Daytona Real Estate Sales Up in May 2010

A 1.6% increase may not seem like much. That’s what we saw in May over April sales. That’s not the news. The news is that we are up 23.5% year over year when we compare May of this year against last year. Local Daytona Beach home sales gains over 2009 are holding.

For the first five month of 2010 sales are up 30.4% over 2009. We’ve sold 428 more homes and condos than during the same period last year. That’s the important trend. Even if sales were to stay steady, or even decline slightly, on a month to month basis, the market has regained a lot of its strength lost during 2007 and 2008.

The composition of sales however has changed radically. Most home sales are still occurring in the under $200,000 price range. Take a look at the chart below and you will see how sales under $200,000 dominate the market.

80.5% of sales in May were under $200,000. Add the 11% of sales between $200,000 and $300,000 and the total rises to 91.5%. Only 36 of the 426 homes and condos sold were sold for over $300,000. This is a trend that we have seen for over two years and is still increasing slightly. In April, 90.4% of sales were under $300,000.

What Do May Numbers Mean?

First, with sales under $200,000 dominating the market at 90.5% of all sales, homes and condos in this price range are going to sell faster for sellers. For buyers, homes in the this price range that are priced right, will have more competition with other buyers. It’s not unusual for an aggressively priced bank-owned foreclosure property under $200,000 to have multiple offers and a bit of a bidding war.

Second, more expensive homes and condos have significantly lower sales and less competition. Homes and condos over $300,000 must jump out as a significant value. The listing price must be backed up by value. An attractive, properly priced listing in any price range must have its value showcased and made clear to prospective buyers.

Three Factors to Watch

We see three factors to watch closely this year to time your home purchase:

• Home Prices
• Mortgage Rates
• Inflation

It’s rising prices you need to be watching. No, we are not seeing rising prices yet, but it will happen. Some markets are recovering in price, but not sales. We have recovered in sales, but not price. When prices of Ormond Beach homes for sale and other area homes start to rise, we expect a mini-boom if people panic about getting what they see as a once in a lifetime bargain.

Mortgage rates and inflation are tied together. Watch both because if you are financing, it can cost you a lot. A big jump in inflation rates will boost mortgage rates. Here’s what happens:

Monthly Payment for a $200,000 mortgage at 5.14% = $1,090.82

Monthly Payment for a $200,000 mortgage at 5.44% = $1,128.06

Monthly Payment for a $200,000 mortgage at 6.00% = $1,199.10

Monthly Payment for a $200,000 mortgage at 6.5% = $1,264.14

Rates going from 5.14% to 6.5% is not unrealistic. Remember 1980s Interest Rates.

Is Now the Right Time to Buy?

We think it’s a good time to buy, but don’t take our word. Look at the 426 people who bought homes and condos in May. 1835 votes were cast by buyers so far this year, 30.4% more than last year and 57.1% more than in 2008. The people who vote with their money are the people we watch.

We are concerned about inflation. We believe there will be higher inflation to pay for record government spending and borrowing. It’s a matter of when, not if. If you are financing and qualify now, consider the value of having a 5% mortgage rate if rates go to 7, 8 or 9%.

Please give me a call at 386-566-7503 to discuss the market and your options.

Sales of Daytona Beach Homes and Condos Up 35%

Daytona Beach homes and condos continued their sales increase in April moving 35% higher than last April and increasing 6.9% over last month. April’s 420 properties sold is the highest level since the market dropped in 2006. For the year, sales are up 32.7% over the first four months of 2009.

Looking at the chart below, the sales trend we’ve seen over the past few year continues with 78.6% of all sales in the under $200,000 price range. Sales under $300,000 encompassed 91.7% of all sales in April.

Sales in March were 393 homes and condos. Last April’s sales were recorded at 311 properties. To add a little perspective, sales in April 2007 were 270 properties and April 2008 recorded 277 sales.

What’s Next

There’s no doubt that sales have increased over the past 16 months. There was concern that when the Federal Reserve stopped buying Mortgage Backed Securities at the end of March that sales would be impacted. That didn’t happen. Mortgage rates are up only a bit from where they were before the Feds action. So, we didn’t see a major impact.

Next, the First Time Home Buyers Tax Credit expired for new contracts on April 30th. Service members and some other overseas government workers have another year to take advantage of the credit. We believe the impact of the expiration will be minimal on sales. In the Daytona, Ormond Beach, Port Orange area, we see people taking advantage of the tremendous values available. We believe more people will take advantage over the coming months.

That being said, we will look to May to give us another indicator. May sales were higher than April sales over the past three years. If that happens again this year, or sales levels are close, we can say that the expiration of the tax credit had little to no effect.

Note: Sales reported in this post are from the Daytona Beach MLS which covers Daytona Beach, Ormond Beach, Port Orange, Ponce Inlet and surrounding communities. You can search the local MLS by going to our Daytona Beach Real Estate Search Page.

Daytona Beach Sales Up Big in March 2010

Sales of homes and condos in Daytona Beach continue their steep climb over both March last year and last month. 393 homes and condos were sold last month against 282 sold last March – an increase of 34.9%. Sales were up 23.6% over last month when 318 homes were sold. The number reported are from the Daytona Beach MLS.

Take a look at the chart and we can see that sales by price range remains consistent with the past two years.

Sales under $200,000 were 75.1% in March, down from 80.5% in February, but consistent with the ranges we have seen recently. This is where the market is strongest. Many of the foreclosed and short sale homes are in this price range and this is where buyers are most active. Sales in the $200,000 to $300,000 price range were stronger this month at 13.2%, up over last month when we saw 11.6%.

We are looking for an increase in the higher price range to show a market shift. That just has not been there in the past two years. When homes sold at over $300,000 begin to increase in numbers and as a percentage of sales that will indicate stabilization in those price ranges. Until then, inventory will remain high.

We have four listings over $499,000 and we’ve sold properties in the higher price ranges, but most of our sales and total market sales are in the lower price ranges.

If you have questions about the market, please give me a call at 386-566-7503. We can talk about specific properties or discuss the market in general.

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Positive Sales Trend Continues for Daytona Beach Real Estate

February 2010 Daytona Beach real estate sales continued a positive trend with a 27.7% increase over February a year ago, and a 14.4% increase over January sales. The numbers reported from the Daytona Beach MLS show the continued improvement we’ve seen over the past 14 months.

Looking at the chart below, we can see that sales under $200,000 continue to dominate the market.

Daytona Beach Real Estate Sales February 2010

This is the highest percentage sales that we’ve seen in that price range since we’ve started tracking over three years ago. When sales under $300,000 are considered, 92.1% of all sales come from the lower end of the market. A total of only 28 homes and condos were sold over $300,000.

The reason for sales dominance in the lower price ranges is that many people are finding what they are looking for. Distressed properties in the form of short sales and foreclosures are keeping prices down. There is also the factor that many of these properties need work. I have seen kitchen cabinets, plumbing fixtures and even wood flooring removed from distressed properties. That further lowers the value and the price of these properties.

Median sales of Daytona Beach homes and condos came in at $110,000 in February. The median is the middle point of the distribution of sales – one-half above and one-half below. This low value is no surprise when 44% of sales came in at under $100,000, and 79.5% were under $200,000. As long as this high a percentage of sales is in the lower price ranges, median values will stay low.

Quick Review of January 2010 Daytona Beach Real Estate Sales

The final numbers are in, and in January, Daytona Beach home sales were up against last January and down against last month. This is a mixed bag of up and down, but in-line with historical data. January and the first quarter have been the weakest month and quarter over the past two years. The summer and fall are the strongest months over the same period.

December was the highest sales months in over three years, so we need to keep that in mind when we compare January against those numbers. We’ve put together two charts to show the differences.

January 2010 vs. January 2009 Daytona Beach Home Sales

Daytona Beach Home Sales January 2010 vs. January 2009

Year over year, we saw a big 37.7% overall sales increase last month. The chart is broken down by the categories from the Daytona MLS. Single family houses dominate total sales with a total of 75% of all sales. Daytona Beach condo sales are the next strongest category with 22.2% of all sales. This is a good sign that January is stronger than last year, but when compared against last month the news doesn’t appear as good.

January 2010 vs. December 2009 Daytona Beach Home Sales

January 2010 vs. December 2009 Daytona Beach Home Sales

December was a big big month. With 417 properties sold, it was the highest sales month since the bubble burst. January show a 30% drop from December. We are not taking this lightly. Although we can look at historic numbers for an explanation, we’ve learned in this market not to attempt to predict anything too boldly. January has been the lowest sales month for the past two years, but last year the drop was only 4.9%. However, in 2008, the drop was 28.7%.

So there is some historical support for a drop of this size, but we need to keep in mind the pressures against home sales from the economy and distressed properties.

Where Do We Go From Here?

I boldy stated last month that I thought that with last year’s sales of close to 4,000 units, we were about where we would be without the bubble burst. I believe we are within 10% of that number. The January sales are in line with that view. Last year, the average monthly sales were 333. With January, the weakest month of the year, coming in at 292 properties sold, we are in line with meeting a average of 333 properties. Of course, there are no guarantees and we will need to watch as the year progresses. Make sure to visit here for regular updates.

Sales of Daytona Beach Homes – Down Against Last Month – Up Over January Last Year

Daytona Beach homes and condos sold at a 33.2% slower pace than last month, but were up 29.9% over last January. What’s next? These numbers are preliminary, but will not change significantly over the next few days.  The fall in sales is not unexpected. Here’s why:

• January sales have been the lowest sales months for both 2008 and 2009
• The 1st quarter has been the lowest sales quarter historically in the area
• December sales of 416 properties through the Daytona Beach MLS were the highest in over three years

Our inquires and website traffic were down during the fourth quarter, even though our sales were strong. In January, our website traffic was up 61.1% over December, back to the numbers we see during the summer high selling season. We are showing a lot of properties and my listings are being shown.

Seeing this level of website traffic and inquiries shows a lot of interest in the Daytona Beach real estate market. Our web traffic is about 50% higher than it was for last January. We believe sales will improve in February and are looking for a strong first quarter. Beyond that, we need to see what happens with the economy and whether the home buyers tax credit is extended.

Here’s a quick breakdown of January sales by price range.

Daytona Beach Homes Sales by Price January 2010

The distribution of sales by price is consistent with what we have seen over the past two years. Homes and condos sold under $200,000 made up 75.5% of January sales and under $300,000 made up 88.1%. The under $200,000 market is consistently strong and over $300,000 sales have been weak. This will change, but not until there is more certainty of price stability.

We will publish a full breakdown of home and condos sales for January later this week; after all the numbers are in the system.

2009 Daytona Beach Home and Condo Sales Report by Price Range

88.7% of sales of Daytona Beach Homes and Condos in 2009 were in the under $300,000 price range. See the graph below for the full visual impact.

Overall Daytona Beach real estate sales were up 38.1% in 2009 over 2008. Condos accounted for a good portion of the market growth, rising 69.6%. Let’s look at the graph below to see the distribution of sales by price.

2009 Daytona Beach Real Estate Sales by Price

The Lower Price Market Dominates Daytona Beach Real Estate Sales

First, we see that most of the sales are under the $200,000 price point – 74%. This is much the same that we saw in 2008, but with the increase in sales, more properties were sold in this price range. When we look at all properties sold  under $300,00o, the percentage rises to 88.7%.

At the other end of the scale, only 13 homes and condos were sold for more than $1,000,000 through the Daytona Beach MLS. Home and condos in the price range from $300,000 to $1,000,000 accounted for 11% of all sales.

There is no doubt that the sales engine for Daytona Beach area real estate sales is in the lower priced market. This is where the buyers are and if you are marketing a property in this price range and the property is priced at market, you have a much higher probability of success than in the higher price ranges.

We don’t see any major shifts in sales distribution for 2010. Lower priced homes will continue to dominate the market.

Here’s the breakdown by price and percentage.

2009 Daytona Beach Real Estate Sales by Price Chart

What’s Market Price?

Let’s face it, market price in Daytona Beach is being driven to a very high degree by short sales and foreclosures. Any home or condo, in any price range, is competing against similar distressed properties. Of my inquiries from buyers, most are either for individual homes or condos that are distressed or for lists of distressed properties.

This is the reality of the market and unless something changes dramatically, more distressed properties will be coming on the market at close to the current rate through 2011-2012. The most recent forecasts predict around 3,000,000 foreclosures this year. Balloon and ARMs (adjustable rate mortgages) will be coming due through next year in high numbers. See More Foreclosures on the Way for Daytona Beach Real Estate for more information.

For buyers, the current market is about patience and getting the best possible deal whether or not the property is distressed. For sellers, you are competing against distressed short sale and REO (real estate owned) foreclosure properties and need to weigh those facts when considering whether to market a property that is not distressed. Of course, pricing to sell means considering competing properties.

I am a certified short sale specialist who has sold many distressed properties. I am in this market everyday, full-time, working with banks for both sellers and buyers. Call me at 386-566-7503 either way to discuss your options.