May Home Sales Confirm Palm Coast’s Improving Housing Market
Prices are still moving sideways, but the number of transactions continues to increase and absorption rates improve.
Palm Coast, FL – June 1, 2008 – I once said that we wouldn’t recognize the bottom of the market until months after it was reached since selling prices are not known until after closing, several weeks after the sales contract is signed. We also need to see more than one month’s data to confirm a trend. I previously postulated that we reached bottom in January. After compiling May’s results, I’m more confident that I was right.
135 Flagler County single-family residential homes sold through MLS in May, the highest level of units sold since 135 were sold in August 2007 and higher than any other month since September 2006. The $169,000 median selling price was consistent with the past four months, indicating the market has stabilized. As in recent months, bank-owned (foreclosed) properties and short sales made up a sizable part (40%) of the selling mix. Separating the categories gives a clearer picture.
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The median price of 41 bank-owned properties was $147,400. The Days on Market (DOM) was 102.
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The median price of 16 short sale properties was $145,000. DOM was 125.
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The median selling price of the remaining 78 homes was $215,000. DOM was 174. The median price of 134 homes sold in May 2007, before short sales and bank-owned properties entered the market, was also $215,000.
Absorption rate is also a useful measure of the real estate market. Absorption Rate is a mathematical measure of the relationship between supply and demand in the marketplace. It’s derived by dividing the total inventory of product (for sale) by the number of units sold in the previous month. The resulting number (absorption rate) represents the number of months it would take to sell the number of homes in the current inventory at the current price.
It’s generally believed that the absorption rate tells us if we are in a sellers’ market, a buyers’ market, or a normal market.
- Sellers’ Market – Rates 1-4
- Normal Market – Rate 5-6
- Buyers’ Market – Rate 7+
I analyzed the absorption rates at different price points for several Flagler County communities in Aug/Sept ’07. I did the same for Apr/May ’08. The ’08 rates are an improvement in almost every category.
|
Aug/Sep ’07 |
Apr/May ’08 |
|
| Cypress Knolls | ||
|
Under $200,000 |
18.0 |
7.0 |
|
$200,000 to $299,999 |
18.0 |
11.4 |
|
Over $300,000 |
18.5 |
14.0 |
| Indian Trail | ||
|
Under $200,000 |
15.0 |
7.0 |
|
$200,000 to $299,999 |
23.6 |
62.7 |
|
Over $300,000 |
22.0 |
44.0 |
| Lehigh Woods | ||
|
Under $200,000 |
25.4 |
8.5 |
|
$200,000 to $299,999 |
32.0 |
87.0 |
|
Over $300,000 |
22.0 |
N/A |
| Matanzas Woods | ||
|
Under $200,000 |
13.0 |
11.2 |
|
$200,000 to $299,999 |
12.8 |
12.0 |
|
Over $300,000 |
42.0 |
14.0 |
| Palm Harbor | ||
|
Under $200,000 |
7.5 |
6.1 |
|
$200,000 to $299,999 |
19.8 |
13.6 |
|
Over $300,000 |
36.8 |
69.5 |
| Pine Grove | ||
|
Under $200,000 |
12.8 |
10.7 |
|
$200,000 to $299,999 |
43.5 |
13.3 |
|
Over $300,000 |
22.0 |
24.0 |
| Pine Lakes | ||
|
Under $200,000 |
13.0 |
12.3 |
|
$200,000 to $299,999 |
17.2 |
13.6 |
|
Over $300,000 |
16.3 |
N/A |
| Quail Hollow | ||
|
Under $200,000 |
23.0 |
4.5 |
|
$200,000 to $299,999 |
86.0 |
32.0 |
|
Over $300,000 |
N/A |
N/A |
| Seminole Woods | ||
|
Under $200,000 |
17.6 |
9.6 |
|
$200,000 to $299,999 |
25.0 |
46.0 |
|
Over $300,000 |
N/A |
N/A |
| Flagler County | ||
|
Under $200,000 |
12.6 |
9.0 |
|
$200,000 to $299,999 |
22.6 |
20.9 |
|
Over $300,000 |
32.1 |
35.7 |
| Grand Haven |
16.1 |
12.7 |
| Hammock Dunes |
30.5 |
Another useful indicator – There are 310 pending sales of Flagler County single-family residential homes. Of these, 130 are short sales. By their nature, many short sales do not close because lenders do not accept the contract. Short sales represented only 12% of May sales. If we discount the pending sales accordingly (to represent only 12% of pending sales), there are still 205 sales pending. This is well above end-of-year levels.
I focus on single-family homes because they represent the core market, better representing current demand than do lots or condominiums. You can’t move into a lot. And condos are more likely to represent an investment, vacation or secondary residence.
Some areas of the market are still problematic. Conservatory lots continue to be an enigma with no sales to date even at lower prices. Foreclosures are starting to be seen among high end properties, both homes and condos. But both lot and condo markets are showing some strength by way of increased transaction volume although at lower price points. Just as Palm Coast began its housing slump months ahead of the rest of the country, it seems it will lead again on the market turn around.
Great analysis
Once again Toby, you have done a great job. Excellent info and analysis. Keep up the good work.
D.L.
Great analysis
Once again Toby, you have done a great job. Excellent info and analysis. Keep up the good work.
D.L.