December 2007 Palm Coast Real Estate Newsletter

Time marches on but the real estate market remains stuck

By Toby Tobin

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December 16, 2007 – Palm Coast, FL – If you were looking for any significant changes in the Palm Coast, Flagler County real estate market to surface during November, prepare yourself to be disappointed. But if you’re patient enough to watch paint dry, sit back and enjoy the turnaround in the housing market.

Some of our local developers had newsworthy events, a few of them were even good news. The Ginn Company released some building lots in their BriarRose project in Georgia (story). A total of 26 lots were snapped up in one weekend, mostly by buyers from the UK. With the current Euro/Pound exchange rate, these buyers effectively got a substantial discount. Look for more foreign buyers to enter the US real estate markets in the future. A Chinese delegation recently visited the area to examine investment opportunities. Another is slated next month.

Centex, who completed the sellout of the remaining Tidelands condominiums, has since announced pre-construction pricing for two more buildings plus new lower prices for unsold Palm Coast Resort condominiums.  Pricing announced for Tideland units was $200s to $400s. Palm Coast Resort prices are $300s to $500s (formally $800s to $1.3 million). Ginn club memberships, membership fees, HOA fees, and closing cost credits were announced as available incentives.

LandMar signaled that they too are feeling the effects of the down market. They communicated to Grand Club members that they have extended the scheduled reconstruction of the Matanzas Golf Club (course and clubhouse) until market conditions improve. This means that Grand Club members will have to share the Pines and Cypress, the remaining two courses that make up the Grand Club.

WCI Communities, the publicly traded company that develops the condo towers at Hammock Dunes, suffered some serious setbacks (story) . Third quarter financial results came in well below expectations. When they failed to meet the covenants of their credit facility, their lenders gave them only a one month extension. WCI’s CFO and COO resigned effective the end of the year.

For those who are licking their wounds suffered during the sudden collapse of the real estate market, here is some comforting news. You are not alone. Billionaire Carl Icahn is the Chairman of the Board of WCI Communities. He owns 14.5% of the outstanding shares. Earlier this year, he made a bid for the rest of the stock, offering $22 per share. He was rebuffed by WCI. WCI is now trading at just a little more than $3 per share. Two other well known billionaires are heavily invested in WCI. Stevie Cohen (7%), who heads S.A.C. Capital Management, and Marvin Schwartz (5.3%), managing director of  Neuberger & Berman, are also prominent WCI investors.

Levitt and Sons is not a major developer locally, but they do own land adjacent to LandMar’s Grand Landings project, south of the Flagler County airport. Levitt entered Chapter 11 Bankruptcy in November (story), signaling a possible end to a 60 plus year run building over 200,000 homes.

Here is an updated chart of single family residential sales:

November is the thirteenth consecutive month of decrease in median price compared to year earlier numbers. But is also the second month where the number of houses available for sale remained below 2,400.

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