Quick Overview of Daytona Beach Real Estate Market
We’ve seen this coming for awhile. The costs of buying a home is getting higher. Prices are up and now mortgage rates are climbing. Prices are rising because fewer homes are available. It wasn’t long ago that there were almost 6,000 homes and condos on the market (September 2008) in the Daytona Beach MLS. Today there are 3,282 residential properties listed, about half of five years ago.
The average home/condo sales price was $158,000 in April 2011. In May 2013, the average was $176,587. That’s about 11.8% over a two year period. Other areas are rising much faster, so Daytona area homes and condos are still a good value compares to Miami and Naples were prices are rising much faster.
Mortgage Rates Rising
Mortgages are going to continue to be more expensive. This will affect home buyers in the area, but in May, of the 528 homes sold, 56.6% were sold for cash with the remaining 43.6% financed. A lot of people are still buying with cash.
Mortgages are rising because of the message Federal Reserve Chairman Ben Bernake sent to world financial markets yesterday. He said that the Fed is expected to reduce the amount of bonds it is buying sometime this year and stop buying completely sometime in 2014. By reducing these purchases, the Treasury will need to raise rates to make them attractive to non-government buyers.
Mortgages are at about 4.24% today and 10-year Treasury Bonds are at 2.41%. Mortgage rates track 10-year Treasury Bonds with a spread of between 1.7 to 2 percentage points. I’ve seen forecast of rates topping out at about 5.5%, but those are projections from economists and we know how accurate their predictions can be.
The Bottom Line
Prices are rising and mortgage rates are rising. If you’re looking for a full-time home, investment home or condo, or a retirement home for now or a few years out, you’re going to pay more, especially if you’re financing.
The window to take advantage of the lower prices from the market crash is not closed, but it’s getting there. If you would like to discuss the market and your options, please call David Byrne at 386-566-4169 or Lynn Byrne at 386-566-7503.
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