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.
I haven’t posted in a few days because I’ve been really busy with buyers. We weren’t sure if the out of town buyers would make it because of Tropical Storm Fay. But they came. So the weekend and today was spent with buyers from out of town.
In the past week, we’ve had buyers in town from Pittsburgh, Canada and California. Each has a different reason for buying and each has different ideas of what they are looking, but, they are looking for the best value that they can find. I don’t know of any buyer who is not using price as a major consideration in their requirements.
It’s interesting that Daytona Beach homes sellers are pricing their homes higher, sometimes much higher, than they will accept because they expect low offers to come in. What does this mean for buyers? It comes down to this, if you are looking for a home in a certain price range, you should include homes that are priced at least 20-25% higher. So if you’re looking for a $200,000 home, you should include homes that are listed at and over $250,000.
It’s a bit of a game right now and sellers and buyers are going to do a negotiating dance in most cases. A seller who says their price is firm is eliminating a large pool of buyers. This large group is not going to look at a home where there is no negotiation.
One final point about the current market, I have never seen this level of buyer remorse. I have had several contracts cancelled because the buyers just were not willing to go to closing. It’s not hard to understand why. Turn on CNN or any other news outlet and you’ll get a big dose of bad news about housing and the economy. People are very concerned about prices falling further. Buyers and sellers need to protect themselves and there are steps you can take. You must have an experienced real estate agent. In Daytona Beach, Ormond Beach, Port Orange and East Volusia county I can help protect you. Give me a call at 386-566-7503.
Tropical Storm Fay Looks to Skirt Daytona Beach Area
I just looked at the latest storm track for Fay from the National Weather Service and it looks like she is going to go right around Daytona Beach. That’s the good news, the bad news is that these storms are very fickle and unpredictable.
Hurricane Charlie turned at the last minute and devastated Punta Gorda on the Gulf coast. This storm could turn, but it’s unlikely at the moment.
We still need to stay alert. Expect power losses when high winds come into clear out weak branches and dead trees. It’s been four years since Charlie, Frances and Ivan hit Daytona and you would think that they cleared everything out. This is simply not the case. Trees grow and trees die over four years, so expect branches and trees down if the wind kicks up.
The storm is going to pass close to the beach and that means high waves and possible beach erosion. We’ve experienced erosion in the past, but nature, with a little help from the county, brings the beach back pretty quickly.
Please keep careful watch on Fay and don’t take any chances. Despite the 2004 season, we’ve been pretty lucky in this area with storms and it looks like we’ll be OK this time as well. This is the one case when it pays to be overly cautious. Please repsect these storms and the damage they can bring.
The river views are tremendous during the day and spectacular at night. Sit on you balcony or by the riverside pool and watch the boats go by. Or, you could fish or enjoy the cool breezes from the dock. Or, maybe a short walk to the beach.
This 2 bedroom 2-1/2 bath condo is fully furnished and beautifully done. There are corian counter tops and tile is used liberally throughout the home. The carpet is new and the roof has been recently redone.
But, why read my attempts to describe it when you can watch the video and see it for yourself. It’s less than 2 minutes. We’re asking $178,900 and at that price, it one of the most attractive condos on the river. Give me a call at 386-566-7503 to see it for yourself.
You can find more information on Daytona Beach condos at my main website, www.lynnbyrne.com.
The Daytona Beach homes market has been very much affected by dropping home values. In many cases the value of the home or condo has fallen below the amount owed on the mortgage or mortgages. Sellers in this situation cannot sell their homes without spending money out of their own pockets to close.
Many of these properties are headed to foreclosure because, on top of the value being less than the mortgage, the home owner is unable to make the mortgage payments.
There is an alternative to foreclosure for eligible homeowners. It is to the advantage of both the lender and the homeowner to pursue a short sale in many cases. A short sale means that the bank is willing to accept an offer from a new buyer that is less than the mortgage value . The lender saves the cost of foreclosure.
If you are a home owner thinking about selling using a short sale, this is the video you need to watch. It will explain the process and help you determine if you are eligible and if a short sale is right for you.
Please feel free to call me at 386-566-7503 if you have any questions about the short sale process. I’ve completed short sale transactions successfully and I’ve taken training on the process.
As promised in our post yesterday, we have created two videos. The first is Daytona Beach Real Estate Short Sale Buyers. This video explains what a short sale is, if it’s to your advantage, and the qualification requirements the lenders are seeking.
Real Estate short sales can save you 20 to 40 percent if you have the patience and knowledge to properlty pursue the process. This video can’t give you patience, but can provide a solid starting point in the short sale buying process.
I have taken several classes in the short sale process, but more importantly, I’ve successfully completed short sale transactions. Whether you’re a seller or buyer, give me a call at 386-566-7503 to get started.
It’s hard to believe, but this is our 100th post to the blog. We started in January when Daytona Beach real estate sales were at the lowest point in recent memory. We’ve chronicled the increase in sales as the market begins its recovery. Then in July, we save sales rise to the highest level since September of 2006.
We’ve also evolved a bit. We are not aggressively pursuing the use of video to enhance our service to both buyers and sellers. We have also attempted to focus on what’s important to our site visitors and customers. We have been listening, and people have been telling us they want to know more about short sales and foreclosures.
So, we have put together two videos on short sales. One video for short sale buyers and one video for short sale sellers. We are finishing the final editing on both videos and they will be up within the next 24 hours. We will post the announcement as they become available.
We will continue to provide market news and focus on what’s important to our visitors and customers. If you would like information on something we haven’t covered, just send us a message. I’m always available to answer questions at 386-566-7503.
How Our Use of Technology Can Benefit Daytona Beach Home Buyers
We have entered the video internet age. We believe that in a few years, video listings will be a normal part of our home buying experience. But, we are not waiting a few years, we are pioneering the use of video as a marketing tool, but more importantly as a customer service tool.
We have a great team and I’m lucking to have a couple of technology savvy people on my staff. My husband Michael and my son David. Michael has been involved in information systems since 1979 and was a Director of Information Technology for a Fortunre 50 company. David is a filmmaker who attended film school in New York and at UCF.
Yesterday and today, David is with a customer from California. David and the customer are shooting video of homes for the customer to show his wife who did not make the trip to Florida. Let’s face it, if you try to describe a home through pictures and words, it just doesn’t do justice. BUT, shoot a video and it’s the closest you can get to being there, well, without being there.
A while back, I used a Flip Camera to video the upstairs of a home I was showing to a customer because the customer was unable to climb the stairs that day. Without the video, she would have been in the dark about the second floor features of the home. She was able to make a better decision because of our technology.
Video is not a substitute for customer service, it’s an enhancement. I still do things like answer my phone, return calls and emails quickly, and I’m personally present at most of the showings of my listings. Call me old fashioned, but service is still the most important part of my business.
I won’t bore you with the technical details of our four video cameras, editing software and capabilities, high end Mac video editing computer and how we host our computers on our websites. Frankly, I don’t understand it all myself, but I know it works.
We are in the process of creating video listings for all our listed properties in Daytona Beach, Ormond Beach and Port Orange. They will be coming in the weeks to come.
We look at technology as raising the service bar. Technology by itself is a no use, it’s how we use it to enhance service that’s important. Our goal is to provide the highest level of service to both homes buyers and sellers.
Fuel costs and food prices are driving steep increases in prices. Other commodities, like clothing are also becoming more expensive. The July monthly increase of 0.8% is twice the expected increase and results in an annual rate of about 12% if it continues. CNN Story.
For the year, the inflation rate is 5.6%. With fuel prices dropping slightly over the past weeks, August may be better, but we can’t be certain.
Now, to the affects of inflation on mortgage interest rates. Mortgage interest rates are mostly driven by the bond markets and the amount that investors are willing to pay for the bonds. The rates they are willing to pay are based on a lot of factors, but bond investors are generally more interested in safety, so they are willing to accept lower rates than with riskier investements.
The problem that inflation presents is that the rate of interest earned from a bond must be discounted by the rate of inflation. If a bond investor gets a yield of 6% and inflation is 5.6%, they are earning 0.4% net after inflation. Not too many people are going to accept this return on their investment.
To put it simply, inflation affects bond yield that affect mortgage interest rates.
As of today, the rate for a 30 year conventional mortgage was about 6.43%. That rate must assume all the economic factors that go into the bond investors decision. So, we must conclude, that as of today, bond investors believe that long-term inflation will be much less than the current rates.
In a few days we will know the affect of today’s news. It takes that long to make it’s way through the market. Our bet is that the actual inflation rate coming in at double the expected number is going to send mortgage rates up, and if August and future month numbers are in the 0.8% range, mortgage rates will move up sharply. Apparently, there is strong belief among investors that these rates of inflation will not stay as high as they are now.
The affect of rising inflation and mortgage rates on Daytona Beach condo and home sales cannot be good. We had a great sales month in July, the best since September 2006, but if mortgage money becomes more expensive, it could negatively impact sales.
As a real estate buyer who will be financing, you should pay close attention to inflation and mortgage interest rates. The affect on mortgage payments is significant. On a $200,000 mortgage, an increase of 1 point is about $130.00 per month.
We’ll report back in a few days if there is a spike in mortgage rates.
Newspapers, Real Estate Magazines, Print Advertisers Suffering
Daytona Beach real estate agents are not investing much money in print advertising.
I was in the office of a friend the other day and looked at the free real estate magazines on the table in the lobby. I was shocked. They are so thin compared to a few years ago. What’s ironic is that they were thick when so few homes were available and are thin now when the market is saturated.
The old saying is that people vote with their money. From the reduction in the size of the free magazines, and the much fewer advertisements in the Daytona Beach New Journal, it can be said that real estate agents and company are voting not to put their money into print advertising.
We have known for several years that print advertising was becoming less effective. It has been our lowest source of contact from buyers of all the tools that we use. In a market where gaining listings is very competitive, many Realtors ran print advertising because the seller insisted. I will admit that we certainly did.
Signs are still very effective. We continue to get a lot of calls off of signs. We have increased the information on the signs about the home so that buyers are more interested in calling.
But the number one source of buyers inquires for us is the internet. Nationwide, more than 75% of buyers start their search on the internet. They call or email us about specific properties and what’s available in the area.
A real estate agent with a web presence is not enough. That web presence must produce buyer contact. If that is not happening, then the seller and the agent will both suffer.
My main site at www.lynnbyrne.com offers full search features for the Daytona Beach MLS. This covers Daytona, Ormond, Port Orange and surrounding areas. In addition, we post listings to national listing services for buyers who begin their searches theres.
Real estate advertising has gone to the internet and it’s going to stay there. Selective marketing of properties in other media forms, like print advertising, may still be effective, but smart money says to go where the buyers are - the internet.
Posts
