Palm Coast August Home Sales Show Continued Strength
Home sales are up over last year and inventory is declining. Condo absorption rates vary widely.
Palm Coast, FL – September 9, 2011 – Palm Coast/Flagler County home sales reported to MLS are still trickling in as I write this. But even without additional sales, August represents the fifth consecutive month of a strengthening local market. Selling prices remain stubbornly stuck in neutral, but every other measure shows continued improvement.
Residential
August saw 141 single-family Flagler County homes sold via MLS for a total of $21.5 million vs. 124 and $20.1 million last August. The median selling price dropped slightly from $125,138 one year ago to $122,000. (Half the homes sold are above the median price. Half are below.)Distressed properties continue to depress selling prices. Distressed sales accounted for 50% of all home and condo sales. Overly strict lending and appraisal standards are not helping. 52.5% of home sales and 76.7% of condominium sales were reported as cash transactions. Flagler foreclosure filings kept pace with recent months. Foreclosure sales are the final step in the foreclosure process, when the property is sold at an auction. The number of foreclosure sales (which include all property types) jumped to 141 in August.
Although the first quarter of 2011 started out slowly, a total of 1,081 single-family homes were sold through August, representing a 10.8% increase over the same 2010 period. The total dollar value of those transactions increased 9.5%. In the most recent four months, home sales jumped 27.2% from the same period last year. The value of these transactions rose 22.8%.
The inventory of homes for sale continues to decline, a very positive indicator. As of September 1, there were 1,037 homes listed for sale on MLS. Only four months ago, there were over 1,200. Every time I write about the reduced inventory, several readers call or email me. They believe the reduced inventory is not good news because it is the result of negative factors, among them:
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Sellers have pulled their homes off the market because they cannot compete with distressed properties.
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Selllers cannot afford to sell at today’s prices.
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Banks are holding on to their distressed inventory because they don’t want to flood the market.
It really doesn’t matter why the inventory is decreasing. Regardless of the reason, potential buyers have fewer options from which to choose. Plus, they are more likely to miss an opportunity if they don’t act promptly. I recently heard from one buyer who was waiting for the sale of one of his properties to close before pulling the trigger on one of several bargains which he had identified. One month later, the funds were available but all his target properties were already under contract.
Condominiums
Condominium sales as well as selling prices are driven by distressed units. But, sales are not evenly distributed among condominium communities. I used the average of the most recent three month’s MLS sales in several condo communities to compare absorption rates. The Absorption Rate is a mathematical measure of the relationship between supply and demand in the marketplace. It’s derived by dividing the total inventory of product (for sale) by the number of units sold in the previous month. The resulting number (absorption rate) represents the number of months it would take to sell the number of homes or condos represented by the current inventory at the current price. It’s a strong indicator of current market conditions.
It’s generally believed that the absorption rate tells us if we are in a sellers’ market, a buyers’ market, or a normal market.
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Sellers’ Market – Rates 1-4
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Normal Market – Rates 5-6
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Buyers’ Market – Rates ≥ 7
|
Community |
Units Listed (MLS) |
Absorption Rate |
|
Canopy Walk |
9 |
4.5 |
|
Cinnamon Beach |
21 |
12.6 |
|
European Village |
19 |
14.3 |
|
Fairways |
12 |
17.9 |
|
Grand Haven Riverview |
3 |
9.0 |
|
Hammock Beach Towers |
8 |
3.4 |
|
Hammock Beach Club |
23 |
9.9 |
|
Hammock Beach Villas |
6 |
9.0 |
|
Hammock Dunes |
54 |
32.3 |
|
Palm Point |
21 |
21.0 |
|
Tidelands |
13 |
4.1 |
|
Yacht Harbor Village |
5 |
3.0 |
The overall absorption rate for MLS-listed Flagler County condos is 14.4, but there are some communities with rates either much higher or much lower.
Lower rates (good):
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Yacht Harbor Village – Real bargains at today’s prices
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Hammock Beach Ocean Towers – Selling mostly new units from existing developer inventory, possible including membership concessions
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Tidelands on the Intracoastal – I chose to move to Tidelands believing it was the best value/risk situation within my price range
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Canopy Walk – Association finances relatively strong – fewer lending roadblocks
Higher rates (not good):
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Palm Pointe – location in convenient to Town Center, but Town Center build out is years behind what was originally envisioned
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Hammock Dunes – Luxury living with few distressed units (perhaps fewer motivated sellers too) – Private club struggling with decreased membership with associated financial impact may be an issue
Looking back
While I’m buoyed by the good news, I cannot help but look back at the tragedy of the housing bubble’s burst. It hit our area more severely than others and took Flagler from the country’s fastest growing county to the one with the state’s highest unemployment. The depth and length of this housing depression would have been unimaginable only years ago.Home sales peaked over six year ago in June 2005 when 338 Flagler County single-family MLS-listed homes sold worth over $88 million. The median selling price topped out just under $260,000 at the end of that year. August 2011 sales were strong when compared to a year ago but the median selling price was down by 53%. Only 8 of the 141 homes sold in August fetched prices above the June 2005 median.
Homebuilders were hit hard too. Over 400 building permits for new home construction were issued in February 2005. Compare that to the 11 that were issued in February 2011, six years later. April 2011 set the all-time low record when only three permits were issued. Twenty-one permits were issued in August. Potential new home buyers are challenged by lending and appraisal guidelines. Builders report that most of their new home contracts are either all cash or carry a significant cash component to bring the loan to value ratio into a range acceptable to lenders.
City of Palm Coast Elections
Be sure to vote in the upcoming primary and regular elections. Local government has a huge impact on the health of our real estate market. Make sure your voice is heard.
How to help palm coast
Palm Coast grew and home prices increased due to population increase primarily from the northeast especially new york and new jersey. I wish local govt would allocate funds to promote the area in the northeast especially during the winter with print ads that would help the area i belive recover more quickly and would be a good allocation of tight budgets. This should be brought to the attention of our leaders.