Weekly Market Update 11-09-07
The Real Estate Market Synopsis
New Home Builder Slashing Prices to Generate Sales
Result: They are taking away Market Share from Resale Homes!
Gitta Urbainczyk, P.A., E-Pro, RECS, CLHMS, Broker Associate
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Many home builders are slashing prices to generate sales. It is already tough to watch the current market share shrinking, especially in the resale market. Now, these home builders are stealing away what's left – the resale share of the market! Again, Morris Homes has a full page ad in the Orlando Sentinel advertising up to $105,000 off their resale inventory (Orlando Sentinel: 11-9-07). Plus, they are paying one year of utility cost and negotiating many other deals. This market is affecting everyone. If a home seller is unable or unwilling to negotiate, then they will be sitting on the sidelines while home prices drop all around them. Every day we are entering into deeper waters in terms of the financial markets and the real estate recession. Offers of steep discounting are hitting our desks. A new condo developer is offering to take 65% of the current appraised value of condo now running up to $1.2m. A recent call from a Vulture Fund is offering 40% to the dollar for condos and 50% on homes no matter what the price. DeCaro Auctions, our local auction affiliate, is doing a mega auction valued at $200m in Sarasota of homes up to $20m. Many smaller home builders are on the edge or close to it. A large amount of condo developments have gone to the receiver or are about to go. The picture is not pretty and the future does not look much brighter. It is a buyer's market indeed but many buyers are sitting on the fence afraid of buying because of further market corrections. | |
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General Market Indicators The average home price in Orange County in October, compared to last year, dropped 4% while sales dropped 56% over the same period last year. In September, sales were down 60% by comparison. In Seminole County, the drop in sales was 58% over the same period. Prices were down by 9%. September showed a 60% decline in resales and a 6% drop in the average home price. Volusia County was leading the pack with an 18% drop in the average home price and a 41% drop in sales compared to the same October month last year. In Lake County, the average price of a home for October was down 12% and sales were down 28%. September numbers show a 17% drop in the average home price and a 36% drop in sales. | |
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Community Spotlight: Deltona
The first inhabitants of southwest Volusia County were Nomadic Timucuans who found fish and fresh water plentiful in the area. After Florida became a state in 1845, steamboats began to make regular trips up the St. Johns River to Lake Monroe. Visitors and residents poured into the State, and a community grew up on the shores of Lake Monroe at the steamboat landing. Called Enterprise, the little town soon boasted a schoolhouse (built in 1863) and two churches. In 1908, the Florida Methodist United Children's Home was founded. It continues to care for over 50 children to this day. Things were rather quiet in southwestern Volusia from those early years of the century until 1962, when the Mackle Brothers brought 17,203 acres, filed a planned unit development for a community of 35,143 lots, and named the area Deltona. Work began almost immediately, and the first Deltonans took up residence in April of 1963. By the end of that year, Deltona had a population of 180 people comprising 78 families. School bus service was started, and construction began on a golf course. In 1970, the U.S. Census recorded 4,868 inhabitants; by 1980, Deltona's population was 15,710. The growth of the community continued at the amazing rate of about 130 new families per month to reach more than 52,000 people in 1991, and all indications are that this growth will hold steady for the foreseeable future. The residents of the unincorporated Deltona community voted in September 1995, to incorporate as the new City of Deltona. The third attempt appeared to be Deltona's lucky charm; two previous incorporation attempts in 1987 and 1990 failed. A seven-member Commission was elected and as of December 31, 1995, the City of Deltona became official. As part of the referendum for incorporation, the existing Deltona Fire District was dissolved and on its first day of Cityhood, Deltona had over 50 employees including firefighters, paramedics, and other emergency response personnel. The newly elected City Commission appointed an Interim City Manager, Interim Finance Director and Interim City Attorney. In July 1996, the City Commission hired its first full-time City Manager, Harold Emrich, and first City Attorney, James "Skip" Fowler. In February 1999, Deltona's current City Manager, Fritz Behring was hired and the City has grown to over 240 employees encompassing services of Administration, Finance and Internal Services, Construction Services, Development Services, Enforcement Services, Parks & Recreation and Public Works. On November 7, 2003, the City realized a long-term goal of owning its own utility. The City purchased the Deltona water and wastewater system from Florida Water Services after two years of negotiations. This purchased encompassed hiring of 32 former Florida Water Services employees and the acquisition of all Florida Water Services assets in the Deltona system. Deltona Water is now in full operation and the Deltona City Commission has announced its intent to make significant improvements to the system while maintaining the current utility rates for a minimum of five (5) years. With a current population of 80,052, Deltona is the largest municipality within Volusia County. Centrally located between Daytona Beach and Orlando, Deltona provides a large residential base for commuters to both cities. The City of Deltona, under the direction of its City Commission, top-notch staff, and more than 240 dedicated employees, is thriving. Deltona is a major voice in Volusia County while providing quality municipal services to its residents. | |
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In today's market, you have to understand that the buyer is the king. You also have to understand the value of your home is going down every single day. The price you are getting today is not the price you are going to get tomorrow. If the buyer can't buy your home because you are unwilling to negotiate, then they are going to buy your neighbor's home! It is a very competitive and unsettling real estate and financial environment. If you are selling your home in today's market, you are conveying to the buyer that you are open to low offers and concessions. Otherwise, you should really not have your home on the market. The flood of homes on the market is causing this market to be as crazy as it is. Simply put, it comes down to supply and demand. Have a great weekend.
Gitta | |
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"The significant problems we face cannot be solved at the same level of thinking we were at when we created them." -Albert Einstein | |
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Disclosure This information is provided free for Gitta's team members and/or affiliates or current and future clients of Gitta's Real Estate Team with Keller Williams Heritage Realty. It is for informational purposes only and data from 2nd party providers is used and should be personally verified. Before using any of this information it should be verified with Gitta Urbainczyk, P.A., as it may apply to your specific situation. This information is for the person addressed to and should not be dissimilated to people not intended for. If you received this information and you are presently listed with another real estate company please disregard it. |
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