October surprise? Home prices hit record high in Daytona, despite inventory uptick

Despite an increase in new listings, home prices in Volusia County set an all-time high in October.

Realtors in neighboring Flagler County also reported an uptick in new listings, which helped home sales hold steady in October as prices hovered just below record levels.

Here's a closer look at the latest Realtor association reports for both counties:

Volusia home sales plunged, but not because of low demand

Realtors in Volusia County closed 567 sales of single-family homes in October, down 28.5% from 793 the same month last year, according to county-wide numbers from the West Volusia Association of Realtors.

There's a reason for the sharp decline: last year's back-to-back hurricanes.

Ian hit southwest Florida in late September 2022 and swept through Volusia County as a tropical storm. Nicole hit 45 days later in early November.

"Last year's back-to-back hurricanes caused the numbers to flip," said Justin Falb, a broker associate with Keller Williams Realty Florida Partners in Port Orange. Falb is this year's president of the Daytona Beach Area Association of Realtors.

"Last year, the numbers for September were lower because everyone was concerned about the coming hurricane," said Falb, citing DBAAR statistics. And because October 2022's home sales included transactions that normally would have closed the previous month, "this October, we had 17% less (compared with a year ago)."

Why the uptick in home sale prices?

The median sale price for homes sold in Volusia in October rose to a new record of $360,495, up 1.5% from $355,320 a year ago. The median means half sold for more and half for less.

The average sale price for Volusia in October rose to $441,211, up 13.6% from $388,421 a year ago.

The increased sale prices came despite a 5.7% uptick in new listings that boosted total available homes in Volusia to 2,277. That's the most since May 2020.

So why didn't prices fall? The answer: supply still remains below the level of demand.

"In my opinion, the real estate market in Volusia County shifts from a sellers market to a neutral market when we get 3,000 active listings," said Bill Navarra, the broker/owner of Realty Pros Assured in Ormond Beach. "When we hit 4,000 it tends to become more of a buyers market. Right now, we have 2,590 active listings. At one time, it was down to 900."

A Florida Realtors historical chart of active listings shows Volusia had fewer than 1,000 homes on the market from January through April 2022.

Flagler County Association of Realtors members closed 229 sales of existing single-family homes in October, down just seven from the 236 sold the same month last year. The median sale price rose 2.6% year-over-year to $375,000, up from $365,450 a year ago. The average sale price held steady at $457,228, down ever-so-slightly from $460,565 in October 2022.

FCAR reported 327 new listings, up 5.8% from 309 a year ago.

Total active listings rose to 959, up from 835 a year ago. Flagler's inventory of available homes is now the highest since June 2022, according to FCAR.

Realtor associations report sales and listings by its members, which can include properties in other counties and can exclude transactions by non-members.

Looking at Multiple Listing Service data for Flagler, which are only transactions in the county, there were 226 single-family homes sold, down from 238 a year ago, according to Toby Tobin, a Realtor with Grand Living Commercial Realty in Palm Coast. Tobin writes a blog on the Flagler County real estate market called GoToby.com.

The median sale price in Flagler for October, based on MLS data, was $367,795, compared with $365,450 the same month last year.

"The difference is statistically insignificant," said Tobin of the year-over-year comparison. "They show that home sales for the most part have been holding steady with median prices going sideways. That tells me that we're not in a housing recession."

Tobin said Flagler's real estate market remains fairly balanced between buyers and sellers. "Both sides are restricted," he said. "In what I call a reasonable (housing) market, there would be an inventory of between 800 and 1,200 single-family residential listings."

As of Monday, the MLS system for Flagler showed 971 active listings, still well below Tobin's threshold for a buyers market.

Affordability remains a big concern

Affordability remains a major constraint on the local real estate market.

According to the latest U.S. Census Bureau estimates, the median household income in Flagler is $62,305 a year. It's even less in Volusia at $56,786 as of July 1, 2022. Both counties are well below the $69,021 national average.

Households where the annual income is at or below the median can only afford to spend $200,000 at most to buy a house, according to Tobin. There are hardly any listings available at that price.

"We don't pay our workers enough here," he said. "We want our pizza delivered on time, but we want the pizza delivery person to live somewhere else."

High interest rates keep inventories from rising more

The number of homes on the market would be greater, if not for high interest rates, according to Realtors.

"If you currently have a mortgage rate of only 3%, chances are you're not going to want to sell it and then have to take out a new mortgage loan at 7.5% to buy a home somewhere else," said Tobin.

Mortgage giant Freddie Mac on ThursdayNov.30 reported the national average rate for new 30-year fixed-rate mortgage loans dipped to 7.22%, down from 7.29% the week before. While that marked the fifth consecutive weekly decline, the benchmark rate is still higher than the 6.49% rate a year ago.

Prices here still a 'bargain' ― if you can afford them

Even with October's price increases, homes in Flagler remain "relatively inexpensive compared to many areas in other parts of the country," said Tobin.

That's also true of Volusia, said Falb. "If you're moving here from the New York/New Jersey area or from California or even South Florida, we're still a beacon of value," he said.

According to the National Association of Realtors, the median sale price for single-family homes nationally was $391,800 in October.

Cash buyers fueling sales of high-end homes

Helping drive prices higher locally was a surge in sales of high-end homes. Realtors in Volusia sold 24 homes for more than $1 million while their counterparts in Flagler sold 22.

"The three highest home sales (in the Daytona Beach area) were all cash deals," said Falb. "That's because if you're buying in cash, you aren't affected by high interest rates."

Tobin said that trend has continued in November. "So far this month, of the top 17 sales in Flagler, all but one were cash deals," he said.

Realtor: 'This is my best year ever'

Nancy Cortez is an agent with Adams, Cameron & Co. Realtors in Ormond Beach who was involved in two million-dollar-plus sales in October, both in the Breakaway Trails community.

"I've been a Realtor for 19½ years. For me, personally, this is my best year ever," said Cortez. "My biggest sales have been happening in the second half of this year. People are still buying and a lot are doing it with cash."

Cortez on Nov. 10 helped a local couple buy a 7-bedroom, 8-bath beachside luxury home at 211 John Anderson Drive in Ormond Beach for $2.7 million. "We actually had it under contract twice, but they had a couple of hiccups in trying to buy it," she said of her clients. "It wasn't an easy property to get a loan on, especially at today's interest rates."

This article originally appeared on The Daytona Beach News-Journal: Daytona home prices set new record, despite inventory uptick