Living on the beach in Florida is great. It’s a pleasure to get up in the morning and take a walk on the beach, or enjoy your first cup of coffee watching the waves breaking and birds and people. Sunset walks are my favorite. It always seems brighter and more relaxed on the beach.

We’ve lived both on the beach at 3072 Oceanshore north of Ormond Beach and in the Sherwin Condos in Daytona Beach Shores. We enjoyed both, but I must say that it was much easier living in the condo.

Daytona Beach Oceanfront Home Maintenance

The biggest problem with the home on the beach is maintenance caused by salt air and sea spray. Nearly every morning the cars are covered in a thin film of salt moisture and the windows facing the beach very quickly film over from salt spray. So, my first piece of advice is to park the car in the garage, and to have a good window cleaner on call. Also, be sure to look at all the hardware and fittings on the outside of the home. The salt air will corrode the wrong materials fast - really fast. There is specific hardware and fittings required for oceanfront properties. Make sure the right material is installed before you buy.

Sand will get everywhere in Daytona Beach oceanfront homes. I don’t know how, but it will get everywhere. Whether you open windows and doors or not, you will find sand in unusual places.

Daytona Condominium Maintenance

Condos are much easier, especially on the higher floors. We were on the 16th floor, but we continuously battled sand from the beach in the tracks of the sliding doors and in the carpet. We cleaned those tracks every week. We also had the salt film issues on the doors and windows, but not as bad and they were easier to clean.

Many Daytona Beach condos are right on the beach. Cars should be parked under cover, or plan regular trips to the car wash. The maintenance fees will cover a lot of the maintenance but make sure to find our exactly what’s included. For instance, do you or the condo association pay to have your balcony rails painted. Also, your air conditioner on the roof is usually your responsibility. So, plan for regular maintenance, cleaning and scraping of those units.

Because of hurricane and their flooding threats, homeowners insurance for Daytona Beach oceanfront homes and Condos on the beach is more expensive on the beachside than on the mainland. The cost can be almost double for the same type of home in different locations just a mile or so apart.

Living on the beach is great, but you need to go in with your eyes wide open. Maintenance costs will be higher than on the mainland, so plan accordingly.

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After two months of significant gains, it looks like sales of Daytona Beach Homes will fall in June. At this point, we are 28.3% behind the May pace. What does this mean?

Well first, when sales increased 27% in April, we were cautious about saying that the market has turned around. Second, trends almost always take a sawtooth pattern, not a straight line.

Now, the truth is that we really don’t know what is going to happen next. I have several properties under contract that will close next month and agents in my company also have several contracts ready to close next month. I am working with more people to find properties than in the past two years. I can tell you that activity is up and my sales are up, but that’s one agents story.

Daytona Beach Florida Home Inventory Numbers

Daytona Beach residential real estate inventory numbers (6158) are holding steady, but they are still very high. We have not turned the corner just yet and we expect that we will see an up and down ride for the rest of the year.

Mortgage Rates

Interest rates this week held steady and dropped very slightly. We are still concerned about inflation pushing home mortgage rates up. It’s very important that you check mortgage rates regularly if you are going to finance a house or condo purchase. Mortgage rate increases can lead to significantly higher monthly payments, or less house.

Condos for sale in Daytona Beach have not been selling at their historic rate. We expect that that rate will return and some point and that will give a boost to overall sales.

A more detailed Daytona Bearch Florida Real Estate Weekly Report is available. We will be providing our monthly Daytona Beach Real Estate analysis for June in the middle of next week, after all the sales number are in.

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I’ve just posted a new article, Should I Buy That Daytona Beach Home Now or Wait?, on my main Daytona Beach Real Estate Information website that looks at the two most important factors to buying a home:

Home Price StabilityMortgage Rates

If you’ve seen some of our recent posts, you know that we are as concerned about interest rates on home loans as we are price stability. There is just so much inflationary pressure in this economy that we see long term interest rates increasing to provide a hedge against that inflation.

We also talk about the two major decisions you will make when buying Daytona Beach condos or Daytona Beach Homes.

The Personal DecisionThe Financial Decision

The personal decision is often emotional and it should be. You need to buy a home or condo that you love, or at least like a lot. It’s the financial decision that is almost everyone’s focus right now. There are some great opportunities and homes for sale in Daytona Beach. We are still one of the lowest priced coastal areas for condos and houses. Read the article on Buying Daytona Beach Homes to see how buying decisions are different for cash buyers and those financing their purchase.

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Maybe. Over the past few days, we’ve seen a few articles that are saying that the bottom of the recent big price drops may have been reached. We also see that the median price of Daytona Beach Homes has jumped from $175,000 in May to $189,000 this month. That’s a fairly big increase, but we are not ready to call the bottom of the market. Here’s why:

Just as we are increasing sales and prices are rising, mortgage rates jumped 0.5% over the past two weeksMarket behavior by sales price range is very differentDaytona Beach Condos are selling below historic percentagesMortgage Rates Jump

We reported a few days ago that mortgage rates jumped 1/2% in the past two weeks. This will impact buying decisions and may put pressure on prices for buyers to get the same home value at a higher mortgage payment. Many people buy their homes based upon the total payment, not necessarily home price. See Mortgage Rate Increases Headline Daytona Beach Real Estate News for more on the impact of the mortgage rate increase.

Daytona Beach Real Estate Market Segmentation

There are three distinct markets that we have identified through our recent analysis:

Daytona Beach Homes for sale under $200,000Daytona Beach Homes for sale over $100,000Daytona Beach Condos

In May, over 58% of all sales in Daytona Beach were under $200,000 and 85% were under $300,000. We would say that this market is fairly stable and in balance. Homes sold at over $300,000 are not selling at the same rate and we expect the price bottom has not been reached in that market.

Daytona Beach Condo Sales Lagging

Finally, condos have historically been selling at about 21% of all home sales, or, one condo for every 4 houses sold. Last month, condos made up only 13% of sale and this month to date, they make up 17%. So the condo market is not showing enough strength yet and will probably see prices drop a little more.

Our Call for Daytona Beach Real Estate Prices

Our analysis says that we are at or near the bottom of the under $200,000 house market. Other markets are lagging and sellers will need to be very aggressive in those markets, resulting in price drops. The condo market is still soft and we are not willing to call a bottom to that market.

The good news is that homes are more affordable and because of this, new buyers, who were priced out of the market in the past, can now afford a home. New buyers coming into the market can do nothing but improve the market.

I’m not an economist, I’m a Daytona Beach Real Estate Agent who looks at the numbers and talks to a lot of people. My personal sales are improving this year and I have had a lot more inquiries and showings in the past few months. I am busy again. This is not translating into as many sales as I would like, but, is an indicator that things are improving “beyond the numbers.”

The Daytona Beach Homes market will eventually stabilize as will the economy. We’ve seen these cycles before and we’ll see them again. We will continue to analyze and report as best as we can.

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Mortgages rates are up 1/2% over the past two weeks. This is not good news for people in the market for Daytona Beach Homes or condos. The 30 year fixed conventional mortgage rate was at 5.8% two weeks ago. The rate today is 6.3%.

What does an increase of 1/2% mean when making your home buying decision. If $200,000 is financed, here’s how it breaks down:

$200,000 financed at 5.8% = $1,183.71 monthly payment
$200,000 financed at 6.4% = $1,241.86 monthly payment

The difference in payment is $58.15/month.

Looked at another way:

$200,000 financed at 5.8% = $1,183.71monthly payment
$191,000 financed at 6.3% = $1,185.98 monthly payment

Basically, if you are financing 80%, you get $11,250 less home for the same payment. ($250,000 vs. $238,750 at 80% financing)

Will prices adjust further downward because of increased interest rates? We can’t be certain, but at some point, inflation will cause prices to rise. We’ve recently been hearing about housing housing affordability putting the breaks on falling home prices. We believe that’s possible and for the first two weeks of June, the median Daytona Beach condos and homes sale price is up $15,000 over May and the average sale price is up about $14,000. This number could change, but median prices had been dropping for a while now. We’ll see what happens going forward.

For a more information and analysis, see our weekly Daytona Beach Real Estate Market Report.

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What do good restaurants have to do with Daytona Beach Homes for sale? Well, to me it’s very important. When looking at property, a good meal can be a good break. And after a day of looking at Daytona Beach and Ormond Beach real estate, you may be ready for a great meal.

If you’re planning a visit from out of town, these are some great restaurants to try and enjoy.

I just posted a new page on my main Daytona Beach real estate site recommending Daytona Beach restaurants including Ormond Beach and Port Orange. I have eaten at all of these restaurants many times, with the exception of Cerchio, but it just opened. There are recommendations on breakfast places, Mexican food, Chinese food, Italian, music and food and more. I also reveal my favorite restaurant in the area.

There are a lot of good restaurants and I’m not a food critic. I am a Daytona Beach real estate agent, so I’m all over town and I probably eat out more than most people. It comes with the job. So these are the places that I try to get to if I can.

Try them and let me know what you think. If you have a place that you want to recommend, just leave a comment and it be permanently included as part of this post.

Bon Appetite! Enjoy our Daytona Beach restaurants.

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It’s prices not foreclosures hurting the Daytona Beach Homes market.

Foreclosures in Florida continue to headline news stories, and nationwide over 1,000,000 homes are in foreclosure. Daytona Beach Homes have been impacted, but not nearly as much as other areas in Florida.

Here are some of the numbers for comparison (1 foreclosure for every x number of homes)

Florida Foreclosure Rates for April 2008

Volusia (Daytona Beach/Ormond Beach/Deltona/Port Orange) 1 foreclosure for very 350 homes

Flagler (Palm Coast) 1 in 204Seminole 1 in 356Orange (Orlando) 1 in 222Osceola (Orlando) 1 in 109Pinellas (St. Petersburg, Clearwater) 1 in 513Dade (Miami) 1 in 161Hillsborough (Tampa) 1 in 264Sarasota 1 in 248

Counties in the Panhandle region of Florida are in the best shape with over 1 foreclosure for every 1,000 homes. (Source: Realtytrac.com)

In general, Volusia County and Daytona Beach are in better shape than many of the other counties in Florida. Florida, overall, is second in foreclosure rates behind California.

Sadly, these high foreclosure rates are not going to go down significantly for a couple of years. 5/1 ARM sub-prime mortgages without income verification were being issued through 2005 and will not come due until 2010. The biggest problem, in our view, is that prices have dropped and we have not had an

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Sales of Daytona Beach Homes and condos for June are lagging behind the first week of May by 13 properties (41 vs. 54). We don’t find this alarming, but, we will watch the coming weeks with interest.

Mortgage Rates

Mortgage rates were up slightly for fixed conventional mortgages, while the 30 year jumbo rate was down slightly. 5/1 adjustable rate mortgages (ARMs) dropped slightly. We continue to emphasize our concern that mortgage rates will come under pressure unless inflationary pressures from fuel, food and government borrowing abate. We don’t see that happening soon.

Daytona Beach Home Inventories

Home inventories are stable at 6159 residential Daytona Beach homes for sale. This figure includes houses and condos. 6159 represents about 22 months of inventory on the market, with about 14 months in the under $200,000 price range. Of course that means homes and condos in higher price ranges have more inventory on the market and are taking longer to sell. In fact, in May, 85% of Daytona Beach property sales were sold at under $300,000 with almost 60% sold under $200,000. See May Daytona Beach real estate sales results for more.

Recent results have been encouraging, but there is still a lot of uncertainty in all markets. There are great deals to be found. I visited the home of a friend in client yesterday who was able to buy a home in Plantation Bay at well under market price. The home sits on a double lot on a lake with a beautiful pool and 99 palm trees on the lot. There is a lot of wonderful Ormond Beach real estate like this home available at prices we probably won’t see again.

Daytona Beach real estate will rebound before some of the other areas in Florida. Our high prices were still low compared to Miami and some of the gulf cities. We are sure living in interesting times.

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The Daytona Beach real estate sales figures for May 2008 show the highest sales since June 2007. Overall sales were up 2.9% over April which was up 27% over March meaning that we held the big gains from April. The strength of the market remains in the lower price ranges. House sales increased by 13%, while condo sales dropped by 36%.

Unit sales of residential properties for March came in at 285 properties topping 277 in April, 218 in March, 222 in February and the low point of 164 in January. Most of the properties sold were single family homes, while 37 condos were sold. Last month, 58 condos were sold. This is against the recent trend of 20-21% of condos sold of the total. The numbers say that there is more strength in the house market than in the condo market - at least in May. We’ll continue to monitor this number, but this is a 36% drop in condo sales, and, a 13% increase in house sales.

Residential Daytona Beach property for sale is at 6165 homes and condos in the Datyona Area Association of Realtor® MLS. That’s down from the end of April when 6219 properties were in the market. The Daytona MLS 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, with 51% of the sales in the $100,000 to $199,999 price range, and the $200,000-$299,999 price range is holding steady at 25%. Of course, that means that the over $300,000 market in total is just over 15% of the market.

Price Range

Number Sold

Percentage of Total

Last Month

Less than $100,000

25

8.8%

9.4%

$100,000 - $199,999

145

50.9%

49.1%

$200,000 - $299,999

71

24.9%

23.8%

$300,000 - $399,999

22

7.7%

7.2%

$400,000 - $999,999

18

6.3%

9.7%

Overs $1,000,000

4

1.4%

1.4%

With almost 85% of sales coming in at under $300,000, the median sales price dropped from dropped from $180,000 to $175,000. However, the average price increased from $226,492 to $228,830. What these two numbers tell us, when taken together, is that prices were pretty firm in May. It’s better to look at the entire year. The median price for the year to date is $182,000 and the average sell price year to date is $236,719. So from the beginning of the year, median price is down less than 4% (3.85%) and the average sell price is down 3.3%. So, based on these numbers, we can say that prices are probably down between 3-4% on average. Sales price as a percentage of listing price was at 92%, meaning that, on average, a home listed for $200,000 sold for $184,000.

So, what does this tell us about Daytona Beach Homes for Sale? First, this is the second month a higher level. This still does not make a a trend, but more buyers and sellers came to terms in May than any month since June of last year with May 2008 sales matching May 2007 sales exactly. Second, there are still extremely high levels of inventory on the market. With 285 sales and 6165 residential properties on the market, we are at still at over 21 months of inventory - 1/2 month drop in May. A buyer’s market is loosely defined at six months of inventory. It’s better, but still not good. Homes over $300,000 have over 51 months of inventory, homes under $200,000 are about 14 months, and homes between $200,000-300,0000 are under 21 months.

Our summary is that it’s great news that we held on to the big gains of April over March. The market is still very much stronger in the under $200,000 price range, and not much is selling above $300,000 where inventories are still very high. Stay tuned for more.

Action to Take Now

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.

2. Mortgage Rates - be careful of mortgage rates moving up due to inflation and eventual increased lending.

3. Inventory Levels - if inventory numbers drop drastically, supply will tighten and price will adjust.

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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Mortgage rates moved up about 3.5% over the last week from 5.8% to 5.99%. If you are in the market for a new home or condo, or considering a purchase in the near future, you should be paying attention to the rates.

We track interest rates and other key information about Daytona Beach homes and condos weekly on my website. You can see the latest version at Daytona Beach Real Estate Market Report.

There is no reason to panic. The cost of a 0.2% increase is less than $8 per month per $100,000 borrowed. However, we believe that significant inflationary pressures are in place in the US economy. The economy is still the strongest in the world, but with high government borrowing and a weakening dollar, we may see more inflation in the next two years than we’ve seen in the last decade. We wrote a post a while back, Daytona Beach Home Buyers - Remember 1980s Interest Rates, outlining some of our concerns.

Please understand that this is a short-term trend. We are calling attention because it’s quite a jump for a one week period. If you finance $200,000 and you keep the home for five years, your will pay $131.50 more per month if the rate goes for 6% to 7%. That’s $7,890 more that you would pay. We point this out because you may lost money waiting for price to drop if mortgage rates are increasing.

That’s the challenge. If you are expecting prices to drop further, watch interest rates and calculate the affect. Go here to access our Mortgage Calculator.

Home buyers are still in the driver’s seat in this market, but to get the best long-term appreciation, you will need to buy low and hold to the next boom, and yes there will be a next boom if your market is like Daytona Beach. Look at the total cost of owning that new property for 5-7 years. Mortgage rates are much more important when considering in this way.

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