Both the number of homes sold in the last two months and the total value of those sales are running below levels of one year ago while selling prices are rising.
Palm Coast, FL – May 12, 2014 – For the second consecutive month, both the number of Flagler County homes sales (as reported by MLS) and the total value of those sales fell below levels of one year ago. But the March/April median selling price of $151,000, was 8.4% higher than for the same two month period last year. For this year through April, fewer Flagler County homes have sold than during the same period one year ago.
Much has been written recently about the sudden surge nationally in cash sales, reportedly up to 43%. Flagler has been averaging roughly 50% all cash sales for a long time. Apparently bucking the national trend, the all cash component of March/April sales was 49.2%, above the national figure, but below last year’s 53.7%. Cash sales are sometimes attributed to investors, but can also be the result of hard to find mortgage money.
The slight dip in the number of homes sold could be worrisome. The first sign of the bubble’s burst in 2005 was a sudden decline in the number of homes sold. Buyers had virtually disappeared and sales dropped, from more than 300 homes sold per month for three consecutive months, to fewer than 200 homes per month only four months later.
Sales are running at approximately the same rate now as in 2004. It’s quite possible that we have settled into a normal market. In 2006, the inventory of unsold homes skyrocketed for lack of buyers and the abundance of panicked sellers. That’s not happening now. The current “for sale” inventory of Flagler homes (MLS) remains stable. The 1,005 available homes represents 5.6 months of supply at current prices; a fairly normal level.
Local real estate brokers are happy and hiring. People are entering or re-entering the profession. Someone told me “that means they are probably hiring at Home Depot.” Real estate classes are full. Local brokers report no decline in prospective buyers. All good signs.
New home starts are on the increase too; 175 in the first four months vs. 116 one year ago. Lot sales typically go hand-in-hand with new home starts. Most individuals and builders do not buy lots “for long term hold.” Lot sales have been stable over the past 16 months, with an average of 63 lots sold per month. In 2008, the average was only 19 lots per month.
When March/April condominium sales are compared to one year ago, the picture is similar to that of single-family residential homes. Slightly fewer units (11.5%) were sold this year but the median price is 11.3% higher.
Completed foreclosures continue to affect the market. The backlog of filed foreclosures is moving through the foreclosure process, which often takes years. 84 properties were sold at foreclosure auction in April compared to 60 in April 2013, and there were 50 new filings (vs.100 in April 2013). 46 homes (23.2%) that sold in April were foreclosed properties. They sold at an average discount of 23.5% from non-distressed properties. That’s a drag on the market.
But things are getting better. Distressed homes (short sales and foreclosed homes) accounted for 39.8% of April 2013 home sales. That improved to 28.3% this April.
I wish I had some positive news about the much talked about Palm Harbor Shopping Center redevelopment project, but I don’t. A site plan has still not been submitted, but the prospective buyer’s engineers remain in active contact with Palm Coast’s technical staff, indicating that the project is still alive.