September 2009 Sales of Daytona Beach Homes Up 58.7%

Sales of Daytona Beach Homes Up 58.7%

Sales of Daytona Beach homes and condos in September were up 58.7% over last September. Needless to say that’s is a huge increase.

Sales under $200,000 accounted for 72.4% of all sales and sales under $300,000 accounted of 88.6%. No homes were sold over $1,000,000. The 370 homes and condos sold in September fell just short of July’s sales of 375 properties that was the highest in over three years.

Month to month, September sales were 10.4% higher than the 335 sales recorded in August.

What Do The Sales Numbers Say?

The numbers tell us one simple thing about the Daytona Beach real estate market – more people believe that homes and condos are at price right. The numbers don’t tell us anything about reaching a price bottom or whether prices will go up or down. It was recently reported in USA Today that people are finding bargains in the Daytona Beach area and that’s true. It’s hard to believe some of the deals we’re seeing.

Is Now The Right Time to Buy?

Buying or investing in a home is a decision that only you can make. There are no guarantees, but patient buyers will find great deals. Foreclosures and short sales are keeping prices down, but eventually that will runs its course and pressure will begin to mount for prices to rise again. If you are ready to explore the market and discuss options, give me a call at 386-566-7503.

Reported sales are from the Daytona Beach MLS.

July 2009 Daytona Beach Home Sales Best in Years

Daytona Beach Homes Sales Up 25.2% in July

377 Daytona Beach Homes and Condos were sold through the Daytona Beach MLS in July 2009. That’s 76 more than last July and the highest sales level since June 2006 when 401 properties sold.

What July Home Sales in Daytona Beach Tell Us

Simply – higher sales tell us that more people believe that housing in the Daytona Beach area is priced right. It doesn’t mean that home prices have stopped declining, it means that more people believe that they are near bottom. A lot people are on the sidelines speculating what’s going to happen with prices. These folks are voting with their wallets.

I’m very busy and I’m selling properties. It’s interesting to note the difference between buyers now and in June 2006. That was just at the end of the bubble. At the height of the bubble, buyers were in a frenzy – concerned that if they didn’t buy now, they would lose out.

Buyers now are different. They are generally very savvy and conservative. They are selective. They can afford to be. There are over 5500 homes and condos on the Daytona Beach market through the MLS. They also have the means to buy a home – cash or a financial position to get a mortgage. There is no frenzy – it’s measured, intelligent buying and investing.

What’s Selling?

Sales by price are following the same pattern we’ve seen for almost two years now.

Under $100,000 = 119 (31.6%)

$100,000-$200,000 = 164 (43.5%)

$200,000-$300,000 = 57 (15.1%)

$300,000-$500,000 = 30 (8%)

Above $500,000 = 7 (1.9%)

Sales below $200,000 dominate the market. What can you get for under $200,000. The choices are tremendous. Condos, Homes, Duplexes, Beachside, Mainland, Gated Communites, Golf Course Communities and more. You can go here to search Daytona Beach homes and condos and see what’s available. Better yet, call me at 386-566-7503 and I run a customized search based on your criteria. I have a knack for finding people just what they’re looking for.

To get a quick read on Daytona Beach homes for the first half of the year, check out First Half 2009 Daytona Beach Home Sales Up.

April Daytona Beach Home Sales Highest Since July 2006

April 2009 Daytona Beach Homes Sales

It was the end of the real estate bubble in Daytona Beach. 343 Homes and condos were sold in July 2006. August and September of that year saw sales of 306 properties. Since then, Daytona Beach real estate sales have been above 300 only once – in August of last year.

Homes sales recorded in the Daytona Beach MLS for April were 308 condos and homes. The highest since the bubble burst in July of 2006. And these are preliminary numbers taken late tonight. We may see that number rise a bit more when all sales have been recorded.

April is the beginning of the Summer sales season. Last year in April, 278 properties were sold. As we sit now, we’re 10.8% highers than last April and 6.6% higher than last month. For the year, sales are 19.5% higher than last year.

We will be issuing a full Daytona Beach real estate monthly report for April during the next week. We will also issue a full report on sales of Daytona Beach Condos.

The Daytona Beach MLS includes Daytona, Ormond Beach, Ponce Inlet, Port Orange, Holly Hill, South Daytona, Daytona Beach Shores and Ormond by the Sea real estate.

March 2009 Daytona Beach Real Estate Up 31.5%

Daytona Beach Real Estate Sales March 2009

Preliminary Report

Daytona Beach real estate sales were up 31.5% in March 2009 over March of the previous year. Preliminary numbers show Daytona Beach MLS sales at 288 homes and condos vs. 219 properties sold last year.

Trends Remain the Same

Sales by price did not change from previous months:

  • Under $100,000 – 33.3% (96)
  • $100,000 to $200,000 – 42.4% (122)
  • $200,000 to $300,000 – 14.6% (42)
  • Over $300,000 – 9.7% (28)

These are preliminary numbers, but they won’t change signficantly. The average home price sold was $159,815 and the median price was $133,500. In February we saw average sold price of $166,845 and a median price of $127,500. Median means one-half of properties sold under the median and one-half above.

Year to Date Sales Up 23%

Sales of Daytona Beach homes and condos are up year to date over 2008 by 140 properties or 23%. Year to date 748 homes and condos sold vs. 608 for the same period last year.

This is all positive news for the Daytona Beach market. Months of inventory has decreased to just over 19 months. At the end of December, we were at 25 months. That’s a significant drop, but still far away from a stable market.

Interest rates are low, there’s an $8,000 tax credit for first time home buyers, and prices have dropped. How long interest rates and prices will remain low is uncertain, and the tax credit expires on December 1. There are even Ormond Beach Condos for sale under $100,000. It looks like we are in window of great opportunity that we may not see again for a long time. If you are interested in homes in our area, call me at 386-566-7503 to discuss your options.

Daytona Beach Area New Home Permits Down 20% for 2008

Volusia County/Daytona Beach New Homes – Permits Down 20% for 2008

The Daytona Beach real estate market has been in a slump for about 2-1/2 years. The latest news is that building permits are down from 5138 in 2006 and 3750 in 2007 to 2983 in 2008. That’s a drop of 20.5% over 2007 and a whopping 41.9% over 2006.

These are the building permits reported for the Daytona Beach, Ormond Beach, Deltona statistical area that includes Deltona, Port Orange and the remainder of Volusia County.

This is really bad news for builders and developers and those who work in the trade, and for buyers it means that selection and availability of new homes will continue to decrease. By not building, builders are lowering inventories and waiting for prices to rise before building. Further, they will want to see definite demand before they will risk building again.


The reasons for the drop could be many, but we see it simply as follows:

Builders can’t afford to build homes with current prices.

Most current sales are foreclosures, short sales, and distressed properties. These homes are being sold for less than a builder could build a new home. The builder must pay impact fees and build to current code. These add significant costs to a new home versus a home built before 2000.

Many builders have not sold their existing inventory that were built at even higher costs. They are not going to build more.

Florida New Home Building Will Stay Down for Years

Florida new home building will remain depressed for a number of years. Our estimate is that it will be 2011-2013 before we see a significant rise in building. We hope we’re wrong, but with over 5600 homes on the market in Daytona Beach and up to 11 million more foreclosures possible nationwide between now and 2011, we can’t see building picking up until these foreclosures have worked through the system.

Prices and demand will rise again, but we doubt we’ll see double digit annual price appreciation for a long time. The trick for everyone, including the builders, is to know when we’ve hit the bottom of the market. We now believe that will be late this year or early next year.

Delaying Closing on Your Home Purchase Could Save You $15,000

Proposed $15,000 Home Buying Tax Credit

Update 2/15/09: This proposed tax credit was removed from the final version of the so-called “stimulus bill” that was passed by our congressional representatives on Friday.

If you haven’t heard, Senator Johnny Isakson from Georgia, added a provision to the monstrous new stimulus bill that would give buyers of a primary residence, a $15,000 federal income tax credit. If passed, the provision would begin on the date of enactment of the law and would be effective for one year. If you are closing on a home or condo that will be your primary residence, I urge you to wait until we see if this bill passes. $15,000 is real money where I come from.

Daytona Beach Home Buyers

How would this law affect buyers of Daytona Beach homes and home sales in our area?

  1. This provision is for your primary residence and does not include second homes, vacation homes or investment properties.
  2. You need to pay $15,000 in federal income taxes to realize the full tax benefit. The government is not going to give you money that you did not pay in.
  3. The provision is $15,000 or 10% of the purchase price, whichever is less.
  4. You must not sell the home for two years, or you will need to repay that tax credit

The press release from Senator Isakson’s office states that credit could be applied to your 2008 taxes, if you purchase after the law is enacted. No, if you bought your house last month, or before the bill becomes law, you are not eligible for the credit. That’s why I’m advising that you wait.

Daytona Beach Homes Sales

The affect on sales could be very positive, but we need to consider that:

  • Many Daytona Beach area homes and condos are being purchased as second homes or investment homes and are not eligible
  • The tax credit does not help people get mortgage financing, that is still a huge issue
  • Many people will not act because they are still afraid of falling prices

Still, the overall effect of a stimulus such as the tax credit should be very positive. It certainly won’t hurt. It makes purchasing a home more attractive for those who can benefit from the credit. Senator Isakson says that a similar credit that was available during a similar crisis in the 70s, had a positive effect on stabilizing prices and home sales.

Advice for Now

If you are closing on your primary residence in the next few weeks, delay the closing if you are eligible for the tax credit.  It could be worth up to $15,000 in your pocket. The stimulus bill should pass this week or next week and we will know by then if this credit survived.

Click here to read ==> Senator Isakson’s Tax Credit Press Release.

Mercedes Homes Declares Chapter 11 Bankruptcy

Florida Buider Mercedes Homes Bankruptcy May Affect Warranties

Mercedes Homes has built a lot of Daytona Beach homes over the past decade. Now they’ve filed for bankruptcy, and depending on how a bankruptcy judge rules, current warranties may be voided. That would put quite a few people in a bind.

The company is stressing that warranties on homes that close after the filing will not be affected, but that’s only if the company survives.

Mercedes is based in Melbourne and filed for Chapter 11 Bankrupcy protection in West Palm Beach at the US District Bankruptcy Court. Thousands of creditors are involved with the largest being Fifth Third Bank that is owed over $7 million.

A home builder in financial trouble is no big surprise. New home starts are at record lows and sales are still very low. Many have filed for bankruptcy or gone out of business. Most will be back in some form when the housing recovery is complete some years out.

The housing market for Daytona Beach and Ormond Beach homes will recover over the coming years, and Mercedes may be able to struggle long enough to make it in the end. Some would say that they should have been in a better position and put money aside for the bad times, but I don’t think anyone planned for a drop in sales of 60-70%, I know I didn’t. Take a look at the sales graph for this decade from my post Daytona Beach Real Estate Annual Sales 2000-2008 to see how dramatic the drop was.

Everyone who service the Daytona Beach real estate market is struggling. Many have left the business and more probably will again this year. I’m not leaving the market and I have plans to grow my business this year just like I did last year. Yes, it’s more hours and more work, but I will be here to the end.

Daytona Beach Homes – Annual Sales 2000 to 2008

Daytona Beach Real Estate Annual Sales 2000 to 2008

Total sales of Daytona Beach homes and condos from the Daytona Beach MLS were 2900 in 2008. It will come as no surprise that this is the lowest sales level this decade. It was not a great year for home and condo sales. Inventories at the end of the year were just over 5600 properties and many were taken off the market over the course of the year.

We hear a lot of talk about how far sales have fallen. I believe it’s important to put it into perspective. So here goes:

  • 2008 sales were 4.8% lower than 2007 sales
  • 2008 sales were 23.9% lower than 2006 sales
  • 2008 sales were 52.8% lower than the peak year of 2005 sales

Looking at the chart below, we can see that the big drop happened from 2005 to 2007 and 2008 was a year where we basically held 2007 levels.  Considering market conditions and the state of the economy that’s pretty amazing.

Daytona Beach Real Estate Sales Chart 2000-2008

I’m not attempting to candy-coat the current conditions. We are in a horrible market for sellers and a great market for buyers willing to accept some risk. Prices dropped in 2008 by over 30%, but sales stayed relatively stable. On an annual basis, we seem to have found a bottom. 2009 will likely test that bottom, but if we see some economic recovery, there is a lot of pent-up demand for homes and condos in Daytona Beach.

The full sales numbers for 2000 to 2008 are presented below. I believe this gives an idea of where the market might recover to in the long run. After the dust settles, I believe we will sell between 3600 and 4000 homes annually. That’s a 10-20% increase of 2008 levels. I see that as normal growth as the economy recovers. I don’t see a return to the speculation fueled number of 6000+ during the boom. We may see a mini-boom in 2009 or 2010, but only if mortgage lenders are willing to work with borrowers on mortgage modification. Otherwise, there’s about five to eight million more homes in risk of foreclosure between now and 2011. Part of the second release of the $700 billion in bailout funds is $50 to $100 billion to help homeowners. We’ll see how that works. At any rate, 2009 should be an interesting year.

Year Home Sales
2000 3671
2001 4035
2002 4739
2003 5610
2004 5986
2005 6145
2006 3813
2007 3947
2008 2900

5 Ground Rules for Daytona Beach Home Buying Success in 2009

5 Ground Rules for Home Buying Success in 2009

There’s a new game. It’s called predict the bottom of the Daytona Beach real estate market. Many are playing, but only a few will get it right on the button. The question is how close do you need to be.

First, you must understand one thing about our market that is very important. Prices in the Daytona Beach Homes and condos market are being determined by distressed properties. Foreclosures and pre-foreclosures are driving prices. When you hear or read about prices dropping 30%, it is this type of home that’s available at those prices. Two things are certain about the supply of distressed properties, there are plenty of them right now and the supply will not last forever.

Second, interest rates are at historical lows. As of this morning, the average 30 year fixed rate mortage was at 5.08%. This is wonderful, but probably very short-lived. We believe interest rates will rise, but right now they are a tremendous bargain.

So, we have two factors that together present what people have been calling a once in a lifetime opportunity. Incredibly low prices coupled with incredibly low interest rates. So, what’s the problem? There are two:

  1. Confidence in the economy
  2. Fear of prices dropping further

There are two certainties, the economy will improve and prices will rise again. The question is when?

So we’re back to the game of predict the bottom. The great thing is that you don’t need to be right on in this game. Close is good enough.

Let’s acknowledge that if you buy a home right now that there’s a risk that it will drop in price, but, let’s also acknowledge that there’s a risk that interest rates will rise. We published the following number a while ago:

$200,000 mortgage at 5.14% = $1,090.82 monthly payments
$180,000 mortgage at 6.5% =$1,137.72 monthly payments

Do you see the significance of low interest rates. If you finance your purchase, rising interest rates may be more important to you than the risk of falling prices. Rates were at 6.5% a very short time ago, so it’s possible they will climb back up to that level or higher.

With the background part complete, let’s look at our five ground rules for buying a home in 2009:

1 – Don’t buy for short term profit

A minimum of 5 to 7 years will be needed to realize a reasonable profit. If you consider that window, you are probably safe from price drops over that period of time.

2 – Buy a Good Property in a Good Neighborhood / Community

Buy in an attractive desirable neighborhood or condominium. Prices in desirable neighborhoods will most likely rise before other areas and at a better rate. Don’t buy because it’s cheap, buy because it’s a really good home or condo and it’s cheap.

3 – Get your financing in order before you buy

It’s still very important to be pre-qualified before looking at properties. For short sales and foreclosures, banks and lenders will expect you to be qualified or to pay cash. Do it before you start looking at properties so you are ready when it’s time to make an offer.

4 – Make the Offer Contingent on an Inspection

Short sales and foreclosures will be sold “As-Is,” but, still make your offer contingent on an inspection. This is insurance against major hidden problems with homes that may have been damaged or poorly maintained. After the inspection, you can decide if you want to go through with the purchase.

5 – Patience

Lenders have been very slow to respond to offers. This process will not be like any you’ve experienced in the past. It will take time and if you’re not prepared, you may become very frustrated and upset. Know upfront, that can be a slow process, but very rewarding when successful.

I’m working with buyers right now who are buying to and rent out the homes, and, buyers who are moving from out of state because homes and condos prices in the Daytona Beach area are so low. People who couldn’t afford to retire here a few short years ago, can now afford it. I’m amazed at how much home you can buy for the dollar right now.

You need to decide if now’s the time. There’s risk, but there’s also opportunity. It’s up to you. I’ll be glad to answer any questions you have. Give me a call at 386-566-7503.

Good Signs for Daytona Beach Real Estate?

Daytona Beach Real Estate Sales Up, Inventory Down

Sales are up over 10%, inventories are down over 5% and things are really looking up. Not really, but these are two good signs, here’s why:

Daytona Beach Real Estate Sales Up

December Daytona Beach condos and home sales were up over 10% in December over November. This is significant because it break a four month slide in properties sold. We are still 25% below the highest sales of the year in July, but at least the slide is broken for one month.

Daytona Beach MLS Inventory Down

For nine months we sat at about 6,000 residential homes and condos in the MLS. At the beginning of January 2009, we were at 5,656 properties in inventory. This is a better than 5% drop and is the first real movement down since March 2007.

When we take the rise in sales and the drop in inventory, homes and condos on the market in months dropped from 29.5 to 25.3 months. We still need to drop a long way before we exit this super buyer’s market, but this type of improvement may help cushion falling prices a bit.

On the personal front, inquiries from buyers have boomed over the past two weeks and I’m showing property every day, sometimes all day. I’ve showed Ormond Beach Homes and Port Orange homes all weekend. This is a strong sign and the most activity that I’ve seen in 2-1/2 years. These are serious buyers, so I’m hopeful it’s an indication that the overall market will improve. I don’t expect anything close to a boom, but rather a gradual improvement.

So, there are some good signs in the sea of bad news. Let’s keep our fingers crossed that we see more.