Daytona Beach Homes Market Report

September 1, 2008

Welcome to the weekly market report for real estate in Daytona Beach, Florida. In this report, we focus on what's happended in the past week. An analysis of last month can be found at Daytona Beach Real Estate Market Report July 2008 on our blog. August will be completed this week.

Lynn's Activity Level

I've been busy again over the past week with clients and I've written several contracts. I'm writing another today. I also have an offer on one of my listings. We had something happen that doesn't seem likely in this market. A client had come in last week a looked at a number of properties. She returned home to decide on which home she would make an offer. She decided, and when I looked in the MLS at the property, it had gone pending. Another offer had been accepted. Go figure.

The buyers I'm working with are very savvy and are willing to invest the time necessary to uncover good deals in this market. I'm very happy to be working with these people and thank each of them. Me and my team are focused on finding exactly what each buyer wants and needs at the best price possible. We don't care how much work it takes. I am happy - no, make that overjoyed, to be working with clients.

Weekly Homes Sold Report

This Week Homes Sold Report

Period	Homes Sold
Week Before (8/18 - 8/24)	58
Last Week (8/25 - 8/31)	84
Last Month (7/25 - 7/31)	92
Last Year 8/25 - 8/31)	79

Month To Date Homes Sold Report

Period	Homes Sold
This Month (Through Aug 31)	261
Last Month (Through July 31)	299
Last Year (Through Aug 31)	279

Year to Date Daytona Beach Homes

Period	Homes Sold
This Year (January 1 - Aug 24, 2008)	1993
Last Year (January 1 - Aug 24, 2007)	2135

(Note: There is a delay of a few day in entry of homes sales by some agents so current reported numbers are generally a little lower than actual, but we believe reporting the most current numbers gives a good trend indicator.)

Homes Sold Analysis

After July sales of 299 properties, the best sales month since September 2006, August sales of 261 homes and condos could be seen as a disappointment. While we would like to see sales improving every month, it doesn't work that way. August sales were 12.7% lower than July. We are on a little bit of a yo-yo, but look at the sales graph for the year and we can see that the trend is pretty good:

From the graph, we can see that we have reached a new level, starting in April, above 250 property sales per month. We believe the information in this graph is important. First, any sales within the band, show that we are fairly stable in sales numbers. Second, we can observe any changes, either up or down, as a signal of market shift. You will see this graph often on our site in the future.

Median sales dropped from $185,000 in July to $164,000 in August. At first glance, this appears to be a big concern, but a little perspective is needed. Median price is the half way point. In the case of property sales, 1/2 of properties were sold below $164,000 and 1/2 were sold above. As an indicator of value of any single property, it's a very poor indicator. Let's compare July and August to see how median price can shift:

Price Range	July	August
Under $200,000	168	168
$200,000-$300,000	77	44
Over $300,000	54	49
Total	299	261

Ok, it if wasn't obvious before, this table shows what happened between the two months. The under $200,000 market is rock stable. The entire difference in sales between the two months were in the above $200,000 price ranges with the $200,000 to $300,000 market dropping 42.8%. The strength of the Daytona Beach real estate market is in the under $200,000 price range. Median prices will naturally drop big time when a market market segment drops. Again, this says nothing about individual home values, however, it does tell us the price ranges where people are buying. We will analyze the drop in the $200-300K market later on this week when we complete our monthly analysis.

Sales for the last five months were:

August 261
July 299
June - 259
May - 286
April - 278

We believe there is pent-up demand that will cause a mini-boom in 2009, but credit needs to become more available and buyers confidence needs to improve before that happens. Interest rate increases may put a damper on future sales but interest rates are holding within a pretty narrow band for the last two months.

If your interested in Historic Daytona Beach homes sales they are included in a article on my Daytona Beach Real Estate Blog. You can also see a graph of sales and average home prices for the past 18 months at Daytona Beach Real Estate Market Analysis.

Current Mortgage Rates

	Today	Last Week
30 YR Fixed	6.26%	6.32%
15 YR Fixed	5.77%	5.81%
5/1 ARM	5.92%	5.89%
30 YR Fixed Jumbo	7.36%	7.43%
5/1 Jumbo Arm	6.44%	6.38%

Mortgage rates dropped slightly again. We now believe that the bond markets that drive mortgage rates has already accounted for the current levels of inflation and that most bond investors are betting that the inflation spike is short. Oil prices are banding in the $115-$120 range, even with a storm heading for the Gulf coast. We will need to see the impact from Gustav in the next few weeks. A lot of gulf oil rigs and mainland refineries were in the path of the storm. If the inflation rates are temporary, bond rates will hold. If inflation continues to grow, bonds rates will need to rise, taking mortgage rates with them. We continued to be concerned about long-term interest and mortgage rates and advise anyone considering buying homes to watch interest rates very carefully.

What's the impact of increased mortgage rates? It's over $130.00 per month for a $200,000 mortgage for a 1% increase. That translates into higher payments, or less home for the same payment. Please watch these numbers. We publish them here weekly.

Note: Jumbo Limit for the Daytona Beach area is $417,000. Source: BankRate.com

Home Inventory Numbers

Period	Residential Inventory
This Week	5906
Last Week	6022
Beginning of 2008	7,000

202 listings expired today dropping the home inventory number below 6,000 to 5906. With the 261 sales for the month of August, that puts inventory in months at over 22 months. However, in the under $200,000 market, inventory levels are at 12.7 months. We have been within 1/2% of the 6000 number for serveral months. The levels are still lower than the beginning of the year, but they are stuck. We will continue to monitor the rates as they are a key factor in determining months of inventory on the market.

The inventory level in months declining is one of our keys. Watch this number carefully. More decline signals more market strength. A 15% drop since the beginning of the year is a positive sign, but we need rates at about 3600 properties before we can call a stable market. Note that inventory in months is quite different for different price points. For instance, homes and condos priced below $200,000 are at 15 months of inventory today which is very close to a stable market.

Recent Real Estate News of Note

2001 Prices for Daytona Beach Homes and Condos?
I’ve heard several times now that buyers should offer 2001 prices for existing Daytona Beach real estate. I know of people who are making offers in this price range. I don’t know of anyone who has had such an offer accepted.

LA Times Kills Sunday Real Estate Section After 107 Years
On August 3rd, the LA Times did not publish the Sunday Real Estate section for the first time in 107 years.

What is the Next Tipping Point for Real Estate
One of our most popular blog entries on how we got to where we are in this market.

Where Credit Is Due: A Timeline of the Mortgage Crisis
If you read on article about sub-prime mortgage collapse causes, this is the one.

Daytona Beach Condos Buyers Strategy for 2008
What's the best strategy now for Daytona Condominium buyers?

Bypass Real Estate Agents and Save?
Read this before you decide to buy or sell your home without a real estate agent.

10 Signs to the Bottom of Real Estate Markets
Near and dear to Daytona Beach Home buyers and sellers. Gives some good things to watch for.

If you have other information you would like to see as part of the Daytona Beach Real Estate Market weekly report, please send me a message and let me know.The following information is presented to give you a quick idea of the current state of the Daytona Beach Home and Condo market including homes sold, home inventory, mortgage rates and real estate news of note. Longer Term analysis can be found at our Daytona Beach Real Estate Market Analysis. The market report includes Daytona Beach, Ormond Beach Real Estate, Holly Hill Real Estate, South Daytona Real Estate, Ponce Inlet, Wilbur by the Sea, and Ormond by the Sea.