Have Daytona Beach Real Estate Prices Hit Bottom?

Have Daytona Beach Home and Condo Prices Seen the Bottom?

I’ve been looking at the Case-Shiller home price data today and the data seems to be showing that the two Florida areas included in the index are at or near bottom. The index includes Miami and Tampa metro areas. There is no specific listing for Daytona Beach home sales, but I think we are pretty much in line with Miami since we are on the east coast while Tampa sits on the west coast.

During the past twelve months, prices in Miami are up 1.8% while prices in Tampa are down 2.0%. If we average them, we’re pretty much flat. That’s a pretty good indication of where we are in Daytona Beach, Ormond Beach, Port Orange and the surrounding areas.

The Pundits Speak

The National Association of Realtors Chief Economist, Dr. Lawrence Yun, and Zillow chief economist Dr. Stan Humphries, have spoken recently on the market. While they’re not in complete agreement, their message is that home prices will bottom or rise slighly in 2012.

Dr. Yun says, “The housing market has clearly turned the corner… Rising sales are bringing down inventory and creating much more balanced conditions around the county, which means home prices will be rising in more areas as the year progresses.”

Dr. Humphries said recently, “For people who have been waiting to time their home purchase close to market bottom, it’s time to start shopping… When the bottom will hit will vary by market, and it’s nearly impossible to time a purchase exactly right. But home prices are not the only part of the equation. Buyers also should take into account the possibility that rising mortgage rates could offset any further home value declines that may occur.”

You may be thinking there’s some conflict of interest with these organization predicting a bottoming of prices, but I think it’s important to note that they haven’t made predictions of this sort previously. They are very careful because their predictions will be well publicized and they’ll lose credibility. They err on the side of caution. So when these two chief economists speak and agree, it’s a pretty big deal.

What Now For The Daytona Beach Real Estate Market?

As Dr. Humphries says above, no one can predict the exact bottom. Further, just because we’ve hit bottom doesn’t mean prices are going to leap upward. From the Miami Case-Shiller data, we see that the area hit bottom about six months ago, but there hasn’t been a big jump in prices since then.

Buyers of Daytona Beach homes and Daytona Beach condos who have been on the fence about prices, may want to start looking now. We believe there are plenty of bargains out there and there will be for the short term. Remember all price data reflects averages. Some buyers will get much better deals than others. That’s where we can help. We know the market and what’s selling and can help you get the best price for a property. We also are still working a lot of short sales and that’s where many of the best bargains can be found.

Please give Lynn a call at 386-566-7503 to discuss your options. Check here to –> search all homes and condos for sale in the Daytona Beach area.

2001 Prices for Daytona Beach Homes and Condos?

Is it 2001 or 2008 for Daytona Beach Home Prices

OK, this post needs to be written. 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.

Hey, that’s a challenge, if you have paid 2001 prices for a home or condo in Daytona Beach, let me know. You can post a comment or send me a note and I’ll publish it. Give me enough information so it can be verified (address will work).

Zillow.com just published information that says, median prices in Daytona Beach, Deltona and Ormond Beach (and everywhere in between) have fallen to same level as the 3rd quarter of 2004. That may not seem like it’s too far from 2001, but in percentage terms, we would need to have dropped close to 70% from the peak to get back to 2001. That hasn’t happened. According to Zillow, we’ve dropped less than 28.4%.

Please note and remember that these numbers are estimates. They are the best attempt to come up with meaningful information from a bunch of data that doesn’t lend itself well to the task.

Even so, let’s work with Zillows data. Do you really believe that prices will fall 70% from the peak? If you bought your home in 2003 how would you have fared? Pretty well, for the Daytona Beach area real estate. Even after the drop, you will still have an average return of 5.0% annually. That’s a higher than inflation, but not really that high. If you bought 10 years ago, it’s much higher.

That’s an important number for me. When we are at 5% annually, we are getting close to the no growth inflation rate of return for Daytona Beach condos and homes. Can we drop further? Of course, but at some point we are going to reach a fundamental bottom. When that happens, I believe there will a bounce back up. Not double digit, but above the inflation rate.

If you are a short term investor, good luck. If you are a long term investor or buying your own home, you really need to be looking for those properties now. Our local market has shown volatility going up and coming down. I believe that volatility will return in the form of appreciation better than the national average – when the market stabilizes.

I’m not going to say we are at the bottom, but every day we are closer. Call me to discuss how you can purchase Daytona Beach property that will position you for the best future appreciation.

Merrill Lynch Housing Forecast – Prophets or Fools

Blindfolded Forecaster

Merrill Lynch Housing Forecast – Prophets or Fools

Merrill Lynch, the large financial firm whose previous predictions resulted in a $7.9 billion loss in their third quarter of 2007, has released a new forecast. Merrill Lynch is forecasting a 25-30% drop in national housing prices in the next few years.

I’m forced to wonder about Merrill’s reasons for issuing such a forecast. [Read more…]

Daytona Beach Home Prices over the Last Five Years

Daytona Beach Home Prices over the Last Five Years

The most recent data shows that the average home prices in Daytona Beach in January 2008 is about $165,000 down from about $179,000 in January of 2007. The drop has flattened with a rise since November when we were below $164,000. While I won’t venture to predict whether prices will drop further, I can say that over the past month, we’ve seen a small rise in sales prices.

Over the year, there has been a significant drop, but when we look over five years we see a much better picture. Going back to 2003 the average home price was under $90,000. That means over five years, prices are up over 80%. The question that we can’t answer yet is whether prices are dropping back to levels before speculators went wild. At the end of the bubble, speculators were buying from speculators and driving prices up. When the speculation stopped, prices dropped.

Where do we go from here? We are closer to the bottom and recent number show we may be close. Here’s my best view at this point – prices peaked in early 2006. Since that time, we lost about 12% of market value. During the worst of all possible news and events, we’ve dropped only 12%. This may sound crazy, but considering everything that has happened, a drop of “only” 12% may signal a pretty strong long-term market.

Check back for frequent updates on Daytona Beach real estate market conditions.