Daytona Beach News Journal Quotes Me on Condo Sales

On Wednesday, I was quoted in a News Journal article on the current Daytona Beach Homes market. Bob Koslow wrote the article about the decline in sales in July. I reported on July Daytona Beach home sales on August 6th. See – Daytona Beach Real Estate Sales Drop 30.6% in July 2010. Just to update you quickly on sales, it looks like August sales will surpass July’s sales easily.

Here’s the quote from the article:

“They are mostly second-home buyers and retirees renting them out who are taking advantage of the low prices,” said Lynn Byrne, a condo specialist with CenterPointe Realty. “They are mostly cash deals with buyers using retirement funds or big bonuses to invest in real estate.”

I’ve reported before that over 80% of my buyers are cash buyers. This is a bit higher than homes sold by all agents. In July, 58.2% of all homes and condos purchased through the Daytona Beach MLS were cash deals. I don’t think this surprises anyone. Mortgage loans are still difficult to obtain without good credit or a significant down payment. However, FHA and VA loans are available and are available for those with good credit score with less down.

Condos sales are up because of prices driven down by short sales and foreclosures, and their attractiveness as rental investments. As an investment, building maintenance is taken care by the association from monthly fees. A condo owner who rents out the condo will only need to maintain the inside of the unit and the A/C in most cases.

Another great thing about condo ownership for retirement and second homes is the idea of “Lock and Leave.” When a condo owner takes a trip, they don’t need to worry about whole lot. Turn the water off and go. It’s great for those who love to travel.

Click the link to find out a lot more about Daytona Beach condos for sale.

You can read the News Journal Article here.

New Rules for FHA Condo Loans

The FHA has published some new rules for condo loans. These rules are more stringent and are designed to protect the agency from defaults and fraud.

The New Rules

1. 30% of the units must have already been sold
2. A big problem for Florida loans – no more than 15% of the units can be more than 30 days past due on the monthly condo association dues
3. A minimum of 50% of the condo units must be owner-occupied – this pretty much leaves condotels and condo conversion out
4. Residential square footage in the project must more than 75%. This means condos with lots of commercial space may not qualify
5. No single individual owner or investor can hold title to greater than 10% of the units in the project
6. The FHA will not insure more than 50% of the units in the project

You will have trouble with FHA condo loans if the developer is leasing units that haven’t sold. This falls under the 10% title holder rule from above. The developer is now considered to hold title as an investor since they are leasing the units.

Why Would You Want an FHA Loan for Condos

FHA loans are attractive for several reasons:

1. Low down payments – as low at 3.5%
2. Looser qualifying requirements – you don’t need perfect credit
3. Seller’s contributions – sellers can contribute to closing cost
4. Banks low them – they are guaranteed by the the US government

Daytona Beach Condos and the New Rules

I don’t think many Daytona Beach condos are going to qualify under the new rules. The problems with rule number 2 above, no more than 15% of the units can be more than 30 days past due on the monthly condo association dues is going to be a problem with many of the local condos. There are too many distressed units in those buildings. However, we can always check it out.

FHA loans are great for a home you plan to occupy and if you are interested in Daytona Beach homes and will be financing. you may want to check out FHA loans.

Daytona Beach Condos – What’s Selling and Where?

What’s selling now in Daytona Beach? Four months into the new year, condos sales are up 19.5% over last year both for Daytona Beach area homes and condos. Interested in what’s selling? Here’s the data.

Daytona Beach Condos sold through April 2009

Daytona Beach and Daytona Beach Shores condo sales dominate the local market. As you will see in the table below, these two communites make up 59.6% of condos sales recorded in the Daytona Beach MLS.

In makes sense that most condos sales happen in Daytona Beach and Daytona Beach Shores. Simply, that’s where most of the condo building are located. Most of the lower priced condos are located in Daytona Beach, Port Orange and South Daytona.

Don’t think that all these low priced condos are cheap. Many are very nice, but they’re not on the beach or beachside. That’s why prices in Daytona Beach Shores and Ponce Inlet are higher, they are beachside communities with many direct waterfront condominiums.

It’s really hard to determine how many of thse properties are foreclosure or distressed properties because it was only recently that foreclosure, short sale and distressed properties were coded in the MLS. We suspect the number is over 50%. To get more information on foreclosures, go to Daytona Beach Foreclosures or Daytona Beach REO (real estate owned or bank owned properties).

Low Prices Rule

59.6% of all condos sold, sold for under $200,000. Low prices are dominating sales. The market for larger condos and homes is small. You can see from the chart below that if you are selling under $200,000 you’ll have plenty of interest – if you are competitively priced.

Sellers – Don’t Play Games

Something jumped out while analyszing condo sales – the spread between buy and sell price were not big. This tells me that the biggest driver for selling you condo is to price it to sell in the current market. If you need help determining that what that means, give me a call and I can help you figure it out. Just dial 386-566-7503 or 888-519-9579.

If you need to sell, don’t play games. Price it to sell. There are too many condos on the market and people are looking in price ranges. If you are too high, you might see a few lookers, but you won’t see buyers.

Buyers, we have some great strategies for you. Call me to find out more.