2018 Real Estate Year in Review – Inventories and Absorption Rates

Unlike 15 years ago, Palm Coast and Flagler County are not out in front of the national real estate market. They are following at a nice steady pace, and that’s a good thing.

PALM COAST, FL – January 21, 2019 – Unlike 15 years ago, Palm Coast and Flagler County are not out in front of the national real estate market. They are following at a nice steady pace, and that’s a good thing. While other areas of the country have surpassed their housing bubble pricing peaks, the local market remains shy of that goal.

Single-family Homes

Flagler County single-family home sales (MLS-reported) totaled 2,485 in 2018, up 6.5% from 2,334 reported in 2017. This marks an uptick from a year ago when 2017 home sales exceeded 2016 home sales by only 3.8%. This, while other areas of the country are reporting sales slowing down.

Median selling prices are also on the rise. The 2018 median selling price was $227,000, up 4.7% from $216,900 in 2017. The median selling price in 2016 was $200,000. The total value of single-family home sales for 2018 was $670,900,421, up 10.65% over 2017.

1,149 single-family residential building permits were issued during 2018. That’s a 17.2% increase over the number of 2017 permits. More important, the number of duplex permits issued rose 276.7% to 83. Duplex permits increased the total new residential dwelling units to 1,315, or 27.2% greater than in 2017.

Top Gainers (2017 to 2018)

The overall county median selling price for single-family homes rose 4.7% from 2017 to 2018. The top median price increases were all within traditional Palm Coast subdivisions; Woodlands 18.4%, Matanzas Woods 14.9%, Lehigh Woods 14.3%, and Belle Terre 13.3%. Only Woodlands (138.6%) and Belle Terre (121.4%) have seen post-recession prices more than double levels seen at the bottom of the market in 2011.

The smallest median year-over-year price gains were registered in Flagler Beach -2.2%, Seminole Woods 1.0%, Grand Haven 3.5%

Inventory and Absorption Rate

The inventory of single-family homes available for sale through MLS remains in the low to mid 800s, about where it has been for the past few years. The overall absorption rate for the county was 4.0 (four months of sales inventory), but the absorption rate for selected markets within the county varies, illustrating the connection between absorption rate and median selling price.

Absorption Rates by Community

All the original Palm Coast subdivisions have absorption rates below the overall county level. Woodlands and Belle Terre have the two lowest absorption rates and represent two of the lowest three median priced markets (the last bastions of affordability).

Inflation Warnings?

The underlying value of all real estate is the value of the land. Palm Coast lots are similarly sized and there are still over 15,000 undeveloped within the city. They are the closest thing to a commodity in the Flagler market.

Over a decade ago, the first sign that the local market was overheating was when Palm Coast lot prices suddenly shot up as builders scrambled to grab inventory. By the end of 2005, the median price of a Palm Coast lot (excluding those on a salt water canal) reached a staggering $76,100. Today, lot prices remain subdued. Palm Coast lots sold for a median price of $20,000 in 2018, up only $1,000 from the previous year.

Affordability remains a deterrent for many potential home buyers. That aside, the local market is in pretty good shape.