Daytona Beach, FL Real Estate Market Trends & Analysis [Updated 2021]

by Than Merrill | @ThanMerrill
Published on Mon, May 17 2021

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The Daytona Beach real estate market is highlighted by an incredibly high foreclosure rate. In fact, few major metropolitan areas across the country have exhibited a higher distribution of foreclosures than Daytona Beach. The poster child of the entire Florida real estate market, real estate in Daytona Beach is a big reason Florida currently boasts the highest foreclosure rate of all the states. That said, the volume of distressed homes is currently leaning in favor of local investors when prices are rising across the country. In addition, select neighborhoods have proven lucrative for real estate investors in recent history because of the area’s low acquisition costs. As a result, Daytona Beach real estate trends should favor investors for the foreseeable future.

Daytona Beach Real Estate Market 2021 Overview

  • Median Home Value: $188,224

  • 1-Year Appreciation Rate: 11.0%

  • Median Home Value (1-Year Forecast): N/A

  • Median Rent Price: $1,300

  • Price-To-Rent Ratio: 12.06

  • Unemployment Rate: 5.1% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 69,186 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $35,893 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 27.42%

  • Foreclosure Rate: 1 in every 4,066 (2.4%)


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2021 Daytona Beach Real Estate Investing

The Daytona Beach real estate investing community is experiencing the same thing as every other city across the United States: Home prices are soaring on the heels of lower borrowing costs, lacking inventory levels, and increasing demand. While many feared the pandemic would ruin the local housing sector, it actually served as a catalyst. As a result, real estate investors in Daytona Beach were forced to reevaluate their exit strategies based on the new market landscape.

To be clear, Daytona Beach’s foreclosure rate makes it possible for many investors to continue flipping homes. Whereas attractive profit margins are harder to find in other cities, Daytona Beach has more distressed inventory than the average market. As a result, investors may have an easier time finding distressed homes to flip for profits in Daytona than many of its counterparts. That said, the last decade has seen homes in Daytona Beach appreciate 103.1%. While better than other cities, profit margins are growing slimmer, which is why man investors have turned to long-term strategies.

In addition to home prices reaching new highs each month, borrowing costs are near record lows. According to Freddie Mac, the average commitment rate on a 30-year fixed-rate mortgage was 2.94% as recently as May. At that rate, the Daytona Beach real estate investing community could not only offset higher acquisition costs but could also increase cash flow from rental properties placed in operation. With a lower monthly mortgage payment, landlords stand to make more each month.

Real estate investors in Daytona Beach are lucky to have several viable exit strategies at their disposal. Unfortunately, most cities have appreciated so much that flipping and rehabbing are growing harder. However, the Daytona Beach real estate market boasts a unique combination of affordable housing and distressed inventory. As a result, flipping is still a great option, but today’s indicators lean heavily in favor of long-term strategies.

2021 Foreclosure Statistics In Daytona Beach

According to RealtyTrac, a nationally recognized real estate information company, one in every 4,066 homes homes in Daytona Beach is distressed. More specifically, however, 2.4% of homes in Daytona Beach are either distressed, up for auction, or owned by the bank. While better than in years past, Daytona Beach’s foreclosure rate is amongst the worst in the country. For some perspective, the average foreclosure rate across the country sits somewhere in the neighborhood of 0.8%.

The overwhelming majority of distressed homes are either up for auction or will be at some point soon. In all, 70.0% of the city’s distressed inventory is tagged for auction; that’s up 133.3% from the previous year. The increase is most likely the result of COVID-19. As quarantine orders forced many out of a job, the financial burden became too big for many to comply with. As a result, far too many homeowners couldn’t keep up with mortgage obligations, resulting in the foreclosure crisis we have today.

Fortunately, investors who position themselves well may be able to lend a helping hand. While it’s too late to save homeowners who have lost their homes to the bank, 30.0% of the city’s distressed inventory is merely at risk of falling into foreclosure. That means proactive investors may be able to buy the homes of distressed borrowers, simultaneously landing a deal and saving the homeowner from bankruptcy.

Investors looking for distressed homes should look in the neighborhoods with the highest distributions:

  • 32117: One in every 2,520 homes is distressed

  • 32114: One in every 4,033 homes is distressed

  • 32119: One in every 11,923 homes is distressed

Moving forward, the Daytona real estate market is expected to be home to an influx of foreclosures. In addition, with the impact of the pandemic on the local real estate market still ongoing, it’s likely more homeowners will fail to keep up with their mortgages. With that in mind, investors should take the steps now to help distressed homeowners soon.

2021 Median Home Prices In Daytona Beach

The median home value in the Daytona Beach real estate market is about $188,224, according to Zillow. Today’s median home value is the result of nearly nine consecutive years of appreciation, capping the latest increase with an 11.0% jump in the last year (March 2020 to April 2021). To put things into comparison, the median home value in the United States increased 11.6% over the same period.

While it’s too soon to tell exactly how much of an impact the pandemic will have on home values moving forward, it’s safe to say prices will increase for the foreseeable future. Not unlike everywhere else, the Daytona Beach real estate market is lacking a sufficient inventory supply to keep up with demand. Not only were there not enough homes before the pandemic, but builders haven’t been able to keep on schedule. As long as demand outweighs supply, prices will continue to go up.

Daytona Beach Real Estate Market 2020 Summary

  • Median Home Value: $157,384

  • 1-Year Appreciation Rate: 5.0%

  • Median Home Value (1-Year Forecast): 2.2%

  • Average Days On Market: 89

  • Median Rent Price: $1,300

  • Price-To-Rent Ratio: 10.08

  • Percent With Negative Equity: 11.0%

  • Unemployment Rate: 3.0% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 68,866 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $39,932 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 27.42%

  • Foreclosure Rate: 1 in every 1,712 (5.8%)

Daytona Beach Real Estate Investing 2020

The Daytona Beach real estate market trends that came out of 2020 were no different from the rest of the country. Much like everywhere else, real estate in Daytona Beach entered 2020 firing on all cylinders. A strong economy enabled prospective buyers to participate in a market with rapidly appreciating home values. As a result, rehabbers found that the demand was well worth the slightly higher price margins. Buyers seemed eager, despite home values touching new highs each month.

No more than three months into the year, however, COVID-19 was officially declared a pandemic. In a matter of weeks, sentiment around the Daytona real estate market shifted from positive to negative. As fear and uncertainty swept across the country, real estate in Daytona Beach lost all momentum. Owners took their listings off the market, buyers refused to tour homes, and underwriters closed up shop because of government-mandated quarantine orders. In one fell swoop, all activity had been brought to a standstill.

Just when things looked their worst, the Fed stepped in and lowered interest rates to spur buying activity. Fortunately, the lower borrowing costs worked better than anyone could have ever imagined. Buyers came out in droves to take advantage of the new interest rates; that, combined with government stimuli and increased savings, was enough of a catalyst to get the market back on its feet.

In just a few weeks, demand greatly outweighed supply, and homeowners found themselves with multiple offers. Subsequently, demand transformed into competition, and prices reacted accordingly. From the moment the Fed announced lower rates until the end of the year, the median home value in Daytona Beach increased 5.9%. For some perspective, the median home value in the United States increased a slightly more modest 4.7%. For all intents and purposes, the Daytona Beach real estate market was doing really well over the course of 2020, and investors were forced to alter their exit strategies.

Prices increased so much in 2020 that profit margins on rehabbed dropped considerably. Fortunately, the Fed’s idea to lower interest rates spurred a new, more viable strategy: rental properties. The lower borrowing costs created in the wake of the pandemic simultaneously helped rental property investors justify high prices and increased cash flow from properties placed in operation. Rates were too good for anyone to pass up, especially long-term investors.

Daytona Beach Real Estate Market 2015 Summary

  • Median Home Price: $132,000

  • 1-Year Appreciation Rate: 2.3%

  • Unemployment Rate: 5.3%

  • 1-Year Job Growth Rate: 1.4%

  • Population: 62,316

Daytona Beach Real Estate Investing 2015

Daytona Beach real estate market news summed up the area with one simple word in 2015: affordability. In fact, the median home price was around $132,000 at the time, or approximately $76,000 less than the national average. In addition, appreciation rates across the country were nearly twice those seen in Daytona Beach in 2015.

Even with slower appreciation rates, the Daytona Beach housing market made considerable improvements since the worst part of the recession. As a result, homeowners in the area began to see growth in positive equity. Daytona Beach real estate investing, in particular, saw improvements thanks to increasing home values. Subsequently, the city was one of the best places to flip houses five years ago.

While the Florida city wasn’t the picture of a perfect economy, people in the area had reason to celebrate a renewed optimism. The end of the downturn essentially opened doors to attract high-end development that created jobs and expand the local tax base. Supply and demand within the Daytona Beach housing market grew steadier with each passing year. That said, the area’s unemployment was better than the national average. At 5.3%, unemployment was 0.3% lower than the rest of the country and 0.7% better than the previous year.

There were very few markets that were better for real estate investing than Daytona Beach at the time. The Florida city was officially the second-best area to flip houses in the country (behind Baltimore). According to RealtyTrac, Daytona Beach real estate investing was accompanied by a 74.7% return on investment. While that is nearly 20 points lower than Baltimore, it was enough to place the Daytona Beach housing market second on the list of best places to flip a home.

The Daytona Beach housing market was incredibly affordable. Data compiled by the National Association of Realtors (NAR) suggested homeowners spent about 8.2% of their income on monthly mortgage payments. Conversely, the average homeowner across the country spent about 15.1% of their income on monthly mortgage obligations.

Daytona Beach real estate investing thrived because of the local distressed market. According to RealtyTrac, there were approximately 644 properties at some stage of the foreclosure process. At that rate, foreclosures were 14.0% higher than the last month and 9.0% higher than the previous year. However, if the number of available properties isn’t enough to get real estate investors excited, the discounts they offer will. The median sales price of a non-distressed home was $98,000. The median sales price of a foreclosure home was $55,100, or 44.0% lower than non-distressed home sales. That was a savings of nearly $43,000 per distressed property.

Daytona Beach County Map:

Map of Daytona Beach neighborhoods

Daytona Beach Real Estate Market Summary:

The Daytona Beach real estate market has had a particularly rough time dealing with the pandemic. Even before COVID-19 was officially declared a global disaster, the local housing market was hit hard by foreclosures. Not surprisingly, the Coronavirus made things worse. As a result, however, investors have found new ways to capitalize on today’s trends. Specifically, local investors have turned towards rental properties and will continue to do so as long as borrowing costs remain as attractive as they are.

Have you thought about investing in the Daytona Beach real estate market? If so, what are you waiting for? We would love to know your thoughts on real estate in Daytona Beach in the comments below:


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