Non-distressed home prices are up 13.4% in one year but still 25% off bubble highs. But the inventory of homes 4 sale represents only 4.8 months sales and new foreclosures are down 1/3 Y-T-D.
Palm Coast, FL – August 14, 2014 – Palm Coast’s metro housing market continues to normalize; healthy, but not too hot. Non-distressed median home selling prices are up 13.4% year-over-year to $195,000, but remain 25% below housing bubble prices. Economic news continues to improve locally. (The Palm Coast metro area comprises all of Flagler County.)
The chart depicts Palm Coast metro’s housing boom/bust cycle to date. It’s quite dramatic, considering prior housing cycles were typically 18 to 24 months in duration with the bottom of each cycle being no more than 10% below the previous peak.
The number of homes sold has leveled off slightly above pre-bubble levels of 2003 while the median price has moved above 2003 levels. In fact the median price of non-distressed homes (more representative of the pre-bubble market) is at $195,000, equaling late 2004 prices.
The picture is not complete because it shows only sales reported through the Flagler Multiple Listing Service (MLS). It does not include most new home sales, which are typically sold outside MLS. The years from 2009 to 2011 averaged only 154 new-home building permits per year. More than double that number have been issued through July 2014.
Here is how July 2014 compares to July 2013.
All home sales
- 13.16% fewer single-family homes were reported sold through the Flagler MLS (198 vs. 228).
- The total sales value (revenue) of home sales increased 1.58%.
- That’s because the median selling price rose 6.45% ($155,000 to $165,000) and the average selling price per square foot rose 11.32% ($90.58 to $100.83).
- 44.4% of July 2014 homes sales were with cash, down slightly from 45.6% one year ago.
- In 2013, short sales accounted for 14.5% of all home sales and 11.5% of sales revenue.
- In 2014, short sales were discounted (median selling price) 44.6% from non-distressed sales. In 2013, short sales were discounted only 27.3%.
- Total revenue from short sales in 2013 comprised 11.5% of the total revenue from all home sales. Total short sale revenue in 2014 dropped to 4.5% of all home sales.
REO (foreclosed sales)
- Foreclosed sales continue to make up a significant segment of the market, as they have throughout 2014; 25.8% in July 2014 vs. 10.87% one year ago.
- REO represented 18.0% of July 2014 total revenue, compared to 15.8% last July.
- 2014 REO sales were discounted 38.1% from non-distressed sales. This compares to 22.7% lower than non-distressed selling prices in July 2013.
- The non-distressed segment is most representative of a normal market. Its share of home sales has risen from 65.4% one year ago to 69.2% in July 2014.
- The median price of non-distressed homes rose from $172,000 to $195,000.
- The average selling price per square foot rose from $101.30 to $113.76.
- Since the discount for both short sales and REOs has increased, it’s apparent that buyers are willing to pay a greater premium for non-distressed homes. This could be, in part, because the quality of distressed homes on the market has deteriorated.
- Fewer foreclosure filings coupled with more foreclosure completions translates into fewer properties in foreclosure. At the current rate, I expect the level of distressed properties to approach normal (minimal) levels in about 18 months. Meanwhile, their affect on the market will diminish gradually.
- ULTA Beauty’s decision to move into the Town Center space formerly occupied by Books-A-Million signals that the Palm Coast area is being view by more upscale retailers.
- Increased single-family home starts and permits for Palm Coast Landing Apartments signal confidence that Palm Coast’s population will continue to rise.
- Palm Coast is getting more national recognition. See “City of Lists” article.
- The Central Intelligence Agency’s Invitational Golf Tournament and Charity Dinner/Auction will bring several high profile military, corporate and entertainment individuals to The Club at Hammock Beach in March.
Be sure to catch my new radio show, “Real Estate Matters” every Sunday morning at 9:00 A.M. on WNZF Radio. If you are out of the area, you can listen live on WNZF.com. Or you can catch the show later on podcast. The most recent show is under “other news” on the GoToby.com home page. My co-host is David Alfin, Watson Realty. Our guest this Sunday is commercial real estate specialist, Margaret Sheehan-Jones, CCIM. We will be talking about Palm Coast’s increased visibility among commercial site-selectors.