Daytona Beach Real Estate Sales Up 6.2%

Sales of Daytona Beach condos and homes were up in April by 6.2% over April of last year. For the year, sales are up 4.2% over 2010 and 38.1% over 2009. Here’s a look at the first four months of the last three years.

As you can see, sales for 2011 are pretty close to 2010. The big increase came from 2009 to 2010. The best we can say about this year is that the sales volume is holding pretty consistently since that big increase.

April 2011 Daytona Beach Real Estate Sales

April 2011 sales of Daytona Beach area homes and condos are showing the same trends that we’ve been seeing for over 3 years now. Look at the chart below:

The percentage of all sales under $200,000 came in at 78.7%. This is consistent with the sales distribution since prices began falling in 2006. Add sales between $200,000 and  $300,000 to count and over 90% (90.4%) of all sales of homes and condos were under $300,000. The median price, which is the mid-point distribution of sale (1/2 above and 1/2 below), was $115,000, but the average sales price was $158,000. Both the median and the average sales prices have been holding close to this range for about a year.

Have Daytona Beach Real Estate Prices Bottomed?

This is a big question and the answer will be more opinion that fact at this point. Saying that prices have bottomed is risky because we will still see monthly variations in the numbers. However, the numbers appear to be saying that we are in a more stable period than we were last year at this time. If we look back to 2009, we are in a much more stable market than then.

There are 4457 residential and multi-famlity properties listed as of this morning. This puts us at 10 months of inventory. In September 2008, there were 21.6 months of inventory. There were 5986 properties on the market then, but only 277 homes and condos were sold. Now, we have a drop of more than 25% in listings and a 61% sales increase.

So, the slighted convoluted answer to price bottoming is – inventory is down significantly, sales are up over the past few years and median sales and average prices are pretty stable. If we haven’t reached bottom we are close barring a major economic calamity.

Please contact Lynn at 386-566-7503 to discuss the market and what you are looking for. Click this link to –>search all Daytona Beach area homes and condos for sale.

August 2010 Daytona Beach Real Estate Sales Bounce Back

August sales of Daytona Beach real estate were up over 10% over both last month and over August of last year – 10.8% over last month and 10.1% over last year. For the year, sales stand at 3020 this year vs. 2447 last year through August, that’s 23.4% up over last year for the same period.

94 Condos, 20 condotels and 256 houses were sold for the month. That means that condos and condotels accounted for 30.8% and houses accounted for 69.2%. Condos are selling at a higher percentage than normal. Normally we see condos sales at about 24% of the total. That’s what we saw in 2009.

Looking at the chart below, sales under $200,000 are still dominating the market. Sales under $200,000 were 76.8% of all sales and sales under $300,000 accounted for 92.5% of all sales. This is now what we would consider a long-term trend. Sales of homes under $300,000 have been over 90% of all sales for several years now.

There are 4384 properties for sale in the Daytona Beach MLS as of this morning – 1308 Daytona Beach condos for sale and 3076 Daytona Beach homes for sale. The Daytona Beach MLS includes properties for sale in Ormond Beach, Port Orange, Holly Hill, Ponce Inlet, South Daytona and Ormond by the Sea.

Inventory Levels

There are still a lot of homes and condos on the market, but there’s a twist. There are a total of 4384 homes and condos for sale as of today. Based on August sales, that’s 11.8 months of inventory – still high. However, in August, 25.1% of properties sold were on the market for under 30 days and 44.3% were on the market for under 60 days. This means that aggressively priced properties are selling pretty fast. To put it in perspective, 164 homes and condos out of 4384 represents only 3.7% of the properties listed.

So, to go out on a bit of a limb… There are two markets. One is very healthy and hot and the other is not. The first market is hot with aggressively priced homes and condos, foreclosures and to some extent short sales. Aggressively priced homes under $200,000 are selling fast. The second market includes many very nice homes and condos that are not as aggressively priced.

Many people are listing their homes and then dropping prices over time. This eventually gets them into the right price range, but extends the time that the property will be on the market. If you want to sell fast, you need to price aggressively. If you have time, then set the price a little higher and wait. Regardless, get good comparisons of home values in your neighborhood or building from your real estate agent.

Daytona Beach Real Estate Outlook

We saw a little bounce back in August from July, but we are still well short of June’s 481 level. My sales were up in August and September is looking good too. We’ve had a lot of inquiries and we are showing a lot of properties. If our activity is an indication, the market will stay strong through September.

As always, please call me if you need information on any home or condo, or, just want to talk about the market.

Also remember to check out Port Orange real estate and Ormond Beach homes for sale. These are wonderful communities in the Daytona Beach area.

Sales of Daytona Beach Homes and Condos Drop in July

After six months of steadily rising sales, sales of Daytona Beach homes and condos dropped significantly in July. Sales as reported in the Daytona Beach MLS dropped 30.6% against last month and 11% against July of last year. For the first seven months of the year, sales are still up 25.5% over 2009.

So what happened? I don’t know for sure, but several factors may be at play. First, we may be feeling the effect of the Home Buyers Tax Credit that some expect boosted sales earlier this year and would have still been seen in June numbers. It’s possible, but not enough for a 30% drop.

Second, I think national economic and real estate news is scaring away many buyers. There is little good news reported in the national media; not that the local media is any different. Let’s just say there is little positive news.

Third, we think that many of the buyers under $200,000 are not our traditional buyers who come in the late Spring and early Summer to close in July and August. They are a completely different group looking to take advantage of the super low prices and values. We don’t know what their buying cycle is because it’s new.

Take a look at the table below for a breakdown of sales in both July and June and where the drops were biggest.

As you can see sales dropped across every price range. The last column in the table shows the difference in sales. Sales in the lowest end of the market dropped the least, but the drop was still high. Sales under $200,000 are still 75.5% of the market and sales under $300,000 are 90.8% of all sales.

When sales were rising, we were very cautious and emphasized that one month does not make a trend. We are going to be cautious with the results from July as well. While the July results are troubling, one month, in either direction does not make a trend. We will need to see what August and September results bring before we can be certain of a turn in the market. For the year, we are well up from last year. Check back early next month to see what happens.

Congress Extends Flood Insurance Program To September 30th

Update July 19, 2010

The House of Representatives has approved a five years extension of the flood insurance program. It has not yet been signed into law. It must still pass the senate before it can be sent to the President for signature.

Federal flood insurance is again available to buyers of Daytona Beach and Ormond Beach homes and condos. This is very important for people buying on the beachside and near waterways on the mainland. The legislation allows policies written before the extension to be retroactive, however, and this is very important, there is still a 30 waiting period between the date a policy is written and when it takes effect.

There are two important points to remember about flood insurance when buying a home:

1. The policy takes 30 days to be effective after it is written
2. Close before September 30th if you need flood insurance

We talked about the 30 days waiting period above, but if your are required to have flood insurance by a mortgage lender, you will need to set your closing date before September 30. I advise targeting 3-4 weeks earlier to make sure that any delays don’t push you into October. Also, policies will not go into effect if there is a storm that could affect the area. Give yourself plenty cushion.

If you’re paying cash, your closing won’t be delayed, but you could be without flood insurance until congress decides to extend coverage again. The current extension is the fourth extension without  a permanent law. There was a delay in the last extension that caused delays in about 1,200 closings a day across the country. The likelihood of another delay is high.

Please contact your insurance agent and instruct them to make sure that the flood insurance policy will be effective, not just written, on the day that you close.

Daytona Beach Homes and Condos Inventory Analysis Report

Total months of inventory for Daytona Beach condos and homes stands at 14.3 months, but a slow rate of sales in the upper price ranges is pushing the number higher. Taking a look at the chart below, we can see that months of inventory in the lower price ranges is lower than in the higher price ranges.

Daytona Beach Home and Condo Total Months of Inventory

Inventory is higher in the lower price ranges, but sales are higher as well giving a months of inventory number of 10.7 months. In the highest price ranges, inventory rises to 28 months.

Daytona Beach Homes Inventory

Homes inventories are lower than condo inventories. Looking at the chart below, we can see again that the lower price ranges have the lowest months of inventory.

Daytona Beach Homes Only Inventory

The less than $200,000 homes price range show the lowest inventory numbers. The over $300,000 price range comes in as the highest. Now, let’s compare home inventories against condo inventories.

Daytona Beach Condos Inventory

Condo inventories are again lowest in the under $200,000 price range, but not as low as home inventories. In the higher price ranges, the inventories are double the lower price range. The over $300,000 price range show 26.1 months of inventory – high, but not as high as the home inventory in the price range.

Daytona Beach Condos Only Inventory

What Do Current Daytona Beach Real Estate Inventories Mean?

February has shown to be a low sales month over the past three years. We are not yet in the buying season, so we should be aware that months of inventory will fall as more sales are recorded during the higher sales months. Sales were up in February over last year. See Daytona Beach Real Estate Sales Up 27.7% in February 2010 for more information.

We are seeing much more strength in the lower price ranges. In February, 79.5% of all sales were under $200,000. There is also a distinction that we need to make. Not all homes are priced to sell. If a home is well priced, for its condition, in the lower price ranges, it is selling. If you are looking for the best price and value, you are likely to have competition.

There is a general view that prices are stabilizing, but have not stabilized. We need to segment the market into price ranges when considering such generalizations. Understand what’s happening in the price range where you are looking to sell or buy, not in the general market. Higher priced homes and condos do not have the same numbers of buyers competing and will take longer to become stable. Lower priced markets are probably very close to stable.

We report inventory numbers monthly, so check back often. Tremendous bargains are available in all price ranges. We are selling homes and condos in this market and helping clients find the best values. Please contact me with any Daytona Beach real estate questions at 386-566-7503.

Note: This report included Ormond Beach real estate, Port Orange Real Estate, and local communities including Daytona Beach Shores, South Daytona, Holly Hill and Ormond by the Sea.

Daytona Beach Homes Months of Inventory Falls 52.4% in 18 Months

In the past 18 months, Daytona Beach Homes and Condos inventory, measured in months on the market, has dropped 52.4%.

We did a detailed analysis of homes inventory in July 2008. So, let’s compare July of 2008 when the market was close to its weakest point to now, after the highest sales month in over three years.

To check out the full analysis of July 2008 click here –> Daytona Beach Home Sales – Detailed Inventory Analysis July 2008. Let’s look at the overall difference first:

The first chart shows the difference in total inventory. We can see significant reductions in both condos and homes for sale. That’s a good sign considering it wasn’t too long ago, about 2-1/2 years when 7,000 residential properties were on the market. All the numbers we discuss here are for residential single-family homes and condos from the Daytona Beach MLS.

Housing Inventory Daytona Beach

The second chart shows total months of inventory. Again, we can see even more significant changes because of the increase in sales last year. Daytona Beach real estate sales were up 38.1% in 2009 over 2008 and these months of inventory numbers are calculated using December of 2009 sales when 414 homes and condos were sold.

Housing Months of Inventory Daytona Beach

So with the combination of higher sales and lower inventory, the total months of inventory for Daytona Beach residential real estate as listed in the MLS has dropped 52.4% of the last 18 months.

Current Daytona Beach Homes and Condos Inventory

This is significant. With a current inventory of 10.7 months, we are moving closer to a stable market. This number is still high compared to the boom period, but is getting closer a stable or neutral market. This is still a buyer’s market, but we need to look at the next chart to get a better understanding of inventory within different price ranges.

Daytona Beach Real Estate January 2010 Months of Inventory

If we consider about six months of inventory to be a neutral market; that is neither a buyer’s nor seller’s market, then homes under $100,000 have achieved that level. Condos under $100,000 and homes from $100,000 to $200,000 are close. Then we get to condos from $100,000 to $200,000 and home from $200,000 to $300,000 and we jump over the average.

74% of the total sales in Daytona Beach are under $200,000. That’s were the months of inventory are lowest. If you are a seller in this range, you are in a better position to sell than if you are attempting to sell a property over $200,000. Of course, your property needs to be priced right to sell regardless of price range.

If you’re a buyer, you will be seeing more competition in the lower price ranges. There are still tremendous bargains, but more properties are selling. More demand and less inventory indicates that price stabilization is occuring in the lower price ranges first.

Homes are selling in the higher price ranges, but not nearly in the same numbers. I’ve sold several condos recently above $200,000 and $300,000. I’m seeing a lot of interest in an Ormond Beach riverfront home on John Anderson Drive that priced just under $1,000,000. We had 10 showings and I have another one on Sunday.

What’s interesting about the drop in inventory and months of inventory is that this is happening in one of the communities hard hit by foreclosures. There are a lot of short sales, but despite the short sales and foreclosures, inventory is falling. This is one the most important factors in price stabilization and as mentioned above, we are already seeing this in the lower price ranges.

We’ll continue to monitor and report inventory numbers in the coming months.

2009 Sales of Daytona Beach Condos Improve 69.6%

Sales of Daytona Beach Condos increased significantly in 2009, both in sheer volume and as a percentage of all Daytona Beach real estate sales. 394 more condos were sold in 2009 than in 2008. 958 condos and condotels were sold in 2009 against a total of 564 for 2008.

The chart below shows the improvement visually. As you can see, in eleven of twelve months, condos sales were higher in 2009 than in 2008. The last four months of the year so an even more dramatic improvement that was in line with the overall increase in all 2009 Daytona Beach real estate sales.

2008-2009 Daytona Beach Condo Sales

Now it gets more interesting when we look at condos as a total percentage of all sales. In 2008, condo sales accounted for 19.5% of all residential sales through the Daytona Beach MLS. In 2009, the number increased to 24.0%. That means that on a percentage basis condo were up significantly.

As a percentage of all sales, condos were up 23.1%. This is important because the condo market had been accounting for about 1 of every 5 sales. In 2009, that changed to 1 out of every 4 sales.

Much of the increased interest in condos is because of affordability. I just sold a condo in a building in Ormond by the Sea for $245,000. A few years ago, a similar unit sold for over $500,000. That’s a big difference and make beachside living much more attractive to many people.

To discuss what I think are the best values in Daytona Beach condos for sale, give me a call at 386-566-7503.

You can search for area condos here:

Daytona Beach Condos for Sale (including Daytona Beach Shores)

Ormond Beach Condos for Sale

Port Orange Condos for Sale

Foreclosures are Not Going Away in Next Two Years

Foreclosures over the next two years will continue in Florida and around the country as more “interest only” and low payment loans come due for conversion.

At the end of the real estate bubble, people were buying Daytona Beach real estate with nothing more than stated income. The stated income in many cases covered only the interest only payment. Increases in income were expected to cover the increase in mortgage payments when the loan was converted and the borrowers started paying down the principal.

In addition to the payments increasing, some of the low payment loan did not cover the full interest payment and the unpaid interest has been added to the loan amount.

Interest Rates Rising

Another problem looming is the recent rise in mortgage rates are going to force payments even higher. The higher mortgage rates will make those payments unaffordable for many borrowers.

How many loans are out there? Here’s some numbers released by Fitch Ratings reported by Mortgage News Daily today:

• Loans to convert in 2010 – $47 billion
• Loans to convert in 2011 – $50 billion

$97 billion in loans, at let’s say an average of $200,000 per mortgage comes out to another 485,000 loans to convert. This is just one source leading to distressed properties. Continued unemployment and disappearing home equity are putting pressure on mortgage payments as well.

That’s a lot of money in loans that are likely to default when the higher payments become due. How many will be based on what happens with the economy in the next couple of years, but we are predicting a lot of the loans will become distressed and result in short sales and foreclosures.

Impact on Daytona Beach Homes and Condos

We know that Florida, Arizona and Nevada have a high percentage of these loans, many of which were bought on speculation. We expect we will continue to see many foreclosures and short sales. We remain concerned about the affect they will have on our market, but we also believe that the local market has already factored the reduced prices for short sales and foreclosure sales in market values.

Now, there are still tremendous deals to be had. The number of loans coming due for conversion means that the supply of distressed properties will be steady for the next two years plus. Not that there is a super high inventory of foreclosures. As of yesterday, 271 foreclosed properties were for sale through the Daytona Beach MLS. Most foreclosed property that is priced properly, and most are, are selling very fast, often with multiple bids.

Pricing is another story. Even though we still have historically high foreclosure rates, prices have stabilized in the past few months.

Another thing these numbers tell us is that for most people, the wisest course of action will be to buy and hold for at least five to seven years. All the distressed properties will have been worked out of the system by that time.

As we’ve stated in the past, we will be in a market dominated by foreclosures and short sales for several years to come. At least until 2012.

2009 Big Recovery Year for Daytona Beach Real Estate Sales

Sales of Daytona Beach Condos and Homes were way up in 2009. More homes and condos were sold in the 12 months of 2009 than in the previous 16+ months in 2007 and 2008. 3993 properties were sold in 2009 against 2890 in 2008 or 1103 more in 2009.

The total numbers tell the story, but looking at the graph of 2008 versus 2009 home sales through the Daytona Beach MLS shows it more dramatically.

2008 - 2009 Daytona Beach Real Estate Sales

The Last Four Months of 2009 Huge For Daytona Beach Home Sales

We can see that the increase in sales was even more dramatic over the last four months of the year. Sales from September to December were up 74.1% in 2009 over 2008. December sales were up 79.6%

Why Are Daytona Beach Property Sales Up?

There is a lot of speculation to attempt to tell us why sales are up. My contention is that we are closer to normal sales levels based on historical sales before the big speculative run-up. In other words, we are pretty close to normal levels before the boom. When sales went bust, they swung very much too low and have now come back to normal.

There is little doubt that the home buyer tax credits are helping, but we don’t know the extent of the impact. We also know that Fannie Mae, Freddie Mac, FHA and other government agencies are backing 90% of mortgages currently written. So we see that the risk of  any mortgages being written is being assumed by the US government. See more on this at Daytona Beach Real Estate Market Boosted by US Treasury.

And then there is the bargain factor. People are taking advantage of what they see as low prices. Whether they are at the low point is impossible to say. We won’t know that until well after we hit bottom. What these buyers are saying, with their money, is I am willing to buy at this price. I’m getting a bargain.

Where Do Sales Go From Here?

I will go out on a limb as say that sales will be about level for 2010. I’m basing this forecast on several factors, but the overriding factor is that sales were up most dramatically at the end of the year. Meaning that the first eight months were not nearly dramatic in their increase. That will buffer variations in sales month to month. Simply, sales for the year averaged 333 properties per month, but the final four months of the year saw the following sales:

• September 371
• October 355
• November 404
• December 413

The average for the final four months was 386 or 53 properties higher than the average for the entire year. That gives a cushion for things like the tax credit not being renewed or delays in the economy recovering.

On the positive side; if the economy comes back strong and more mortgage money is made available, sales could be much higher. So, at this point, my best forecast is for level sales with a good upside potential.

I’m still concerned about inflation and a rise in inflation would have at least a short term impact on sales. I’m not an economist, so this forecast is unscientific. The best advice for people in the market is to closely monitor economic, price and sales news. Of course, you can do that here. We post articles nearly every day to keep you updated.

US Treasury Removes Limits on Public Money for Freddie Mac and Fannie Mae

There is little doubt that the Daytona Beach homes market has been boosted by US government actions. The home buyers tax credit,  FHA,  Freddie Mac and Fannie Mae backing mortgages supports the market. I seen estimates of FHA, Fannie Mae and Freddie Mac involved in 90% of all current mortgages.

CBS Money Watch reports:

More than 90 percent of all loans are bought by either Fannie Mae, Freddie Mac, FHA, Ginnie Mae, or USDA (rural development loans). That means Uncle Sam is taking on virtually the entire risk of the housing market. (Fannie Mae and Freddie Mac: Happy Anniversary)

The following blurb was published in the January 2nd edition of the Economist:

The share prices of Fannie Mae and Freddie Mac soared in response to the Treasury’s recent decision to remove limits on the amount of federal aid to the companies. America’s biggest “government sponsored enterprises”, were bailed out in 2008 amid huge public mortgages losses. The amount of public money each could obtain was capped at $200 billion (neither has received that amount), but the Treasury now wants to “leave no uncertainty” about its commitment to the firms.

What Does Uncapping Fannie Mae and Freddie Mac Public Money Mean?

In a word, the Treasury action means one thing – unlimited support with public money. These government agencies, and others, will continue to purchase and guarantee mortgages for the banks. The support was limited. Those limits have been removed freeing mortgage lending expansion now and in the years to come.

I’m not going to argue the wisdom of the action by the Treasury. I’m pointing out that real estate prices will gain some measure of support. Coupled with the current home buyers tax credit, they are stimulating home buying. We don’t know whether the tax credit will be extended. I’m doubting it at this time, but if the federal government continues to guarantee mortgages, that will allow more mortgage money into the market.

On the other side of the pricing equation, foreclosures and short sales continue to dictate pricing. We don’t see this ending until 2011 to 2012. That doesn’t mean that price will keep falling until then. We have seen more buyers move into the market at different price drop points. If there are more buyers than foreclosure and short sale properties, then prices will stabilize or rise.

Keep your eye on the market if you’re planning to buy anytime soon. If you are, talk to me to see if you qualify for the tax credit. It could mean $6,500 to $8,000 in your pocket that may not be there after April 30th.