There cannot be a normal housing market as long as distressed sales dominate. Only 15.5% of August single-family home sales were distressed. From 2009 to 2011, distressed sales topped 50%.
PALM COAST, FL – September 14, 2015 – The health of Flagler County’s housing market is revealed by the accelerating drop in the number of distressed (REO and short sales) home sales. Distressed sales accounted for more than half of Flagler County’s single-family residential home sales (as reported through MLS) for three years running (2009 to 2011). In 2015 year-to-date through August, that percentage has dropped to 22.3%.
More dramatically, the drop in distressed sales is accelerating. August’s six short sales and 26 REO sales totaled only 15.5% of all home sales. Only 13 of the 889 homes listed for sale are short sales. Thirty-six are REOs. The dearth of distressed sales should effect appraisals, perhaps making it easier for buyers to secure purchase mortgage money.
The median selling price of single-family Flagler County homes was $179,900 in August, a 12.4% increase over the same month last year. However, the median price of non-distressed (or normal) sales rose only 1.6% from $184,000 to $187,000. This illustrates how a change in product mix (fewer distressed homes) can influence the median sale price even when there is little change in the underlying home values.
The following charts show the growth and decline of distressed sales annually throuth 2014 and monthly for 2015 .
When August sales (204 homes) are measured against the 889 homes listed for sale, it shows the absorption rate is only 4.4, meaning that the current inventory represents only 4.4 months of sales. This is well within the “seller’s market” range, signaling strong sales in the near future.
New Home Construction
August single-family residential building permits numbered 36, a drop from the two previous months when 67 and 61 permits were issued respectively. Most importantly, the recent three-month total is 15.8% above the same three months of 2014. New building codes became effective for all permit applications filed after July 1, 2015. Builders rushed to get applications in before the end of June. These applications were issued during the June/July timeframe, hence the dip in August. I expect the rest of the year to finish strongly with the 2015 total near 600 homes.
Flagler County tallied 44 new foreclosure filings in August. The number of open foreclosure cases in the county stands at 612. Foreclosure completions are measured by the issuance of Certificates of Title. Twenty-four CTs were issued in August.