November Home Sales Up – Prices Down: Again
Numbers don’t lie by themselves, but they can with a little help. Often, housing market analysis is simply opinion supported by strategically selected facts.
Palm Coast, FL – December 6, 2011 – Most media housing market analysis focuses on median selling price. The median selling price of all Flagler County single-family homes sold through MLS in November is $112,000. This compares to October’s median price of $124,450 and to November 2010’s $123,900. So prices are down, but is the market down?
Median Home Selling Price
What is the median price and what can it tell us? Median price is the midpoint price of all homes sold. It’s the price at which one half of the homes sold are above and half are below. The median price will move with the market, but it should not be relied upon as a lockstep indicator. In other words, a ten percent drop in the median selling price does not mean that the value of the typical home declined ten percent because median price also reflects the mix of product sold. If a significant number of homes sold are depressed (either lender owned via foreclosure or short sale), the median price will be lower because distressed properties sell at distressed prices.
For some reason, the real estate industry has settled upon median price as an industry measure. Other industries have not. The automobile industry reports both the number of cars sold and the total dollar value of all sales. When was the last time you saw a news story citing the median price of cars sold? Or the median price for beef, wheat, computers or draft beer?
During November 2011, 125 homes were sold in Flagler County as reported by MLS. (MLS reporting is sometimes delayed. A few additional sales are likely to be reported in the upcoming days.) This compares to 126 reported sold in September 2011 and 97 sold in November 2010. The dollar value of all Flagler County home sales was $18,909,030. October’s total was $19,706,920. November 2010 home sales totaled $15,486,895.
Although November’s median price was down ten percent from both October 2011 and November 2010, the number of homes sold in November was essentially equal that of October 2011 and 28.9 percent higher than November a year ago. The sales total for November was slightly below October (down 4%) but 27.2 percent higher than November 2010.
Seasonality is also a factor. Is it logical to compare November’s results to those of October? We are approaching the slowest sales months of the year (December, January and February). Historically, there are fewer homes reported sold in November than in October. The total value of November transactions is also historically below that of October.
Product Mix
Homes are typically sold from one of three categories:
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Non-distressed – the traditional home sale transaction. Just a few years ago, nearly all home sales were in this category.
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Short sale – The selling price is below the mortgage amount. The seller is unable to cover the shortfall. Lender’s consent is required because the lien must be released to complete the sale. Short sales typically take longer to close once a sales contract is written. Short sale properties are more likely to suffer from neglect and/or vandalism than non-distressed properties, adding additional pressure to reduce the selling price.
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Lender-owned – the lender has taken title of the property, either through a foreclosure auction or via a deed in lieu. Lender-owned properties are typically sold within days or weeks of listing. Lender-owned properties are even more likely than short sale properties to suffer from neglect and/or vandalism. Lender-owned properties are usually sold "as is."
Only 46.4 percent of November’s home sales were non-distressed, equal to the percentage a year ago. But this year, short sales represented 28.8 percent, down from last November’s 34.0 percent. Lender-owned transactions rose from 19.6 to 24.8 percent year-over-year.
The shift of mix undoubtedly accounts for a portion of the decline in median price. Notably, the median price for non-distressed home sales in November was $140,000. Non-distressed median prices have ranged between $122,250 and $162,500 this year while the overall median price range has been $111,250 to $129,000. Year-to-date, the median price for lender-owned homes is $97,000. For short sales it is $106,500.
Analysis: Both the number of homes sold and total sales have increased, although median prices have dropped. On balance, the market is showing strength. The increases are significant.
Distressed properties comprised 53.6 percent of all home sales. Only 50 percent of homes sold were for prices below the median. There are not as many sales clustered around the median, making the median quite sensitive to minor fluxtuations. If only six more homes had sold for $120,000 or more, the median would have been $120,000.
Community Snapshots
The percentage of distressed properties varies from community to community. The tables below show a correlation between the number of distressed properties and the level of sales activity in both residential home and condominium communities. Communities with the lowest (best) absorption rates also have the highest percentage of distressed listings.
|
|
All Listings |
Distressed Listings |
Total Sold Last 3 Months |
Absorption Rate |
|
Belle Terre |
25 |
11 |
17 |
4.4 |
|
Seminole Woods |
33 |
16 |
20 |
5.0 |
|
Plantation Bay |
10 |
0 |
6 |
5.0 |
|
Quail Hollow |
24 |
13 |
13 |
5.5 |
|
Matanzas Woods |
34 |
15 |
18 |
5.7 |
|
Lehigh Woods |
91 |
50 |
43 |
6.3 |
|
Indian Trails |
83 |
36 |
39 |
6.4 |
|
Pine Lakes |
97 |
31 |
44 |
6.6 |
|
Pine Grove |
76 |
38 |
34 |
6.7 |
|
Sea Colony |
7 |
0 |
3 |
7.0 |
|
Palm Harbor |
147 |
31 |
60 |
7.4 |
|
Armand Beach |
6 |
0 |
2 |
9.0 |
|
Cypress Knoll |
37 |
12 |
10 |
11.1 |
|
Woodlands |
12 |
8 |
3 |
12.0 |
|
Grand Haven |
65 |
8 |
16 |
12.2 |
|
Fuquay |
13 |
3 |
3 |
13.0 |
|
Toscana |
8 |
0 |
1 |
24.0 |
|
Hammock Dunes |
38 |
1 |
4 |
28.5 |
|
Ocean Hammock |
28 |
1 |
1 |
84.0 |
|
Yacht Harbor Village |
3 |
2 |
0 |
N/A |
|
Island Estates |
17 |
7 |
0 |
N/A |
Note: All sales data reported is from Flagler County MLS
|
All Listings |
Distressed Listings |
Total Sold Last 3 Months |
Absorption Rate |
|
|
Tidelands |
16 |
12 |
14 |
3.4 |
|
Canopy Walk |
6 |
1 |
5 |
3.6 |
|
Cinnamon Beach |
19 |
7 |
8 |
7.1 |
|
Fairways |
8 |
4 |
3 |
8.0 |
|
European Village |
17 |
8 |
5 |
10.2 |
|
Surf Club |
20 |
2 |
5 |
12.0 |
|
Woodhaven |
11 |
2 |
2 |
16.5 |
|
Palm Pointe |
17 |
8 |
3 |
17.0 |
|
Hammock Beach |
40 |
7 |
7 |
17.1 |
|
Yacht Harbor Village |
7 |
1 |
1 |
21.0 |
|
Hammock Dunes |
62 |
10 |
6 |
31.0 |
|
Marina Cove |
14 |
4 |
1 |
42.0 |
|
Marina Bay |
6 |
2 |
0 |
N/A |
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