Daytona Beach Real Estate: 2007 year in review

I recently posted 2 blogs about how well my Daytona Beach real estate sales have started in 2008. This is great news compared to the great real estate meltdown of 2007. Read Real Estate is Great in 2008 and Good News for Central Florida Real Estate in 2008 to find out how my year has started.

Now let's review the residential real estate sales history for Daytona Beach for 2000-2007.

Over the last month or so, I noticed an interesting trend. The residential real estate listing base in the Daytona Beach Area Multiple Listing Service (MLS), which includes all of East Volusia County plus some crossover listings from neighboring areas, has been slowly dropping, although the sales don't seem to be increasing. One is left to assume that the many people who need to sell have been just letting their properties expire during the holiday season. We'll have to closely watch the inventory over the next couple of months, to see if the listing base starts to increase again. But first, let's take a look back at our area's time line.

In the summer of 2005, the Daytona Beach area MLS only had approximately 1000-1400 residential listings available at any given time. This low supply, coupled with a heavy housing demand was causing our real estate prices to skyrocket and bidding wars were common. Then toward the end of 2005, the inventory slowly started to climb, as the speculator-investors completed their remodeling projects and began putting their prized inventory back on the market. Since the demand still exceeded the supply, those renovated houses were scooped up immediately, for top dollar. The real estate feeding frenzy was still in full effect in the Daytona Beach area. While most of the U.S. real estate market was starting to decline, most of Florida's market remained strong.

It was at the beginning of 2006 that some real estate agents in east Volusia County, where the Daytona Beach Area Association of REALTORS is located, began to report slower sales. I can't speak for everyone, but I personally saw no change in my sales until July of 2006. In fact, by June of 2006 I had already beat my 2005 year-to-date sales and was set to have another record-breaking year. But in July of 2006, as I described it at the time, my personal business came to a sudden halt. Little did I know that what I considered a sudden halt was nowhere near the complete halt that was yet to come. And the inventory began to climb, faster and faster and faster.

As most of you know, it was 2007 that showed what a true sudden halt really is. With real estate lenders and brokers going out of business, and blame being placed on everyone in the industry for the poor choices that were made by borrowers who thought the boom would never end, we finally saw what the face of a sudden halt really looked like! And this is the mess we still find ourselves in today. I guess all the people who thought REALTORS were getting rich should have been looking at the big picture; which is the cyclical, roller coaster ride of the real estate industry.

With all that being said, the residential real estate inventory for the Daytona Beach Area Multiple Listing Service finally maxed out around 7,000 listings, while sales dropped to approximately 230 per month for the entire county. And with 2.5 years of inventory, in the summer of 2007, when the top 10 of the mortgage industry started cutting programs and/or completely running out of money, Daytona Beach real estate values finally started to fall. And when they fell, they fell fast! I guess that's how it happens when an area manages to hold out for that much longer than the rest of the country.

So now, with improvement starting to show in the Daytona Beach area, the question remains, is this a temporary bump or will the improvement continue? Since reports are showing that Countrywide, the number 1 lender in the U.S., who we already know has had to beg and borrow, just to continue making loans over the last few months, is now breaking under the strain of non-payments and foreclosures, I'm not holding my breath that we're out of the woods yet. Smart real estate sellers will seek to make Smart Choices when looking for a REALTOR to help them sell their houses, land and condos. And they'll do it as quickly as possible as in just the last couple of days, our real estate inventory has already started to build again, and real estate buyers know they're still in control.

But experts in the industry believe that 2008 is the year that the correction period will be complete and real estate values in the Daytona Beach area will once again begin their climb. You have to remember...

1. Daytona Beach has always been a highly sought-after location for real estate buyers from all over the country, due to it's warm climate and affordable cost of living.
2. It's very likely that this very month, our property taxes will drop significantly as the Florida Association of REALTORS is pushing hard for voters to approve into law, the portable homestead exemption for their property taxes.
3. With U.S. currency being so under-valued, Florida is a hot spot for foreign investors who are looking for a desirable climate and an excellent return on their investments. We are seeing this more and more, especially with the internet making it so easy for foreign investors to find the properties they desire.

Below is a chart, tracking annual real estate sales in Daytona Beach, since 2000. Bear in mind that this chart is only for Daytona Beach; not any of the surrounding cities. Check back as I post the reports for each city in East Volusia County over the next week or two.

To buy or sell real estate anywhere in the Daytona Beach area, make a Smart Choice and contact Lisa Hill, member of the Daytona Beach Association of REALTORS® and the New Smyrna Beach Board of REALTORS®.