Flagler Co. and Palm Coast: First Half 2016 Housing Market Wrap-up

The first half of 2016 saw 5.66% fewer homes sold compared to the same period in 2015. But median prices are 16.56% higher and total sales value is up 7.46%.

Palm Coast, FL – July 21, 2016 – With six months of sales under our belt, GoToby.com takes a look at year-to-date (YTD) home sales compared with the tally during the same period one year ago.

Single-Family Homes

An average 185 single-family Flagler County homes were sold monthly via MLS in the first half of 2016. In the world of statistics, we call that a small sample. When small samples are used, differences between samples can vary widely on either side of a trend line. It’s risky drawing statistical inferences from small sample sizes. That is why I don’t generally put a lot of significance in individual monthly results.

Flip a coin five times and record the number of “Heads.” Then repeat the test several times. It’s likely that you will record actual results ranging from 0% Heads to 100% Heads. But if you flip the coin 1,000 times, the number of Heads will likely be very close to 500, or the expected 50%. This is a demonstration of “The law of large numbers,” first proven over 300 years ago.

Through the first half of 2016, the number of homes sold monthly ranged from 126 in January (typically the area’s slowest month for home sale closings) to 233 in May. Median prices ranged between $175,000 in February to $209,900 in May. Certainly home values did not rise 20.0% between February and May. Nor did home values drop 5.9% between May and June, when the median selling price was $187,900.

By combining six months of data, we level out the extraneous variations, presenting a truer picture. And the picture is very good.

Six months 2016 vs. six months 2015

The slight drop in unit sales is likely attributed to a declining home inventory. During the first half of 2015, inventory was in the 900 to 950 range. Inventory has fallen below 800 homes, representing only 3.6 months of sales at the current sales volume. It’s definitely a seller’s market.

Monthly Stats – How did we compare to U.S. and Florida results for June?

Median price of single-family home

• Flagler County – $187,900 – up 13.9%
• Florida – $225,000, up 10.8% from June 2015
• U.S. – $249,800, up 3.2% from June 2015
• Southern U.S.- $217,400, up 5.5% from June 2015

Distressed sales (Foreclosure and short sale)

• Flagler County – 10.9%, down from 15.1% one year ago
• Florida – 10.2%, down from 20.1% one year ago
• U.S. – 6.0%, down from 8.0% one year ago

Foreclosures

Foreclosure activity is a good measure of the strength of homeowner equity and ability to pay mortgages. There are three foreclosure metrics that I follow.

Foreclosure filings mark the beginning of the foreclosure cycle. Through mid-year 2015, there had been 219 new foreclosure filings. Through mid-2016, foreclosure filings were down 18.7% to 178.

Foreclosure completions mark the end of the foreclosure cycle, when the foreclosed property is sold at a foreclosure auction to either the lender of a third party bidder. The 450 foreclosure completions through mid-year are 24.9% fewer than during the same period one year ago.

In between the foreclosure filing and the completion are open foreclosure cases. This number too is declining; from 599 a year ago to the present 450, representing a 24.9% decrease.

Foreclosures are quickly becoming an unimportant factor in our housing market, as seen in the 61% drop in foreclosure sales. It is evident in the decline in the number of foreclosure MLS listings, with only 12 available at this time.

New Home Construction

The most recently estimated population growth in Flagler County places a yearly demand for 1,200 to 1,300 new residential units, well above the average number of new homes permitted annually. Until recently, the construction deficit has been covered by unoccupied short sales or foreclosure sales. Since this source of “buffer” homes has become depleted, more pressure will be directed toward new construction.

Single-family residential building permits are on the rise in 2016. Through June, 356 permits were issued, up 19.1% from one year ago. Building activity is particularly brisk in the new communities; Hidden Lakes, Grand Landing, Beach Village, Park Place and Eagle Lakes. Construction activity has also picked up in The Conservatory.

GoToby.com looks for a strong second half. The home inventory deficit will continue to put upward pressure on home prices. Naturally, home rental prices will rise too.

Toby Tobin is a licensed Florida Realtor® affiliated with Berkshire Hathaway HS Fortune Group Properties in Palm Coast, FL. He can be reached at 386-931-7124 or at Toby@GoToby.com.