Explaining Flagler County’s Hot Real Estate in the Face of a Pandemic

The number of Pending listings exceeds the number of Active listings. Prices are on the rise. So too are building permits. How does this happen amidst a pandemic and a still crippled economy?

PALM COAST, FL – October 13, 2020 – Amidst a pandemic and a semi-closed economy, Flagler County’s real estate and construction markets have generously outperformed last year’s results. Selling prices are climbing and building permits through September are 29.8% ahead of the same period last year.

Home sales suffered a brief dip when the economy was shut down by Covid-19 but it recovered with a strong V-shaped recovery. It remains strong. Other than a brief dip in April, residential building permits have plowed ahead of last year too.

Think of the MLS single-family home listings as having three piles:

  1.  The first pile is filled with Active listings. Typically, Flagler County has between 825 and 950 active single-family listings.
  2. Once a sales contract is signed by both buyer and seller, the listing moves to a Pending pile for the satisfaction of contingencies (financing, inspection, etc.) prior to closing. Since the closing period is typically 30 to 60 days, the pending file will reflect 30 to 60 days of future closings, or about 375 to 450.
  3. Once the contract closes, the listing moves to the Sold pile.

What happened after the sudden shutdown-induced dip in home sales in May was a surprise.


Although Real Estate and Construction were deemed essential economic activities, many potential sellers remained on the sidelines, unwilling to have open houses or potential buyers walking through their homes. Others pulled back their listings or stayed on the sidelines because they feared an impending recession would lower housing prices.

The inventory of Active single-family Flagler County MLS listings shrank dramatically since late Spring, dipping below 700 homes for the first time since GoToby.com has tracked this metric, then below 600 homes only six weeks later, reaching as low as 513 in September. There are currently 536 Active Flagler County single-family listings and 608 Pending listings.


The pre-pandemic economy, nationally and locally, was extraordinarily strong. Flagler’s rising housing market was being driven by sound fundamentals: a steadily growing population, low-interest rates, and end-user buyers rather than housing bubble speculators. Tax law changes limiting state and local income tax deductions and real estate tax deductions had already heated up the market in southern, low tax states. Florida has become the prime beneficiary of tax-driven migration, primarily from the northeast and upper Midwest (and even the west coast).

The Covid-19 pandemic was closely joined by months of continuing civil unrest and violence, giving those in the most affected states and cities pause to reconsider their mortality, their family’s safety, and their lifestyle priorities. Maybe it’s time to retire or, at least, buy a retirement home now as a second home.

Not coincidentally, those who were most affected by high Covid-19 death rates and urban violence are from the same high tax states and cities already experiencing tax-induced population drain.

Now add in the working from home phenomena. Workers and their employers learned from the Covid-19 shutdown that many employees, enabled by today’s highspeed Internet, can be fully productive working from home. That means that employees can live anywhere.

A Sense of Urgency

Already strong demand is augmented by a pandemic and riot motivated surge of buyers. The surge is met by a quickly depleting supply of available homes. Buyers do not care that the inventory shortage is due, in part or largely, to temporarily withdrawn sellers. They only care that there is a slew of buyers competing with them for a dwindling supply of available homes. That is a recipe for a frenzied market.

Since mid-August, the pile of Pending listings has been larger than the pile of Active listings. A few weeks ago, the number of Pending contracts exceeded the number of Active contracts by more than 100. This is simply unheard of.

Great Place to Land

31.2% of Flagler County’s population is aged 65 or older, well above Florida with 20.9% and nearly double the U.S. percentage at only 16.5%. Despite the county’s Covid-susceptible demographics, the county has consistently ranked among the least affected by the virus with low positivity and death rates. And look at what you can buy for one or two million dollars here.

All real estate markets are local. In Flagler County, the six months from September to February have traditionally registered the fewest closings of the year, but the strength of this year’s rebounding market has defied the historical norm. Here is how the 2020 recovery stacks up against 2019 (which was also a good year):

Increases are evident in all areas of the market but are most notable in the upscale sector.

  • In the entire year of 2019, 29 single-family Flagler County homes were sold through MLS for more than $1,000,000. Only one was sold for more than $2,000,000.
  • During 2020 year-to-date, 30 homes went for more than $1,000,000. Eight were sold for more than $2,000,000.
  • During July, August, and September alone, 18 sales exceeded $1,000,000. Six sold for more than $2,000,000
  • Most of these sales occurred within the Hammock Dunes CDD boundary which includes Hammock Dunes, Island Estates, Marine Harbor Village, Cinnamon Beach, Ocean Hammock, and Hammock Beach.
  • Only five condominiums sold for more than $1,000,000 in 2019 while eight have sold already in 2020. All were within the Hammock Dunes CDD.

This makes perfect sense. Wealthy people are simply more mobile. They have financial reserves. They do not have to wait until their present home sells before buying another home. Over time, an increasing number of less affluent potential buyers will be following.

The upward trends have not gone unnoticed. Vacant lot sales in The Conservatory have been sluggish for years, but the community has begun to grow with about 50 rooftops in evidence. The Tom Watson-designed golf course is doing well. The new Matanzas Woods Pkwy Interchange and Palm Harbor Pkwy realignment have boosted the community’s access and development of the north side of town has increased.

During 2019, a total of 11 vacant Conservatory lots were sold. Year-to-date in 2020, the number of lot sales increased to 55. Of note, eight were sold in August and 36 in September at a median selling price of only $25,000. Grand Haven, although nearly built out, is in many ways comparable to The Conservatory with similarly priced homes and its own Jack Nicklaus Signature golf course and typically larger lots. Year-to-date sales in Grand Haven total only 14 lots but with a median selling price of $90,000 per lot. The disparity between The Conservatory and Grand Haven pricing is not rational. Someone has taken note and jumped into the market.

New Construction

Builder confidence is high with several spec homes being sold before completion. Through September, the permiting numbers are:

  • Single-family home permits – 1,147, up from 896 one year ago.
  • Duplex permits – 82 (164 living units), up from 57 (114 living units) one year ago.

However, increased materials costs and a shortage of qualified labor is cutting into builders’ margins. Framing lumber costs have risen 300% recently. Rising prices, whether on existing homes or new construction are beginning to effect appraisals, and therefor mortgage availability. When a buyer’s target purchase does not appraise at, or near, the contract price, lenders require a higher down payment. Still, mortgage rates are at record lows, below 3%.

Multi-family Coming Back

After a 50-month dearth of multi-family new construction in Palm Coast and Flagler County, two apartment projects totaling 321 units have been completed in Town Center. Both are experiencing remarkably high demand. Palm Coast had additional multi-family projects in various stages of the entitlement and permitting process include:

  • Aviara of Palm Coast – 256 market-rate apartment units on the east side of US 1 north of White View Pkwy
  • Matanzas West – 285 apartment units at the southwest corner of Matanzas Woods Pkwy and Belle Terre
  • The Trails – 274 Townhomes on the west side of Belle Terre south of Matanzas West
  • More market-rate multi-family units are being planned for Town Center.
5 replies
  1. Toby
    Toby says:

    Reply to Trudy

    Thank you for your comments.
    Traditionally, December has been a slow month for selling, but in the past few years, there has been an increase in the number of recorded sales (closings) in December, probably for tax reasons. But remember that closings lag contract signings by 1-2 months, so look at January and February closings as a measure of December sales activity.
    Having said that, I think the strong upward trend we are on will continue through the winter months. Of course, the election could change that.

  2. Mark Good
    Mark Good says:

    Lumber prices

    On today’s radio show Toby mentioned the price of Lumber and I wanted to share what I found out when I looked into it. On Bloomberg TV they will show the Lumber prices once in awhile but I checked the Wall Street Journal and see that it closed at $534 per 1,000 board feet on Friday 10-16.
    As Toby said the price hit $800 and that was at the end of August but for some reason we have seen a steady decline to the current levels.

  3. Mark Good
    Mark Good says:

    Lumber prices

    On today’s radio show Toby mentioned the price of Lumber and I wanted to share what I found out when I looked into it. On Bloomberg TV they will show the Lumber prices once in awhile but I checked the Wall Street Journal and see that it closed at $534 per 1,000 board feet on Friday 10-16.
    As Toby said the price hit $800 and that was at the end of August but for some reason we have seen a steady decline to the current levels.

  4. Trudy Tappan
    Trudy Tappan says:

    Excellent article


    Your analysis of the current real estate market is a compelling and interesting one. You Pod Casts are equally informative. Thank you for your articulate and well researched narratives.

    What do you predict for December? I’ve heard that December is a terrible time to sell a home, but 2020 may be different because of less supply. Your thoughts?

  5. Mark Good
    Mark Good says:

    Conservatory Lots

    Toby has mentioned the accelerated activity on the lots in Conservatory so I have dug into the MLS data to see who is buying them. I have found the following builders have bought these number of lots:
    ICI 30
    Saltwater 4
    Seagate 1
    Bellagio 1
    One agent at Caldwell Banker has sold 4 lots but don’t know if they are representing a builder.

    Price levels are telling. It appears builders have concentrated on lower priced lots as
    32 lots have sold in the $20s
    10 have sold in the $30s
    4 have sold in the $40s
    1 has sold in the $50
    The two highest priced lots have closed in the last week.

    Pending lots are also interesting:
    Asking price in the $30s 2
    Asking price in the $40s 2
    Asking price in the $50s 2
    Asking price in the $60s 1
    Asking price in the $80s 1

    Active listing
    The four lowest priced listings are $34,900, $46,900 (2), $49,000 and the other 26 listings range from $51,900 to $115,000.

    I expect we will see some model homes being built soon.

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