Florida Palm Coast/Flagler Real Estate Newsletter – January 2009
December was a relatively strong month for the housing market in Palm Coast, Flagler County Florida
Palm Coast, Florida – January 11, 2009 – December ’08 sales of single-family residential homes in Flagler County, Florida surpassed those of December ’07. The number of homes sold through MLS rose 43% from 79 to 113. Even though the median price dropped 23.7% from $190,000 to $145,000, the total ’08 sales volume was still above ’07, rising 14.3% to $20.7 million. The total number of homes sold in ’08 edged slightly above the ’07 total by 1.2% (15 homes).
Median price is the price at which half of the sales are above and half below. A drop of 23.7% in median selling price does not mean that the value of all homes dropped by that amount. This is true for a couple of reasons:
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Median sale price reflects the segment of the market that is selling at the moment. Currently, sales volume is dominated by lender-owned and short sales. 65.5% of December home sales were lender-owned (from foreclosure) or short sales.
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Many homes sold under financial duress are in poor condition or sold "as is." In a few cases cabinets, appliances, and fixtures have been ripped out. Landscaping may be dead. Mold could be an issue. Swimming pools may be putrid. These properties do not reflect the value of well maintained homes.
At the beginning of this New Year, the inventory of unsold homes dropped by about 100, to 1,826 after a full year in the 1,910 to 1,950 range. The drop was similar to one experienced at the beginning of ’08. Many listings expired on December 31. The drop indicates the potential sellers who elected not to renew their listing in the face of low-priced competition. Real estate is a supply and demand market. Any drop in inventory, regardless of the reason reduces the number of options for buyers, adding strength to the overall market.
Of the 113 homes sold in December:
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39 (34.5%) were neither foreclosed nor short sales at a median selling price of $164,000. The average Days on Market (DOM) was 121 days.
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45 (39.8%) were short sales at a median price of $145,000. DOM = 201
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29 (25.7%) were lender-owned. Median price = $125,000. DOM = 54
Of the 1,826 homes listed for sale as of January 1:
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1,223 (67%) were neither foreclosed nor short sales. Median listing price = $289,000
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541 (29.6%) were short sale listings. Median listing price = $139,900
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63 (3.5%) were lender-owned. Median listing price = $179,000
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727 (39.8%) were listed as "vacant" at a median listing price of $199,000
The current absorption rate is:
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Neither foreclosed nor short sale – 31.4
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Short sales – 12.0
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Lender-owned – 2.17
The absorption rates indicate that the market is disposing very efficiently of distressed properties – a good sign. Lenders have finally beefed up their loss mitigation departments to deal efficiently with the huge number of short sales and foreclosures. Meanwhile, some in the real estate community have also learned to handle the complexities of these unique transactions.
I’ll be really surprised if the first quarter of ’09 doesn’t show an improvement over the first quarter of ’08. While good credit is certainly a requirement for new mortgages and refinancing, the 30-year fixed rate is about 5%, the lowest in years. In another positive trend, many lenders have decided it’s cheaper in the long run to renegotiate existing mortgages when possible to avoid foreclosures. This trend will reduce the number of short sale and foreclosures entering the market.
Informative Article
Just had to let you know Toby, that I find your articles well written, and very informative. I would never know anything about all you share, if not for your newsletter.
I can’t read them all, but do read most of them.
After reading this one, I just had to tell you how much we all should appreciate the time and research you put into all these informative articles.
I know if I did this….I would appreciate some positive feedback.
You have mine!
Loan modifications
"In another positive trend, many lenders have decided it’s cheaper in the long run to renegotiate existing mortgages when possible to avoid foreclosures. This trend will reduce the number of short sale and foreclosures entering the market."
And that is the word that needs to get out there. More people need to be encouraged to utilize that option vs giving up and doing a short sale. There ARE options!