Flagler Real Estate Stats for February ’09

Market strength continues but is still limited to the under $200 thousand properties.

Palm Coast, Florida – March 2, 2009 – The Palm Coast, Flagler real estate market continues to show signs of promise. The under $200 thousand segment remains the leader in the market adjustment. Sales are stable at 100 single-family homes sold in February. Prices are relatively unchanged and inventory is dropping. The high value segment of the market has yet to reach its bottom. This won’t happen until tested with financially distressed inventory hitting the market via short sales and/or foreclosures. This may be happening sooner than I had previously thought.
Lender owned (via foreclosure) and short sales continue to dominate the Flagler County housing market, representing a full 69% of units sold, the highest since I’ve been tracking this measure. Here are highlights of February single-family home sales as reported by MLS:
  • 27 lender-owned homes sold at a median price (half above and half below) of $116,900. While representing 27% of units sold, they account for only 23.7% of total dollar sales.
  • 42 short sale transactions were recorded at a median price of $140,000. This represented 42% of units sold and 38.7% of total sales.
  • The 31 homes sold that were neither short nor lender-owned sales traded at a median price of $180,000. They represented only 31% of units sold but comprised 37.6% of total sales.
  • 87% of short and lender-owned sales were below $200,000. 78% of all sales were below $200,000.
  • The inventory of homes for sale has dropped by nearly 100 since December to 1,734.
  • The number of pending and contingent contracts for single-family homes has risen by nearly 100 to 392 since the first of the year.

Absorption rates

Absorption rates further illustrate the varying strength in different segments of the market. The absorption rate for lender-owned homes is an astounding 2.26. Absorption rates below 4.0 signal a sellers’ market. For short sales, the absorption rate is 12.31 (above 7.0 is considered a buyers’ market).
A look at absorption rates across price segments is likewise revealing:
  • Total for Flagler County – 17.34
  • Under $200,000 – 9.76
  • $200,000 to $299,999 – 27.47
  • $300,000 to $499,999 – 46.33
  • Over $500,000 – 283.0
Clearly, the bottom segment of the market is the strongest. It has experienced a steady input of distressed properties for over 12 months. That’s because it’s the segment where most of the paycheck-to-paycheck homeowners live. Without any financial reserves, they fell quickly into default.
Owners of high value property tend to have deeper financial reserves, delaying the necessary price adjustments needed to find the market bottom. Recent foreclosure filings and foreclosure sales indicate that some of these owners too have exhausted their reserves.

Recent foreclosure sales

  • A Cinnamon Beach condo
  • An estate sized building lot in Grand Haven’s Wild Oaks community
  • A home in Grand Haven’s new north section
  • A building lot in Ginn’s Conservatory

March foreclosure sales scheduled

  • A Portofino condo in Hammock Dunes
  • A Surf Club II condo
  • A Surf Club III condo
  • A building lot in the Sanctuary
  • Waterside and Oceanside condos
  • An Intracoastal building lot in Grand Haven last purchased for $710,000
  • Two building lots in Ginn’s Conservatory
palm coast real estate flaglerAs with the less expensive market segment, the arrival of distressed properties will quickly establish the market floor for high value properties, a necessary step for a full market recovery. As I’ve said previously, the Palm Coast/Flagler market is leading the general market towards recovery. The Parade of Homes kicked off Saturday. It signals the start of the spring selling season, usually the years strongest period for sales.
Palm Coast continues to gain population. Economic development and job retention efforts are paying off. Problems in the overall financial market continue to have a dampening effect on home sales, but I believe the underlying conditions of our local market are strengthening. Pending sales are increasing. Inventory is decreasing. And builders have yet to start spec homes, meaning there will be no new construction inventory coming on-line for several months to replace sold units.
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