Cocoa Beach, Florida, is a coastal city located in Brevard County, known for its beautiful beaches, surf culture, and rich history. The city’s motto is “Where the sand is our sky,” and it certainly lives up to this reputation. Situated on a barrier island between the Atlantic Ocean and the Banana River, Cocoa Beach is a popular destination for tourists and locals alike. Cocoa Beach has something for everyone, whether you’re a surfer, a beachcomber, or just looking for a relaxing vacation spot. While it’s a popular vacation spot, it’s also a great place to call home. Living in Cocoa Beach offers a unique lifestyle, with a strong sense of community and a range of activities to keep you busy.
Cocoa Beach’s real estate market has experienced noticeable growth over the past five years. Like much of Florida, the island has benefited from economic and population growth, contributing to its rising prices. However, with a shift in the economic environment and a rise in interest rates, it’s no surprise that Cocoa Beach’s housing market is starting to feel the impact.
Cocoa Beach Housing Market Trends
Throughout 2020 and 2021, the Cocoa Beach housing market experienced a surge in demand, driven by several factors, including low interest rates, a shortage of available housing inventory, and the desire for many Americans to relocate to warmer climates. As a result, the market favored sellers, with homes selling quickly and often for above asking price. While today the market has begun to cool, it remains comparatively resilient. Zillow’s data shows that the median home price in Cocoa Beach is $486,499, up 13% from last year.
Cocoa Beach Lifestyle
One of the best things about living in Cocoa Beach is the sense of community. The city has a small-town feel, with friendly people who are proud of their city’s history and culture.
Residents also enjoy access to some of the best beaches in the world. The city has several public beach access points, including Shepard Park, Lori Wilson Park, and Sidney Fischer Park. The city has a strong surfing culture, with several world-famous surf breaks located just off the coast. There are also plenty of opportunities for fishing, boating, and other water sports.
Cocoa Beach: A holiday destination
Cocoa Beach is a popular destination for families and couples looking for a fun-filled getaway. The demand for short-term rentals in Cocoa Beach has increased in recent years, which has led to the development of many rental properties catering to tourists’ needs. Whether it’s a cozy beachfront condo or a luxurious vacation home with a private pool, there are plenty of options for every budget and preference.
What’s affecting the Cocoa Beach real estate market?
Interest rates are a crucial factor that affects the affordability of housing. When interest rates rise, the cost of borrowing increases, making it more expensive for homebuyers to finance their purchases. So, how does that impact the Cocoa Beach real estate market? Well, buyer demand is down as more and more potential buyers are getting priced out of the market.
Another major market inhibitor is that the demand for holiday homes has declined significantly. High interest rates mean buyers have far less incentive to purchase a second home. Because Cocoa Beach has a large holiday home market, this has resulted in a considerable decline in demand. The decline in demand for vacation homes and short term rental investment properties is a trend being seen across much of the country’s vacation destinations.
Inventory is up.
A decline in buyer demand is being met by more dramatically more inventory than in 2022. According to Rocket Home’s data, there are 218 homes available for sale in Cocoa Beach, up 13.8% from last month. But what’s more notable is that the average number of days a house remains on the market has risen from 39 in January 2022 to 83 in January 2023.
Real estate buyers in Cocoa Beach are happy to sit back and wait for the right property. They no longer feel the pressure of rising home prices that previously pushed them into making fast offers.
Because buyer demand is down and there’s more competition in the market, sellers need to set reasonable expectations when listing their property. Not only should they aim to price competitively, but they need to be understanding of how long it might take to receive an offer. The best advice for Cocoa Beach sellers is to aim to make your property competitively attractive both in terms of presentation and pricing. While we don’t want to sell for too little, it is also damaging to overprice a property only for it to sit on the market.
Florida weather concerns and insurance rates
While Cocoa Beach fared well during Hurricane Ian, the storm was a reminder that coastal property comes with risks. The storm caused significant damage to some areas of Brevard County. As a result, insurance rates throughout Florida substantially increased, shocking both property owners and buyers. Further increases in home insurance costs are expected to be as high as 40-50% later this year.
Sellers with homes with a roof life expectancy of less than five years will find that potential buyers are persistent in their negotiations. This is because it’s now exceptionally difficult to insure these homes. These sellers should get a roof quote or even consider replacing their roof before listing the property on the market.
What’s to come in the Cocoa Beach market?
The last two years were an impressively strong seller’s market, so it’s no surprise it’s starting to cool off. That price appreciation and sales rate were unsustainable. In the coming months, expect housing inventory levels to continue increasing. Therefore, competition between sellers will also increase. Sellers should price competitively and be prepared to negotiate regarding finance and inspection contingencies.
Does this mean that the market is tanking? Nope, but we are experiencing what can be called a healthy correction. On the other hand, buyers can take a breath and a little more time finding the right property.
The Cocoa Beach real estate market has shifted from a seller’s to a buyer’s market due to higher interest rates, higher inventory levels, and decreased buyer demand. However, buyers who think they will score properties at the same price as in 2020 will be left scouring the market. Prices will likely drop between 5-10% while the market normalizes, but like the rest of Florida, the Cocoa Beach real estate market will remain resilient.