The numbers indicate a healthy market with rising home prices but with a shortage of affordable inventory. New construction, hampered by a skilled labor shortage, still lags rising demand.
PALM COAST, FL – October 23, 2017 – The Flagler-Palm Coast real estate market is unquestionably healthy. Like most coastal markets, ours encompasses a broad range of prices. Sales of a relatively few high-priced homes skew statistics and distort the overall picture.
While Beachside properties account for only 10.9% of the total Flagler County homes sold (year to date through September), they represent 20% of the total sold value. High-end properties also take longer to sell. This affects both average Days on Market (DOM) as well as the absorption rate.
Home Sales by Market Segment
The overall DOM for Flagler County for the first nine months of 2017 is 79 days. DOM’s for the various market segments range from a low of 49 days for the under $100K segment to 250 days for homes sold for more than $1M. Average DOM for Beachside homes is 115 days. Average DOM for currently listed homes ranges from 13 days to 151 days. The average DOM for all currently listed Flagler County homes is 112 days.
The first nine months of 2017, the overall average price per square foot for all single-family Flagler County homes sold via MLS was $125.68. Yet, the three bottom segments of the market (those below $300,000), which represent 77.5% of all sales, sold for significantly less than the overall average price per square foot. Here is where the inventory shortage is most apparent. The three bottom segments make up only 60.1% of all listed properties. Compare with the first nine months of 2012 when 91.0% of all homes sold were below $300,000 and with an average DOM of 113.
Price per Square Foot by Market Segment
Absorption Rate, also referred to as Months Sales in Inventory, varies widely from sector to sector. The overall Flagler County rate is 4.4 months of sales in inventory, but that is misleading, The real picture shows months sales not as a single number, but as a broad range from 1.9 for the under $100k segment and only 2.1 for the $100K to $199K segment up to 15.0 for the >$1M segment. Clearly, there is a severe inventory shortage of affordable homes.
Percent of Sales by Market Segment
First nine months summary
There were 1,784 homes sold, 2,35% above the same period one year ago. The modest rise in homes sold signals that the market has found a level at which it is comfortable. The main driver of increased sales going forward will be from a continuing increase in net new population.
Meanwhile, the lack of sufficient new home inventory will continue an upward pressure on prices. The median price YTD is $215,000, representing a 10.55% increase. The glaring absence of multi-family building permits (none this year) shows a poor response to the need for workforce housing. Fortunately, a few multi-family projects are currently in the planning stage.
There is a correlation between median prices and the level of distressed property (short sales and foreclosed properties) in the market. The percentage of sales this year attributed to distressed properties is only 4.2%; below the national average. This compares to 9.4% one year ago. This year’s 213 new foreclosures is fewer than the 278 of one year ago. Another important measure is the number of foreclosure completions. A foreclosure is completed when the lender or another bidder takes title to a foreclosed property. The Clerk of Court issues a Certificate of Title (C/T) to the successful bidder. There were 172 C/Ts issued through September, down from 241 one year ago.
Builders are gradually picking up the pace of new construction but remain hampered by a severe shortage of qualified construction laborers. There were 694 single-family residential building permits issued through September 2017. That is an increase of 21.1% from the same period in 2016.