The finger in the dike approach is not working. The national and Daytona Beach condo and home market is being flooded with short sales and foreclosure properties. More distressed properties are entering the market than are being sold. The result? Prices keep dropping. This will go on and on until the people in Government and mortgage lending stop sticking their fingers in the dike and actually take the only action that will stop the flood.

Keep People in Their Homes

The solution to dropping prices, eroding equity and national calamity is to keep people in their homes. The answer is mortgage mitigation. Simply, let’s figure out how to re-write existing mortgages so that people can stay in their home. Keeping people in their homes will stop the flood of distressed homes on to the market.

In the Daytona Beach MLS, we have over 6,000 homes and condos listed. Based on November sales, that 30 months of inventory. CNBC ran a report today that 36% of mortgages modified in the 1st Quarter of this year are in default afer three months. That’s means that the mortgages being modified are not being modified so that people can stay in their homes. I submit that many of the mortgages are modified so that the lenders can get a little more money out of the borrower before default, not so that people can stay in their homes.

What I’m suggesting will not be easy. It can’t be solved with the wave of a government pen. It will require a reverse of direction of what has been happening to date - the socialization of financial institution losses. The banks continue to dump properties into a saturated market, and they continue to accept 60-70 cents on the dollar for short sales. Meanwhile government bailouts help them through the process.

Mortgage mitigation will require a change of focus of the government and probably a forced change of focus with the mortgage holders. If mortgage mitigation does not happen, the expect prices to remain depressed for several more years while the foreclosures and short sales work their way through the system.

What do you think? I would appreciation comments.

The front cover of the current issue of Business Week (December 1) states “The Subprime Wolves are Back and They’re Feeding Off the Bailout.”

This article will really get your blood boiling. What’s happening is that many of the same mortgage brokers whose aggressive, sometimes illegal, and pure greed lead to the real estate run-up and crash are at it again. But this time, they are jumping on FHA loans.

Here’s an example that pretty well sums it up:

A condo developer in South Florida sets up a mortgage company to finance loans for buyers of his condo units through FHA loans. His mortgage company made 1855 FHA loans since November 2006. 923 of those loans are in default proceedings as of October 31.

More Foreclosures Ahead

The Business Week article describes other abuses and how the FHA is overwhelmed and has difficulty properly reviewing applications. BW exposes mortgage brokers who were put out of business in several states setting up shop with new companies to push FHA loans. They are using the same tactics they did in pushing subprime loans. The result - a new wave of foreclosures. With FHA loans numbering 1 in 4 of new loans issued, this will lead to more foreclosures. Not what we need at all. These loans are guaranteed by the US Government, so yes, you and me will be paying.

There is a lot of really good information in this article. You still may be able to get a copy of the magazine or check it out at your local library. A podcast version is available at the Business Week webiste.

The Daytona Beach real estate market is rocked with short sales and foreclosures. We don’t need anymore. I’m sending a note to my congressman to ask him to read the article and take action. The sharks and wolves need to be stopped.

We love Greek food. We’ve been sorely missing a nice place to go to for some gyro and Greek specialties. Well, after a tough closing today, we stopped for lunch at Dimitri’s in South Daytona and had a really good gyro sandwich.

The gyro sandwich was great and packed full of meat seasoned to perfection. Dimitri’s is a very nice sandwich place that you should try out if you love Greek food.

We’ll be going back often for some Gyro. They also have mousaka, pastitso, and dolmades on the menu and a host of sandwiches. We may try the some of the rest of the menu, but it will be tough not ordering the gyro again.

Dimitri’s is located at 2450 South Ridgewood (US1) in South Daytona. Give it a try. For more on Dimitri’s and more recommendations, check out our Daytona Beach Restaurant Recommendations.

I offer these recommendations because in my travels around the area helping Daytona Beach real estate buyers and sellers, I get to stop at a lot of places to lunch and dinner. I offer up recommendations on some of my favorite places.  Enjoy.

The market price for Daytona Beach real estate is being driven by short sale and foreclosure transactions. If you are selling any property, whether or not you’re in financial distress or not, the price is being determined by these transactions.

The logic is quite simple - Why would a buyer want to pay the so-called market price, when they can buy 20-40% below market?

All the deals that I’ve done recently have been short sales or bank owned foreclosures. The prices were below market. Based on that and the experience of other agents in my office, we need to understand the true nature of the current market.

The True Nature of the Current Daytona Beach Real Estate Market

Condos in Daytona Beach and homes in Daytona Beach are selling below market value. Now, if all homes and condos are selling below market, what’s the real market value? It’s is, and always has been, what homes are selling for today.

There are two markets and that’s why 6,000 plus homes and condos are listed in the Daytona Beach MLS and there are many others that are being sold without listing in the MLS. It comes down to distressed properties and non-distressed properties. If you are attempting to sell a non-distressed property, you will need to be creative by offering incentives. The incentives may be something like  lease purchase or owner financing where you are tapping a market that cannot qualify for a mortgage in the current environment. You really need to offer a reason other than price because you can’t compete on price without losing significant equity.

Buyers are looking for bargains and if you home is priced at market, that’s not a bargain. We don’t see this situation changing anytime soon. Many ARMs and balloons are yet to come due - all the way out to 2011. It’s really a double whammy for a lot of people - they must accept the big adjustment because they can’t refinance the ARM, or worse, they can’t refinance when the balloon comes due because they can’t get mortgage money.

We see more distressed properties entering the market for the next few years. Worse, we fear that many of the people who are in negative equity situations, who need to sell, with walk away from their homes, making matters worse.

The situation is better for buyers, but many people are fearful of prices dropping further and waiting. This may be a prudent strategy, but if they are not involved in the market, they will miss the bottom. I suggest that anyone interested in buying or selling in this market, read our Daytona Beach Market Reports. We publish weekly and monthly reports with sales figures, interests and other important relevant information. You can always call me at 386-566-7503. We cover Ormond Beach, Port Orange, Palm Coast, Ponce Inlet, Holly Hill and surrounding areas.

We are establishing this new monthly report to analyze the details of Daytona homes and condos inventory on the market in the Daytona Beach MLS. The inventory numbers are shown in total by price range and the broken down by houses and condos.

Total August Daytona Beach Real Estate Sales

Total Daytona Beach House and Condo Inventory

As of today, September 9, there are 5986 houses and condos listed in the Daytona Beach MLS. Based on 277 sales in August, the current inventory is 21.6 months. This is obviously a buyers market overall. However, look at homes priced under $200,000 and we see the average for those price ranges are below overall average. Above $200,000 and the months of inventory jump significantly. Under $200,000 is much stronger than above that number.

Daytona Beach House Inventory

There are 4053 houses on the market. 214 houses were sold in August for an average of 18.9 months of inventory. The houses number is lower than the overall combined house and condo average meaning that there is less inventory in months for houses than condos. Again, the under $200,000 market is the lowest price range in terms of average inventory in months.

Daytona Beach Condo Inventory

There are 1933 Daytona Beach condos on the market. 63 condos were sold in August for an average of 30.7 months of inventory. Condos are not selling at the same rate as houses with approximately 1 condo sold for every 4+ houses. At an overall average 30.7 months of inventory, condos are over 62% higher than houses in average inventory in months. Condos listed at $300,000 are not selling well with only 27% of sales, but 44% of inventory.

Summary

Daytona Beach real estate Inventory has been high and remains so. We have barely moved in inventory for months, remaining at about 6,000 properties on the market. There were about 7,000 properties on the market at the beginning of the year, so we’ve dropped about 14% since January 1. But, again, we haven’t seen any drop in months.

We are in a buyer’s market at all price ranges, but less so in the lower price ranges. This is what we have been seeing for the entire year, with sales under $200,000 ranging from 55% to almost 65%, of all sales.

Port Orange Florida is located just south of Daytona Beach on the central Florida coast. It’s not as well known as Daytona Beach, but offers a better alternative for many people.

Daytona Beach real estate includes many older homes and older neighborhoods. You won’t really find that in Port Orange. About 80% of Port Orange Homes were built in the last 30 years.

Port Orange is a planned city. You can see that when you drive on the main roads. Businesses are set back from the road and there are strict rules about signs. It’s very attractive and refreshing to see. There are also many activities sponsored by the city and City Center includes a large recreation facility. The facilities are excellent. My son played baseball and soccer there when we lived in Daytona Beach Shores in the mid 90s.

There are many communities in Port Orange including Cypress Head, Water’s Edge, Spruce Creek Fly-In. Cypress Head and Spruce Creek Fly-In include golf courses within the communities. Cypress Head is public and owned by the city, and Spruce Creek is private. There’s also an executive golf course at Crane Lakes which is a manufactured home adult community.

I like Port Orange. There’s great shopping, schools, and restaurants. I have a Port Orange Real Estate section on the site. You can search all Port Orange homes and condos for sale without needing to register.

If you need more information or would like me to search properties for me, please call me at 386-566-7503.

Hurricane Katrina didn’t directly affect Daytona Beach, but we were all affected in the days, weeks, and months afterward. It’s been three years since Katrina and now Gustav is forecasted to make landfall west of New Orleans tomorrow.

Evacuations are underway and most people will be out of the city and the surrounding communities when Gustav hits. It’s what happens afterward that’s important for us in the Daytona Beach area.

I hope with all my heart that the storm turns out to much less powerful than forecasts. If it does hit, we need to be prepared. We Americans have big hearts and when needed we step up and help. You and I will be asked to support the people affected by the storm. I plan to help in the best way possible.

The American Red Cross is always at the forefront of disaster assistance. They are among the first on scene and know where to send aid. Here is a message from their website:

“The Red Cross is closely monitoring Hurricane Gustav’s track. We’ve moved staff, volunteers, vehicles and supplies into multiple states in preparation. We must respond before disaster strikes, which means being ready with the right resources, in the right place, at the right time.”

You can donate at the Red Cross here. Please, if you can, donate right now on line and your money will be put to work immediately. I just donated a few minutes ago. Please, pull out your credit card and donate. The donation can be as little as $10, but if everyone in Daytona Beach would do that, well you get the idea.

If you own property that is not rented and might be available, please consider making that property available to displaced residents of the disaster area - if it’s necessary. There will be government payments available, if it’s like Katrina.

Thanks for helping.

Do you know where to get the best deals on homes and condos in Daytona Beach, Ormond Beach, Port Orange? I do. Do you know which builders and developers are really dealing? I do. Do you know how to present a short sale offer that will have a good chance of getting accepted? Do you know how to find short sales? Again, I do.

Why in the world would you know these things? It’s not what you do everyday, seven days a week. And really - you don’t need to know these things. You need to know someone who does.

There are really good deals being offered by developers and builders, the best deals I’ve ever seen. The developers need to move their existing inventory which has grown from cancellations. People walked away from the higher contracted prices, even forfeiting their deposits, as prices dropped. This leaves the developer in a lurch.

The situation can be used to your advantage, and I can help. How? When making an offer to a developer, seller or bank, the more high quality factual information you have, the more enticing we can make the offer.

My job is to help you find the Daytona Beach house or condo to fulfill your dreams and desires. Whether it’s a new home, a new condo, or a great deal on an existing home, I can help you.

Real estate is very complex right now, and there is just too much information for most buyers to gather and understand. There’s also alot of myths and plain BS. I can cut through the BS with you and get you the deal of lifetime. Call me at 386-566-7503 to begin the conversation. You can also contact me through our real estate informaton contact form.

It’s hard to believe that a small town like Daytona Beach has two Olympic gold medalist. Just a few minutes ago, Mainland grad and Ormond Beach resident Phil Dalhausser won the Olympic gold in beach volleyball. He and his partner Todd Rogers beat a Brazilian team for the gold.

Phil is known as “the thin beast” and man was he a beast in the third set. The exhausted Brazilians were no match for Phil as he blocked shot after shot. His partner said in an interview after the match that he just watched.

It was exciting match that was even after two sets. There was no doubt about the final set though. Dalhausser started blocking the Brazilian’s spikes early and often. The final set score was 15-4 which is a total drubbing in this sport. Congratulations Phil and Todd.

Our other gold medalist, Ryan Lochte won two gold medals in swimming. One in a relay, and an individual gold medal in the 200 meter backstroke.

So, in the middle of Tropical Storm / Hurricane Fay, on the other side of the world, Daytona Beach athlete win our third gold medal of the 2008 Olympic. Pretty Cool!

Spruce Creek High School graduate and University of Florida swim star was already an Olympic Champion in relays, but winning the individual Gold in the 200M backstroke over teammate Aaron Piersol, the 2004 Olympic Champion must be very special.

Ryan had no time to celebrate though. He will get into the pool again against Michael Phelps to swim the 200M individual medley final. He has about 30 minutes between races.

The 200M backstroke was an exciting race and close to the end. Ryan won the race with a great final turn.

The Olympics come home when someone from our town competes. To me, that’s exceptional. But, for a local athlete to win a gold medal is amazing. All the athletes train hard and devote so much time to reaching world class level.

Congratulations to all the competitors, but to hometown athlete Ryan Lochte, congratulations and thanks for the thrills. The Lochte family is a swin family. Both parents have coached Ryan. Congratualtions to the Lochte family.

Daytona Beach Mainland High School graduate Phil Dalhausser and teammate Todd Rogers have advanced to the next round in Beach Volleyball. They are favorites to win the gold medal. Good luck guys.