It’s not just a housing market. It’s an existing home market and a new construction market. It’s also a condo market, a vacant lot market, and a vacant land market. Each segment has its trends.
PALM COAST, FL – December 8, 2021 – Who would have predicted one year ago that the median selling price of an MLS-listed home in Flagler County would increase by 32.2% in the next 12 months, from $260,000 in November 2020 to $343,750 in November 2021? The annual increase in home values exceeds the median county household income by about $25,000.
It’s not just a housing market. It’s an existing home market and a new construction market. It’s also a condo market, a vacant building lot market, and a vacant land market. Each segment has its own trend indicators.
Flagler’s housing market has been on a tear since June 2020, after a brief six-week pandemic initiated pause. The runup gained momentum after year-end and the pace of median selling price increases has accelerated, reaching year-over-year monthly gains greater than 20% in all but two months since May.
There are signs that we are moving towards a more normal market; a good thing because 20-30% price gains are unsustainable. In April, the number of homes listed for sale on MLS was a mere 180. The number of homes in the “Under Contract” category peaked in May at 717 homes. Today, the number of available homes has risen to 292 while the contract pending pile has shrunk to 579; better, but still far from normal. In the market preceding the pandemic, by comparison, there were well over 800 homes for sale and fewer than 400 homes under contract.
Unlike commonly thought, the dearth of homes available for sale is not due to a lack of willing sellers. The Flagler MLS logged a monthly average of 309 newly listed homes in 2019 and 304 new monthly listings in 2020. Through November, an average of 335 homes have been listed per month in 2021.
There are fewer homes available because the listings are selling so quickly. The market was already robust in 2019 when the median Days on Market (DOM) stood at 45 days. DOM dropped to 38 days in 2020 and through November of 2021 is only 12 days.
Homebuilders face severe headwinds as they strive to pick up the slack: labor and material shortages, materials price volatility, and delivery delays for things like windows and appliances. The number of regulatory hoops associated with land acquisition, entitlement, site preparation, and construction has stretched development schedules. A few production builders have resorted to building on scattered lots to keep their production business and supply chain active because of a lack of pad-ready tract lots.
Through November, 2,473 single-family permits have been issued along with 160 duplex permits (320 residential units) for a total of 2,793 units., representing a 67% increase over the same period one year ago. Soon to be completed plus recently completed site work in several master-planned communities assures robust growth next year as well.
- Grand Landings, phase 4 has been cleared with new homes under construction by Dream Finders. Phase 4 (off Citation Blvd) consists of 186 new building lots.
- Whiteview Village, phase one site work is completed. This new community is between Pine Lakes Pkwy and Whiteview Pkwy. Building permits for the first homes have been issued to the builder, KB Home. At buildout, the community will have 205 homes.
- The Trails is a 274-unit townhome project on Belle Terre north of Indian Trails School. Site work is nearly complete. DR Horton is the developer.
- There is active home construction in two 55+ communities. Hammock Real Estate’s American Village (off Pritchard has 45 single-family lots and pad sites for three multi-family buildings (96 units). Seagate is selling home/lot packages within their Matanzas Lakes community (off Laramie Dr) of 107 homes.
- Phase one of Sawmill Creek (US 1 North) is nearly built out with 259 home sites. The site work for phase two with 493 home sites is nearly completed. DR Horton is the developer of phase two and successive phases. Sawmill Creek will have over 2,000 residential home sites when built out.
- Site work is completed at Beachwalk, a 50-homesite community on Jungle Hut Rd in The Hammock. Model homes are expected soon. The builder is Richmond American Homes.
- Two new communities at Matanzas Shores (across A1A from the Surf Club condominiums) are filling up with new homes. Las Casitas, by KB Home, will have 97 homes. Las Lagos, by Richmond American Homes, will have 88 homes.
- Construction has commenced on ten new condominium units on A1A at the south end of Flagler Beach. The 3/3/1, 2,056 square foot Moonlight Beach Villas are being advertised at prices from $1.3M to $1.35M.
- Paytas Homes has opened sales and begun building the first of 184 single-family homes in The Gables, the first single-family home community within Town Center. Site work is complete for the initial phase.
- Toscana, a gated community on Old Kings Rd, is building out its final phase.
- Preliminary site work has commenced on the west side of south Colbert Lane, across from the old Lehigh Cement plant, for 240 apartments. The complex will be called Lighthouse Harbor Luxury Apartments.
- Grand Reserve, DR Horton’s development in Bunnell continues to build out at a furious pace. Sales have outpaced the development of new lots. Grand Reserve will have more than 700 homes when completed.
There are still more than 10,000 ITT-platted lots that remain vacant in Palm Coast. These are often referred to as infill or scattered lots. Several builders specialize in developing these lots. They require only clearing and fill to be made ready for construction and have remained, until recently, relatively inexpensive.
GoToby has long viewed the original ITT platted Palm Coast lots as a bellwether. Those not on a saltwater canal or golf course can be viewed as commodities. Two years ago, these standard 10,000 square foot lots were selling for a median price of $20,000. Like home prices, the PC lot prices began to climb in June 2020, reaching $30,000 per lot by the end of the year and reaching $58,000 per lot in September. Prices moderated during October and November to $55,500 and $55,000 respectively. The number of lots sold averaged 130 lots per month between September 2020 and May 2021. By November, the sales pace had slowed to 70 Palm Coast ITT lots sold. The PC lot market has leveled off.
Flagler’s condominium market is bifurcated with units within the Hammock Dunes Community Development District (HDCDD) representing the high end of the market. The median price in this sector has risen 28% from $451,500 in 2020 to $580,000 in 2021 YTD. Outside the HDCDD, condo price gains have been more moderate with median prices rising only 16% over the same period; from $231,000 to $268,000. Both sectors realized a decrease in DOM, 78 to 31 in the HDCDD to 49 to 17 outside the HDCDD.
As supply and demand tend toward equalization, the rate of home and land price increases should moderate. On the other hand, inflation and the imposition of higher impact fees will fuel continuing price increases. Housing affordability will become a more intractable issue.
These facts are not unique to Flagler County. They are present in nearly all housing markets, particularly in traditionally low tax states in the south and west. What remains unique is that the median home price in Flagler County remains below the median price in the state which, in turn, is lower than the national median home price.
In addition to the already under construction projects listed earlier, there are several projects moving through the zoning, entitlement, and permitting steps. These projects may not all reach fruition, but the total number of units involved easily exceeds 10,000. The pipeline will remain filled for some time to come.
There are areas for potential development on Old Kings Rd South of SR 100 containing entitlements for several hundred homes. They await a commitment to extend water and sewer services to this area. Look for that commitment to come soon.
Flagler County’s development has always been bounded by the availability of services (water and sewer) and by physical barriers (the Intracoastal Waterway, Interstate 95, and the East Coast Railroad. The area west of the railroad represents roughly 75% of the county’s area but it is not served by utilities and lacks transportation connections. The only highway in the county that bridges the railroad is SR 100. The east side is running out of development possibilities. The bathtub is filling up so to speak.
Opening the western county to development represents a challenge but at the same time, an opportunity for creative planning.