Daytona Florida Real Estate Market Report June 2008

Daytona Beach Property Sales Down 9.7% for June 2008

Daytona Beach real estate sales lost some ground in June, dropping to 259 residential homes and condos sold and falling 9.7% against May sales of 286 properties. This bucks the recent trend of two months of good sales increases, but is not as bad as it appeared earlier this month.

On June 23rd, we were 28.7% behind the May pace, so there was a significant increase at the end of the month. Of the 259 homes sold, 106 where sold between June 23rd and the end of the month. It will be interesting to see what happens in July.

We are still up over January. Here’s a chart showing home and condo sales this year:

Month

Sale

Month +/-

Year +/-

January

164

February

222

35.4%

35.4%

March

218

-1.8%

32.9%

April

277

27.1%

68.9%

May

287

3.6%

75%

June

259

-9.8%%

56.7%

Total

1427

The chart shows that sales are up 56.7% over the first month of the year. So we will continue to watch. 210 houses were sold and 49 were condos were sold. In May, 242 houses were sold. The entire drop in sales in June was from the house sector. Condo sales were up slightly by 5 units over June.

Residential Daytona Beach property for sale dropped below 6000 units for the first time this year, standing at 5997 this morning. We will probably end the day at over 6,000, but at least we were below 6,000 for part of a day. That’s down from the end of April when 6219 properties were in the market. The Daytona MLS, from which these numbers were taken, includes properties in Ormond Beach, Port Orange, Ponce Inlet, Holly Hill, South Daytona, Ormond by the Sea and Wilbur by the Sea.

The market is still strongest in the under $200,000 price range at 58.7%, with 44% of sales in the $100,000 to $199,999 price range. $200,000-$299,999 price range is down from 24.9% in May to 20.1% in June. The over $300,000 market in total increased as a percentage from 15% to 21.3%. The under $300,000 market still represents 78.3% of sale.

Price Range

Number Sold

Percentage of Total

Last Month

Less than $100,000

37

14.3%

8.8%

$100,000 – $199,999

135

44.4%

50.9%

$200,000 – $299,999

52

20.1%

24.9%

$300,000 – $399,999

32

12.4%

7.7%

$400,000 – $999,999

20

7.7%

6.3%

Overs $1,000,000

3

1.2%

1.4%

The median sales price was the same for June as May at $175,000. However, the average price decreased from $228,830 to $217,469. The average price varies month to month but we can clearly see a downward trend in average sales price. The average was skewed in June from a higher number of sales in the under $100,000 price range with 37 sale in June versus 25 in May.  What we conclude from these numbers is that above the $300,000 price point, buyers and sellers are still having trouble reaching agreement on value. Sales are still being supported by lower price home sales with weakness in the higher price ranges.

The best way to look at all this is to check out the chart at Daytona Beach Real Estate Market Analysis. The chart shows the past 18 months of sales and average home prices. In this case, we believe a picture is worth thousands of words.

Total inventory numbers went up from 21 months to 23 months because of the drop in sales. Inventory for homes in the under $200,000 range increased from 14 months to 15.8 months. One month’s change is not significant. At the beginning of the year, we were at 44 months of inventory, so at 23 months we are still about half of the number.

What’s the affect for Daytona Beach Homes for Sale?

First, this is a less than 10% drop after two months of solid increases. 604 properties were sold in the 1st quarter, but, 823 properties were sold in the 2nd quarter. That’s a healthy increase of over 36%. This is definitely a good sign, but still not strong enough to give most people the confidence they need for a full recovery. That will come, but when is still the biggest question. Second, there are still extremely high levels of inventory on the market. With 259 sales and 5998 residential properties on the market, we stand at at over 23 months of inventory, up from 21 months at the end of May. A buyer’s market is loosely defined at six months of inventory. It’s better, but still not good.

Action to Take Now

Daytona Beach Homes for Sale are influenced more by confidence in the future rather than historical numbers, but the historical numbers are needed for comparison. People are very concerned about dropping home values and there has been no clear signal that prices have stabilized. We believe until that happens, home sales will remained depressed. The situation is made worse still because mortgage money is tight. The lending institutions are still cleaning up their internal messes brought on by the excesses of speculation and easy money. In the middle of these problems food and gas prices have exploded.

Based on all these factors, it is pretty amazing that sales are as high as they are. We believe the fundamentals of the Daytona Beach market are strong. The speculative run-up required an adjustment and we are still working through that adjustment. Long-term, we will be OK. Short-term we’re all waiting for positive signals.

If you are a buyer planning to make a purchase in the near future, there are a few things to monitor:

1. Sales Numbers – if sales number continue to climb, prices will bottom and eventually start to rise. Sales number are on a uptick, but nothing drastic over the past two months.

2. Mortgage Rates – be careful of mortgage rates moving up due to inflation and eventual increased lending. Rate are up about .4% since the beginning of May.

3. Inventory Levels – if inventory numbers drop drastically, supply will tighten and price will adjust. Inventory numbers are dropping slowly.

Where can you get this information? On my Daytona Beach Real Estate main site. In addition to these monthly reports on the blog, we publish weekly sales numbers, mortgage rates and inventory levels. You can see the current weekly Market Report updated every Monday.

We issue the Daytona Beach Real Estate Market Report every month based on sales numbers that we see and key economic trends. We make no guarantees, but provide this information for your use. It should be useful if you are considering selling or buying a home in our area. Please call me at 386-566-7503 if you have any questions. We just updated our long-term real estate market analysis at Daytona Beach Real Estate Market Analysis at my main web site. It’s worth a look.

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