Palm Coast 3rd Quarter Home Sales up 20.9% over ’08
GoToby.com predicts a gradual recovery, not a rebound.
Palm Coast, FL – October 4, 2009 – The recovery may be on its way, but don’t look for another 2002 to 2006 style boom. Developing patterns show that we may be past the market bottom in the under $200 thousand market and near the bottom in the luxury market. But Palm Coast and Flagler County real estate values will not be climbing quickly in the foreseeable future. Too many factors will prevent another boom.
Continuing real estate sales trends
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134 single family homes were reported sold through MLS in September, up from 121 in the same month a year ago. The median selling price was $141,500.
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In the third quarter, 410 homes sold vs. only 339 in the same quarter last year. However, with lower prices, the total dollar amount of sales remained constant year-to-year ($70 million). 410 also represents the greatest number of homes sold in a quarter since the third quarter ’06 (but less than half the number sold in the third quarter ’05).
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The inventory of unsold homes hovers near 1,350. The number of pending sales contracts (currently 577) also remains fairly constant. Since the fourth quarter is traditionally the slowest quarter in Palm Coast’s real estate market, I don’t expect these numbers to improve until spring.
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Lender-owned (via foreclosure) sales and short sales continue to dominate, making up 15.7% and 42.5% of the market respectively. Lender-owned properties spent an incredibly short average of 26 "days on market."
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The number of foreclosure filings remains high, but constant. Fewer properties are ending up in bank hands. There were 194 filings in August. Only 23 properties were titled to lenders via foreclosure sale. Realtors®, buyers, title companies, and lenders seem to have become more proficient at handling the disposition of distressed properties.
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The market segment above $200 thousand showed a rebound in August. In Grand Haven, 13 homes were purchased for a median price of $300 thousand. Grand Haven’s Absorption Rate is "normal" at 6.1. Its GINNdex is also 6.1.
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Builders and developers are talking openly about adjusting their plans to meet the new market conditions. Reynolds (Ginn) has rolled out new pricing for its Tower Condominiums and become active in MLS. WCI emerged from bankruptcy with only two Le Jardin luxury condominiums in inventory. Casa Bella units have reportedly sold out. Aggressive pricing found willing buyers.
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Sales of both condominiums and building lots accelerated, driven largely by price reductions fueled by short sale prices. Foreclosure proceedings were initiated on the following "high value" properties in August. The market cannot recover until distressed properties are sold. There will continue to be significant numbers of distressed properties entering inventory for months to come. Fortunately, at current prices, buyers for such properties are abundant.
Foreclosure Filings
Tidelands – 6 condominiumsPalm Coast Plantation – One homeHammock Dunes – 2 condominiums, 2 lotsConservatory – 10 lotsSanctuary – 2 homesGrand Haven – 2 homes, 1 lotVillage at Palm Coast– 1 lotPolo Club – 1 lotYacht Harbor Village – 1 condominium, 3 lotsHammock Beach – 3 condominiums, 2 lotsCanopy Walk – 3 condominiumsOcean Hammock – 2 lotsEuropean Village – 1 residential condominium
Palm Coast real estate future
The $8,000 dollar first-time buyer tax credit is said to have accounted for about a fourth to a third of home sales this year. The credit is set to expire at the end of November. The National Association of Realtors® (NAR) and others are lobbying Congress to extend the credit. Their actions will affect the housing market through the holidays; a period of typically slow sales.
There are several factors that will prevent any rapid rise of real estate prices in the near future:
The low inventory of homes available for sale is not the result of robust sales. Inventory dropped when discretionary sellers pulled their properties off the market as distressed pricing took over. They are unwilling to sell at current prices. But even slight price increases will bring some of them out of the closet. This phenomenon will offset the lack of new builder spec homes which typically fill added demand.
People who thought they understood the real estate market (from Carl Icahn all the way down to me) failed to predict the extent or rapidity of the real estate market’s collapse. Values have dropped before, but typically not by more than 10%. Never before have so many people found themselves upside down. For most, the possibility was inconceivable at the time they bought.
Today’s diversified investor can be described as someone who lost money in BOTH real estate and the stock market. Surviving developers (and the new crop of developers that is sure to arise) will be less prone to excesses; so too will buyers. This latest recession will have a long term affect on people much like the affect the great depression had on my parent’s generation.
Inflation, higher interest rates, and higher taxes will be the result of today’s federal fiscal policies, dampening the economy for the foreseeable future.
GoToby.com predicts a recovery but not a rebound. Growth will be more gradual, but more sustainable.
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FANCIFUL PRETENSE
You can spin this enthusiasm about the housing market in PC any way you want. The facts are, population levels are low, income levels are low, unemployment is high, property taxs, city fee’s, utilities etc. are not cheap, commercial property is over priced, and best of all no new industry to provide good paying jobs. The people of PC are delusional if they think a few foreclosed home sales are going to change anything.
Deed in lieu of foreclosure
Toby,
Do you have any figures for the amount of bank owned propeteries that are in the deed in lieu of foreclosures category?