2012 was a good year for the Palm Coast real estate market. 2013 will be better.
In January 2012, I said, ”At the end of the year, we will look back and say WOW.” By every measure, 2012 was better than the preceding year. By many measures, it was the best in years.
Palm Coast, FL – January 7, 2013 – In January 2012, I said, ”At the end of the year, we will look back on Palm Coast’s housing market and say WOW.” By every measure, 2012 was better than the preceding year. By many measures, it was the best in years.
Homes sold
With the month’s sales still being reported, December already tallied more single-family Flagler homes sold through MLS than any December since 2005. The same can be said for the fourth quarter as well as for the entire year.
With the month’s sales still being reported, December already tallied more single-family Flagler homes sold through MLS than any December since 2005. The same can be said for the fourth quarter as well as for the entire year.
Selling prices
The median home selling price for December (preliminary reporting) was $125,000, compared to $115,000 in December 2011. The median selling price was up for the fourth quarter as well as for the entire year. This is the first year-over-year increase in the median selling price since 2005.
The median home selling price for December (preliminary reporting) was $125,000, compared to $115,000 in December 2011. The median selling price was up for the fourth quarter as well as for the entire year. This is the first year-over-year increase in the median selling price since 2005.
Total sales
December represented the sixth consecutive month of an increase in the total value of all single-family homes sold year-over-year. The total value of 2012 home sales was the greatest since 2007.
December represented the sixth consecutive month of an increase in the total value of all single-family homes sold year-over-year. The total value of 2012 home sales was the greatest since 2007.
Inventory
We enter the new year with only 860 single-family Flagler County single-family homes listed for sale in the Flagler MLS, down from 1,000 at the beginning of 2012, and from over 2,500 during the depth of the Great Recession. Real estate is a supply and demand market. All other factors being equal, a smaller inventory (supply) will tend to lead to increased prices.
We enter the new year with only 860 single-family Flagler County single-family homes listed for sale in the Flagler MLS, down from 1,000 at the beginning of 2012, and from over 2,500 during the depth of the Great Recession. Real estate is a supply and demand market. All other factors being equal, a smaller inventory (supply) will tend to lead to increased prices.
Days on market
DOM is the time interval from the date a home is listed until it’s posted on MLS as a "Pending" sale. A low DOM is an indication of a stronger market. DOM has declined consistently from 155 in 2009 to 63 in 2012.
DOM is the time interval from the date a home is listed until it’s posted on MLS as a "Pending" sale. A low DOM is an indication of a stronger market. DOM has declined consistently from 155 in 2009 to 63 in 2012.
Absorption rate
Absorption rate is considered a good measure of the strength of a given market segment. It measures the number of months of inventory available given current selling prices and demand. Typically, an absorption rate higher than 7 (month’s supply) indicates a buyers’ market while one less than 4 signals a sellers’ market. Normal is between 4 and 7. Most local segments are at or near the "sellers’ market" level.
Absorption rate is considered a good measure of the strength of a given market segment. It measures the number of months of inventory available given current selling prices and demand. Typically, an absorption rate higher than 7 (month’s supply) indicates a buyers’ market while one less than 4 signals a sellers’ market. Normal is between 4 and 7. Most local segments are at or near the "sellers’ market" level.
The table below shows metrics of several different Palm Coast/Flagler County market segments. In addition to absorption rate, it shows the percentage of sales comprised of distressed properties (short sales or lender-owned sales) and cash sales. You can see that absorption rates tend to be lowest among the market segments with the highest percentage of distressed sales.
|
|
Units |
Median |
|
Distressed |
Cash |
Absorption |
|
Community/Development |
Sold |
Price |
$/SF |
Sales |
Sales |
Rate |
| HOMES | ||||||
| Palm Coast |
1,764 |
$117,250 |
$64.00 |
51.1% |
52.8% |
4.2 |
| Belle Terre |
55 |
$104,000 |
$56.58 |
63.6% |
60.0% |
3.9 |
| Cypress Knoll |
78 |
$151,755 |
$76.00 |
44.9% |
51.3% |
4.8 |
| Grand Haven |
68 |
$295,000 |
$121.50 |
19.1% |
48.5% |
8.8 |
| Indian Trails |
262 |
$112,250 |
$62.00 |
52.3% |
47.3% |
4.0 |
| Lehigh Woods |
243 |
$106,000 |
$59.14 |
62.6% |
53.9% |
3.2 |
| Matanzas Woods |
87 |
$123,656 |
$59.57 |
60.9% |
48.3% |
4.1 |
| Palm Coast Plantaion |
14 |
$297,500 |
$106.00 |
57.1% |
71.4% |
3.4 |
| Palm Harbor |
287 |
$150,000 |
$79.50 |
36.9% |
59.2% |
5.1 |
| Pine Grove |
190 |
$105,000 |
$58.06 |
56.3% |
57.4% |
2.5 |
| Pine Lakes |
195 |
$119,900 |
$61.50 |
42.6% |
48.2% |
4.6 |
| Quail Hollow |
81 |
$105,000 |
$55.76 |
63.0% |
53.1% |
3.7 |
| Seminole Woods |
97 |
$115,000 |
59.02 |
54.6% |
40.2% |
3.6 |
| Woodlands |
29 |
$79,900 |
$53.65 |
48.3% |
62.1% |
4.6 |
| Hammock |
78 |
$338,500 |
$145.00 |
19.2% |
75.6% |
13.7 |
| Flagler Beach |
96 |
$228,650 |
$129.00 |
31.3% |
49.0% |
10.4 |
| Flagler County (all) |
2,018 |
$123,000 |
$66.50 |
48.5% |
52.9% |
5.2 |
| CONDOMINIUMS (all) |
347 |
$132,000 |
$103.16 |
45.2% |
79.8% |
7.3 |
| Bella Harbor |
13 |
$94,000 |
$52.15 |
76.9% |
92.3% |
1.8 |
| Canopy Walk |
15 |
$150,000 |
$108.93 |
66.7% |
66.7% |
8.0 |
| Cinnamon Beach |
24 |
$345,500 |
$197.00 |
41.7% |
62.5% |
8.5 |
| European Village |
13 |
$38,000 |
$31.20 |
61,5% |
100.0% |
0.9 |
| Fairways |
11 |
$58,000 |
$51.59 |
45.5% |
90.9% |
9.8 |
| Hammock Beach |
44 |
$300,000 |
$184.50 |
36.4% |
79.5% |
9.8 |
| Hammock Dunes |
28 |
$450,000 |
$183.00 |
32.1% |
60.7% |
20.1 |
| Palm Pointe |
21 |
$37,000 |
$37.00 |
76.2% |
100.0% |
4.6 |
| Surf Club |
24 |
$262,250 |
$171.00 |
20.8% |
70.8% |
8.5 |
| Tidelands |
36 |
$94,000 |
$75.00 |
83.3% |
94.4% |
2.3 |
| Woodhaven |
13 |
$64,000 |
$56.05 |
23.1% |
69.2% |
4.6 |
Source – Flagler MLS. Hammock homes include Hammock Beach, Ocean Hammock, Hammock Dunes and Island Estates. Hammock Beach condos include Hammock Beach Club, Hammock Beach Towers and Villas at Hammock Beach. Hammock Dunes condos include Cambria, Casa Bella, La Grand Provence, Le Jardin, Portofino, Savona, Tuscany and Viscaya. Palm Coast homes include Palm Coast Plantation, which is not within the city.
Perspective
Of course, it’s not a normal market, even in those segments with absorption rates between 4 and 7. Normal markets are not dominated by distressed property sales. Distressed properties hold down prices. Distressed sellers (banks owning repossessed properties and underwater homeowners) are impatiently "under the gun." They need to sell. They are unlikely to test higher price levels.
Of course, it’s not a normal market, even in those segments with absorption rates between 4 and 7. Normal markets are not dominated by distressed property sales. Distressed properties hold down prices. Distressed sellers (banks owning repossessed properties and underwater homeowners) are impatiently "under the gun." They need to sell. They are unlikely to test higher price levels.
Purchase funds come predominately from the mortgages in a normal market. Today’s mortgage market is far too restrictive. Tough underwriting and appraisal standards limit the buyer pool to those with access to cash and non-traditional funding or to those with outstanding credit.
In spite of record low mortgage rates, more than half of home purchases are cash sales, twice the normal level. This has been true for nearly three years. The condo market is more dramatically skewed. In both European Village and Palm Pointe, 100% of 2012 purchases were cash. Among all condos, cash was king in nearly 80% of all transactions
If you are waiting for prices to return to their former high, sit down, take a deep breath and reset your expectations. Since their all-time highs, the number of Flagler homes sold dropped 57% from 2,914 in 2005 to 1,254 in 2007. Back above 2,000 in 2012, the number of homes sold is still off by 31%.
Even more dramatic are the changes in median price and total sales volume. Median price dropped from $259,950 at the end of 2005 to $120,000 in 2011. While it’s nice to see median price creeping up, 2012’s median $123,000 is still 52.7% off the peak.
The total value of home sales plummeted from the 2005 tally of $792.7 million to $235 million in 2010. 2012’s preliminary total of 313.4 million remains 60.5% below 2005 levels.
Looking forward to 2013
2013 will be the year for European Village. KoKoRo and Yo Belle Frozen Yogurt recently opened there. A new deli, a Mexican restaurant (Burrito 101) and a French restaurant will be opening soon.
2013 will be the year for European Village. KoKoRo and Yo Belle Frozen Yogurt recently opened there. A new deli, a Mexican restaurant (Burrito 101) and a French restaurant will be opening soon.
The number of homes sold will increase by at least 15%
The median selling price will increase by at least 5% and more likely by 10%. Price appreciation will be greater in some condo markets. Each increase in selling price will unlock more potential buyers from the pool of formerly underwater homeowners. This group will be free to sell their present homes. Their lenders will no longer be an unwanted participant in the negotiations.
Property assessments will remain about the same since assessments lag by one year. 2013 assessed values will be based on property values established by sales in 2012, which were essentially flat from the previous year. Therefore, taxing jurisdictions will have another year of wrestling with millage rates to meet budgets.
Tourism will continue to expand in Flagler County. Increasing bed tax revenues will fuel more tourism-focused advertising, thus perpetuating further growth.
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