Short sales and REO made up 39% of April Flagler home sales and only 32% of May sales. The inventory of distressed homes available is shrinking
Palm Coast, FL – May 30, 2013 – The Palm Coast and Flagler County real estate market is definitely breaking out of the pattern followed for the past several years and is shifting into a new gear. The number of homes sold monthly has been rising year-over-year for more than five years but seems to be leveling off due to the shrinking inventory of bargain-priced distressed properties. The median selling price ($140,000) is climbing and the total value of all home sales (total sales) is strong. May closings will be belatedly posted to MLS for the next several days. Even so, it looks like there will be fewer closings this May than during May 2012. Median selling price and total sales, however, will easily exceed those of a year ago.
What’s changing? For the first time since the crash, the inventory of homes listed for sale through MLS is no longer shrinking. Currently, 774 single-family Flagler County homes are listed for sale. At this time last year, there were 728. The 571 homes “under contract” June first is less than the 662 under contract one year ago. This doesn’t signal a slowing market. To the contrary, it is the result of a stronger market; one with fewer distressed properties and with rising prices.
The percentage of home sales comprised of distressed sales is shrinking. It has been in the 50% range since 2009 as short sales and REOs dominated pricing. In April, the percentage had shrunk to 39%. That component shrunk again in May, making up only 32%. Only 12.8% of today’s MLS-listed single-family homes are distressed.
Median selling prices are rising and well-priced homes are selling quickly. This opens up selling opportunities to many who could not or would not sell at the bottom of the market or were locked out of the market because they were underwater. Each uptick in value releases more potential homes for sale. In fact, 87.2% of listed homes are non-distressed.
Building lot sales are a good indicator of buyers’ plans to build in the near future. In 2008, only 230 building lots were sold through MLS in Flagler County. (The fewest number of homes sold was in 2007.) Lot sales have grown consistently since; 292 in 2009, 298 in 2010, 392 in 2011 and 598 in 2012. Year to date, there have been 320 lots sold, an annualized rate of 768. 37 building permits were issued in May, compared to 23 in May 2012, 17 in 2011 and 12 in 2010.
The condominium market is likewise short of inventory for sale, especially of distressed bargains. With only 240 units for sale in the county, Canopy Walk has only three, as does Tidelands, where some units have shown recent value increases of 50%. Several condominium units remain entitled (to be constructed) from developers’ efforts before the crash, but remarkably, there are no new condominium units currently under construction. It’s unlikely that we will see any newly built condominiums come onto the market for two more years. Until then, expect further price appreciation in existing condominiums.
Note: If you are retirement age, two years represents about ten percent of the rest of your life; probably the best ten percent from a health and vitality standpoint.
On the commercial front, two new dollar format stores have recently opened. Rumors about a sale and rebuild of the Palm Harbor Shopping Center gathered more steam recently as survey stakes began to appear. Boundary surveys are expensive. They are not typically performed until a complex deal has already weathered the storms of the due diligence process.