Daytona Beach Real Estate Sales and Market Report August 2008

Daytona Beach Property Sales Down Slightly for August 2008

In July, Daytona Beach real estate posted the highest sales level since September 2006. In August, we dropped slightly, but still ended with a good month. 277 homes and condos were sold in the Daytona Beach MLS during August, down from 299 properties in July, or 7.4%. From the low point of the year, in January, sales are up 68.9%.

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%

July

299

15.4%

82.3%

August

277

-7.4%

68.9%

Total

1730

The solid sales levels in August are a good sign. We have reached a new level that you can see in the chart below. We are banding between 250 and 299 property sales per month. We reached that level in April and have held it since. We will look to this chart monthly. We believe that any significant breakouts from these bands will signal a market change.

2008 Daytona Beach Real Estate Sales Chart

Median prices continue to swing wildly, with August median prices at $164,000, down from $185,000 in July. As you’ll see when we look at sales for different price ranges, there is a very good explanation for this drop.

Residential Daytona Beach property for sale inventory stood at 5906 units at the end of the month. This puts us at back over 20 months of inventory at 21.3 months. Inventory numbers have held at around 6,000 properties for some time now.

The market is still strongest in the under $200,000 price range at 64.9% of sales, with 45.8% in the $100,000 to $199,999 price range. Homes sold under $300,000 account for 81% of all sales. The higher price ranges are not selling at the same pace and are dragging the inventory in months figures down. Under $200,000 months of inventory is under 15 months.

Price Range

Number Sold

Percentage of Total

Last Month

Less than $100,000

53

19.1%

14.3

$100,000 – $199,999

127

45.8%

41.5%

$200,000 – $299,999

46

16.6%

25.8%

$300,000 – $399,999

25

9.0%

7.8%

$400,000 – $999,999

24

8.7

8.7%

Overs $1,000,000

2

<1.0%

1.7%

The average price dropped from $239,454 in July to $217,454 in August. The average price varies month to month and is down this month, but was influenced by only two sales over $1,000,000 and a drop in homes sold in the $200,000 to $300,000 range from 25.8% of sales to 16.6% of sales. This drop is what pushed the median price and average price down for the month. The median means that 1/2 of the homes sold below $164,000 and 1/2 sold above that point. All of the drop in sales for the month can be attributed to the drop in sale in the $200K-$300K price range from 77 properties to 46 properties, or 29 fewer. Total sales dropped only 22 properties, so there it is.

What does this mean? One month doesn’t tell the full story. It will take a few months to know if this is a market shift or a one month fluke. Home sales priced above $300,000 held steady and below $200,000 jumped from 168 to 180 properties, up to 64.9% of all homes and condos sold.

Above the $300,000 price point, buyers and sellers are still having trouble reaching agreement on value. Even with the lower sales between $200,000 and $300,000, homes above the $300,000 represent only 18.5% of sales. In July it was 18.2%. 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 Daytona Beach Real Estate Sales Chart. The chart shows the past 20 months of sales and average home prices. In this case, we believe a picture is worth thousands of words.

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

With sales banding between 250 and 300 properties per month, we need to pay attention to any shifts away from those bands, either up or down. We are approaching the sales levels we saw before the speculators moved into the market. We still have high inventory levels that will take a long time to sell, but we are at the lowest levels of the year and we’ve seen a 15% drop in inventory. It’s still a buyer’s market, but we believe the window is beginning to close. It will still take some time, but the tide may be turning.

Action to Take Now

Sales of Daytona Beach homes are influenced by a lot of complicated factors, but we with another month of relatively solid sales shows that the market is fundamentally strong. Our prices are still lower than many areas in Florida, especially for beachside communities. People are still concerned about dropping home prices but more buyers are entering the market and making offers. Many of these offers are very low and not being accepted, but there is a lot of activity in the market. There’s still a lot of uncertainly, but more people are taking advantage of the market and buying.

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 go above 300, we believe that will signal a return to a more normal market and stable prices.

2. Mortgage Rates – mortgage rates are up since May, but have dropped for the past few weeks. Check out our weekly market report for weekly updates on mortgage rates.

3. Inventory Levels – inventory levels are holding steady.

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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