer doesn't always win. A cash offer and/or a quick close might win over a higher offer that is contingent upon a mortgage. If you find yourself being asked for your best and highest offer consider your offer carefully. The availability or lack thereof of other acceptable properties might affect how aggressive your offer should be. You may not like it but if you want to buy a good property in a desirable market with low inventory, you should be prepared for this possibility. Prices, though moving up, are still far below levels of recent years. Many condos are still selling for less than the cost to build them.

Mid 80s predicted by weekend. Our brief "winter" appears to be over.

"Whenever you find yourself on the side of the majority, it's time to pause and reflect." ___Mark Twain

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