November 2007 Newsletter – Still Cloudy with Little Sunshine

Single family home market moving sideways while condo and lots sales lanquish and prices continue to drop

November 13, 2007 – Palm Coast, FL – When I lived in Rochester, N.Y., there was a standard weather report which captured the typical day in that part of the country. I still remember it verbatim; “mostly cloudy with intervals of partial clearing.” That pretty much describes the current Palm Coast and Flagler County real estate market.

One ray of sunshine comes from the commercial sector. The addition of shopping and restaurant alternatives in Palm Coast will help spur demand for housing and keep sales tax dollars local. Here are some recent highlights:

• Both Lowe’s and Belk opened new stores in Palm Coast. A Golden Corral and a Japanese Steak House will soon be joining them in Cobblestone Village.
• Site clearing began at the new Publix site, Beach Village, at the corner of SR 100 and Roberts Road.
• Building permits were issued and construction has begun on the second phase of the Landing at Town Center, where the SuperTarget will anchor 435,000 square feet of retail space. The SuperTarget is well underway with a March ’08 opening planned.
• The Kohl’s retail complex plan was approved. It will be located across Belle Terre from Albertson’s. Construction should begin after the first of the year.

There is some good news on the residential side of the local real estate scene.

• The final hurdles were overcome to allow the conveyance of the former Palm Harbor golf course to the City of Palm Coast. Especially for Palm Harbor property owners, this is great news. By this time next year, they will again be looking out over a golf course rather than a field of weeds.
• The number of homes sold and the median selling price have shown slight decreases over the past few months, but importantly, the number of homes for sale has stabilized. In fact, the number of single family homes available for sale in Flagler County has fallen below 2,400 for the first time in months.
• While mortgage companies are more selective, rates remain low. This is a great time to buy a house.

*Data Source: MLS

The condo market remains soft with plenty of inventory available and only a few sellers lowering their listing price. Centex has sales contracts on the last of the Tidelands condominiums. Bargain hunters benefited from the aggressive pricing on the final units. Some units sold at prices below $200 thousand, including a Ginn golf membership, two years of dues, and two years of association fees. With the Centex inventory gone, it should be easier for other condominium sellers to find buyers (assuming they are reasonably priced).

Palm Coast lots and Flagler County homesites in general continue to suffer from eroding prices and dismal sales.

• The median price for Palm Coast Lots (excluding salt water canal lots) dropped to $37,500, less than half the peak price of $77,000 measured in January ’06.
• Conservatory lots remain a huge question mark. Listing prices on a few are now below $250,000 with no buyers yet. Perhaps the completion of the $15 million clubhouse in the spring and the fall PGA tour event will spur sales or building activity. A recent meeting with Ginn executives and Conservatory property owners went well, increasing property owner confidence.