Selling Daytona Beach real estate is a 365 day a year job. Only a few short years ago, time on the road was wasted time. I’m talking about before cell phones, and now mobile internet connections.
We just took a short driving trip to South Florida for a few days. It was a combination of a short vacation and a little business for my husband. I used to dread the long driving trip as a boring waste of time. Now, it’s an opportunity to work with clients even on the road.
During the trip up and down, I was able to receive and send email messages, use the internet to access the MLS for clients and talk on the phone. Here’s my toolkit for the mobile electronic office:
Cell Phone
AT&T Air Card
Cigarette Lighter Power Supply for the Computer
The Air Card did pretty good, but had a few dead spots on I-95. There were no problems with the cell phone and the portable power supply works great to keep the computer going.
I feel much more comfortable traveling than I did a few years ago. I can relax when I know that people can contact me and that I can call clients if needed. In the past, I would be concerned about being out of contact.
I take client service seriously and although many think it wrong to be working on vacation, I accept the nature of the business of selling homes in Daytona Beach. Working a few hours a day is a small price to pay to know that I’m up to date with all my client’s needs.
When I first became a Daytona Beach real estate agent eleven years ago, it would have been nearly impossible to easily stay in touch. Cell phone service was spotty and mobile internet computing was unknown. Now, both are indispensable tools in providing the best possible service.
I can’t always answer my phone, but my goal is to return messages as fast as possible. I will have a new mobile computer on Friday that weighs two and a half pounds and will allow me to check email when I’m away from the office.
Some may call this excessive, but I believe the capability to contact clients and respond with the best possible information is an important part of customer service.
Mortgage Rates are a Game Changer for Daytona Beach Real Estate
Mortgage rates are at the lowest rate in history as recorded by Freddie Mac. A 30 year fixed rate mortgage sits at 5.14% with points of 0.8 as of today. The Freddie Mac survey began in 1971 and this is the lowest ever.
So now we have a race. With mortgage rates dropping the cost of borrowing lowers the monthly payments for a Daytona Beach condo or home. This makes the real cost of owning much less than two months ago, but the question is, how long will this last. Prices are still dropping, interest rates are dropping. How long will this last.
If you are looking to time your purchase of a home or condo in Ormond Beach, Daytona Beach, Port Orange or the surrounding area at the bottom, low mortgage rates complicate the picture. Here’s why:
$200,000 mortgage at 5.14% = $1,090.82 monthly payments
$180,000 mortgage at 6.5% =$1,137.72 monthly payments
That’s right, if mortgage rates rise and prices fall, you could end up paying more every month for your home or condo.
Waiting for prices to drop could cost you Big Money
It seems unreal, but we believe that this is a big opportunity. Mortgage rates will not stay low for long. They are so low right now because of the state of the economy and the lack of lending. The government is spending a lot of money that will need to be paid back later and we see inflation coming when the economy starts growing again. The government is printing money for these bailouts. Committed and proposed stimulus money is double the current national budget. To supply this money the government will need to borrow or print more money. Either scenario creates inflationary pressure. It’s just a matter of time.
Please Consider Acting Now
If you are a buyer who will finance your purchase, and you are in a position to do so in the short-term, record low mortgage rates have created a limited opportunity for you. Taking advantage of these great rates will give you protection against prices falling.
Please consider this information carefully. I don’t want to see people missing what many are considering a once in a lifetime opportunity. At a minimum, check back here regularly and at my Daytona Beach real estate main site. We will keep you up to date on what’s happening.
Daytona Beach Real Estate Market Report Video - November 2008
We’ve just published our November Daytona Beach Homes and condos sales report in video format. You can check it out here:
Final sales for the month came in at 203 homes and condos or 9.4% below October sales. The under $200,000 market accounted for 71.4% and under $300,000 totaled over 90%.
Sales above $300,000 are just plain ugly. On 19 properties sold in that price range leaving years of unsold inventory on the market. In October there were 33 properties sold in that range. With a difference of 14 properties, it accounts for nearly the entire drop of 21 units from 224 in October to 203 in November.
We published our Daytona Beach Homes Inventory Analysis November 2008 report a few days ago showing how inventory numbers have risen based on reduced sales. At 32.9 total months of inventory on the market, we have a long road ahead of us.
Daytona Beach Condos and Homes Inventory is Very High
Here is a quick analysis on the state of Daytona Beach Homes inventory using the sales numbers from November 2008. Months of inventory is the numbers of properties on the market divided by sales. We’ve broken the numbers down by price range because there are big differences between inventory numbers at different price ranges.
Sales Range
Inventory
Nov. Sales
Months Inventory
% of Sales
Under $100,000
639
49
13.0
24.1%
$100,000 to $199,999
1985
96
20.7
47.3%
$200,000 to $299,999
1282
39
32.9
19.2%
$300,000 to $499,999
1051
14
75.1
6.9%
$500,000 to $999,999
676
4
169.0
2.0%
Over $1,000,000
245
1
245.0
0.5%
Totals
5878
203
29.0
From the chart, we can see that at 29 months of inventory overall, we are in a serious buyer’s market. A buyer’s market is usually defined as over six months of inventory. We are not close to that number in any price range for Daytona Beach condos and houses.
Homes on the market below $200,000 are selling at a much higher rate than other market ranges. The months on inventory above $500,000 is painful to view and should really be looked at in years of inventory. Homes above $300,000 made up less than 10% of sales in November.
To put the Daytona Beach real estate market in perspective, under $300,000 has the best chance of selling with current buyers and under $200,000 makes up over 70% of all sales. Homes and condos between $200,000 and $300,000 make up nearly 20% of sales, but the inventory number, at almost 33 months, is above the 29 month average. Above $300,000 is dismal.
Buyers in today’s market are expecting big bargains. Sellers who are not super aggressive in their pricing will not sell. Short sales and foreclosures are dictating sales prices and there are plenty of these properties in all market ranges for patient buyers.
Declining sales over the past three months have pushed up the inventory in month numbers while the number of properties on the market has held pretty steady at near 6,000, but the action in the lower price ranges has remained consistent.
What do we expect? An eventual turn-around, but it’s going to take a long time for distressed properties to work through the market. It will get better and mid to late 2009 seems to be the consensus at this point. Prices will stabilize and then sales will go through a mini-boom as people realize the best bargains will soon be gone.
However, individual buyers are getting incredible deals. It’s about being in the right place at the right time. If you are interested in discussing the market give me a call at 386-566-7503 or 888-519-9579 and we can chat about your situation.
Note: these numbers are from the Daytona Beach MLS. Not all sales go through the MLS, but these numbers give a solid indication of the market.
A Voice of Calm and Reason Among the Panicked Pundits
Once in a while, in the midst of panic and confusion, a calm voice can be heard - if you listen carefully.
Nearly all the content on this blog is original, but sometimes I run across great articles from other sites that I believe provide valuable to my clients and readers.
Nearly everyone is concerned about the economic recession, how it will affect us personally, and how long it will last. Of course, the Daytona Beach homes market has been in recession for a few years and me and my readers are sure interested in answers to our questions.
Anthony Karydakis, a professor at NYU’s Stern School of Business, published an article on Fortune’s web site titled, How long will the recession last? If you like shouting, pessimism, and unsubstantiated opinion, click away right now, BUT, if you are interested in reading an articulate, sensible, evidence-based analysis, read Professor Karydakis’ article.
I came away from the article with a changed perspective. I was reminded that we experience periodic recessions and that they generally don’t last that long (about 10.4 months since WWII according to the article). I was also reminded that there are cycles to every aspect of our economic lives. Yes, the Daytona Beach real estate market will recover and begin growing - eventually.
Professor Karydakis doesn’t gloss over the severity of the recession we are in right now, but he adds sensible points like when he talks about the “deepest recession in decades”:
“The most intuitive, and legitimate, reference is the 1981-82 recession, which lasted a longer-than-average 16 months and led to a peak of 10.8% in the unemployment rate - by all standards, a pretty serious affair. Still, it would take an extraordinary amount of additional severe damage to today’s economy over a fairly long period to drive the unemployment rate from its current 6.5% to double-digit territory.”
So, what’s his prediction?
“How long will this one last? The prevailing view: probably through the middle of 2009.”
There you have it, but I encourage you to read the article. It’s a short read, but very informative.
Big news is rumored to be coming out of Washington that could spur home sales in Daytona Beach and around the country.
Treasury Department officials are in conversation to offer 4.5% mortgages through Fannie Mae and Freddie Mac. The leak is causing quite a stir as people currently in the process of financing a home are scrambling to stop the process while they see if the rumor is true.
The New York Times reported the story on Wednesday and I’ve checked it out as best as I can, but there seems to be some possibility that this will happen. Of course you will still need to qualify and it appears that this program will be for new purchases and not available for refinancing.
National rates are about 5.5% today, so a drop of 1% results in a drop in the monthly payment of about $130 on a $200,000 mortgage.
We will keep you updated as more information becomes available.
FHA Limits Rise to $625,000 from $362,700 in January
FHA loans limits will rise on January 1st. Will this help the Daytona Beach Homes and Condos market? I’ll say, maybe a little.
FHA loans are being made right now. It is one of the few avenues available for many buyers. The Daytona Beach real estate market has suffered at the high end. In October, less than 10% of area sales were above $300,000. Making loans available at the higher limit may result in a few more sales.
Can I Qualify for an FHA Loan?
The question for most buyers is can I qualify? According to the FHA Website, you are likely to qualify if you can answer yes to these questions:
Two Years of steady employment, preferably with same employer.
Last two years Income should be the same or increasing.
Credit report should typically have less than two thirty day lates in last two years.
Bankruptcy’s must be at least two years old, with good credit since.
Foreclosure’s must be at least three years old, with good credit since.
Your new mortgage payment should be approximately 30% of your gross income.
There you have it. An option to pursue where loans are being made. If you are in the market and need a loan, go to an established and reputable mortgage source. Beware the FHA Loan Sharks describe in this blog post.
If you need help in finding a solid local mortgage lender, give me a call at 386-566-7503.
The preliminary numbers are in and sales have fallen again. In October 225 homes and condos in Daytona Beach were sold. In November, 198 home sales have been recorded to date. These are preliminary numbers because a few more sales will be added by Daytona Beach real estate agents over the next few days.
The fall is expected based on seasonal affects (209 homes sold in November of last year) and the lack of mortgage money and the lack of economic confidence.
The trend of homes under $200,000 is accelerating with 71.2% of sales recorded in that price range. Over 90% of Daytona Beach homes sold were sold under $300,000. Only 19 homes sold above $300,000. The top end of the market is nearly dead.
The top market should be boosted when FHA limits rise in January, but we’ll see. Right now it’s dismal for high end properties.
Properties under $200,000 remain stronger, but there was a 9% decline in those numbers in October. Where the market goes from here is based on mortgage money becoming available and buyer’s confidence. Until we have money available from lenders and buyers more willing to buy, we will be in the lower ranges of the market.
The prices we are seeing are based on short sale and foreclosure prices. Until those properties are worked out of the market, “normal” prices will not return. That is going to take a few years. It is a stronger and stronger buyer’s market and the deals are amazing for those who are willing to accept the risk.
In the long term the supply of distressed properties will decline and prices will rebound. People buying now might realize gains of 30-40% within 5-7 years. That’s a pretty good return.
The market is changing fast and if you’re interested in distressed properties we should talk. Nearly all of my sales are now associated with distressed homes and condos and I know the ins and outs of the process. Call me at 386-566-7503 or 888-519-9579 to learn more.
Quick quiz: For local businesses, do people search more on the internet or in the Yellow Pages?
For the first time ever, in 2008, more people are searching on the internet. It’s close at 31% for the internet versus 30% for the Yellow Pages, but internet searches are increasing while Yellow Page searches are dropping.
More interesting is that newspaper and magazines account for only 3% of local searches.
Why are You Telling Me This?
I’m telling you this because if your home or condo is not included in internet searches, then you are missing the biggest marketplace in the world. The National Association of Realtor estimates that over 75% of all home and condo searches begin on the internet. If you are not on the internet with your property, you are limiting yourself to 25% of potential buyers.
Our Daytona Beach Real Estate Internet Marketing Plan
To take advantage of the power of the internet here’s what you get when you list your home or condo with us:
Listing in the Daytona Beach MLS
Listing on our website www.lynnbyrne.com with over 100 visitors every day who are specifically interested in Daytona Beach Homes. We show you property with pictures and video.
Featured listing at www.realtor.com which is the official listing site for the National Association of Realtors
Video Listings on Yahoo!, AOL, YouTube, Google Video and up to 30 other video sites.
Blog articles to announce your listing on at least 3 blogs
Now that’s exposure to the 75% of the market. In addition, people from all over country and the world get to see your home or condo listed.
If your home is priced to sell, it can sell in this market, but you need exposure where buyers are searching. Give me a call at 386-566-7503 or 888-519-9579 to discuss your next steps.
Fed to Buy Mortgages and Mortgage Backed Securities
I’ve spoke many times on these pages and at www.lynnbyrne.com the until mortgage money is freed, real estate sales in general and our Daytona Beach real estate sales will be in trouble. Well the Federal Reserve is buying about $600 billion in loans and repackaged loans in an attempt to free money for lending.
This is a move to get the junk off the balance sheets of banks and mortgage lenders. Unfortunately, the junk ends up on the federal governments balance sheet - translation is that you and me pay. Fox News just estimated that the total cost of the bailouts to date is about $24,000 per man, woman and child in the US. That’s a lot of money.
I’m not sure that this is going to work. As long as the federal government keeps giving money to these lenders, what incentive do they have to actually loan money? It’s like paying them to do nothing. Here’s an alternative - the President calls in the heads of all the federally chartered banks and S&L’s and tells them to loan money or their charters will be pulled. Just a bit of incentive.
In spite of this little rant, the move will probably contribute to moving the process along. It will mean that money will be made available sooner than if it didn’t happen. I don’t expect to see an affect until early next year for Daytona Beach homes. It would be ideal if mortgage money were available when the “normal” buying season begins in February.
A word of caution. When sales do pick up again, most of the sales will be short sales and foreclosures. Until that inventory is cleared, non-distressed properties will not sell unless priced to compete with the distressed properties. For more on how you can take advantage of short sales, check out how Short Sales Can Save You 20 to 40%.
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