Metro Palm Coast pending sales are at the lowest level since GoToby started tracking this metric in 2011. Find out why.
Palm Coast, FL – September 5, 2014 – The number of Palm Coast metro single-family homes under contract at the beginning of this month was 396, its lowest level since GoToby.com began tracking this metric in 2011. This compares to 498 on September 1, 2011, 590 on September 1, 2012 and 496 on September 1, 2013. Pending sales is often considered a forward looking indicator.
Meanwhile, the National Association of Realtors• (NAR) reports that pending home sales are up nationally. The reason local pending home sales are down is most likely due the decrease in short sales, which can take several months to close (remaining on the pending list longer) and the increase in REO (lender-owned) sales which close quickly. Since Palm Coast was the poster child of the bubble and subsequent crash, it has had to deal with more distressed properties than the U.S. as a whole.
The number of Flagler County homes reported sold through MLS during August stands at 179 vs. 181 a year ago, essentially equal. But short sales this August represented only 7.3% of homes sold compared to 9.4% a year ago.
NAR’s Pending Home Sales Index,* based on contract signings, climbed 3.3 percent to 105.9 in July from 102.5 in June, but is still 2.1 percent below July 2013 (108.2). The index is at its highest level since August 2013 (107.1) and is above 100 – considered an average level of contract activity – for the third consecutive month.
Lawrence Yun, NAR chief economist, says favorable housing conditions are behind July’s higher contract activity. “Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 20121,” he said. “The increase in the number of new and existing homes for sale is creating less competition and is giving prospective buyers more time to review their options before submitting an offer.”
Yun adds, “More importantly, steady job additions to the economy are helping family finances and giving them added confidence to enter the market.”
The PHSI in the Northeast jumped 6.2 percent to 89.2 in July, and is 8.3 percent above a year ago. In the Midwest the index marginally fell 0.4 percent to 104.6 in July, and is 6.4 percent below July 2013.
Pending home sales in the South increased 4.2 percent to an index of 119.0 in July, and is now 1.0 percent below a year ago. The index in the West rose 4.0 percent in July to 99.5, but remains 6.0 percent below July 2013.
Yun expects existing-homes sales to be down 2.1 percent this year to 4.98 million, compared to 5.09 million sales of existing homes in 2013. The national median existing-home price is projected to grow between 5 and 6 percent this year and 4 and 5 percent next year.