Palm Coast/Flagler Real Estate has Turned the Corner
Second month in a row of significant gains in the number of single-family homes sold.
Palm Coast, FL – September 4, 2009 – Don’t look for any significant uptick in pricing, but the Palm Coast and Flagler County residential real estate market is improving. The number of homes selling is on the rise, absorption rates are lower, the inventory of unsold homes has dropped, and Realtors® across the board are reporting more customer traffic.
Property owners received their Truth in Millage (TRIM) statement in September [Tax Notices Sent Out, Most Receive Good News]. Many homesteaded property owners were shocked to see that their taxes rose even as the value of their property declined. Many have lived under the false belief that the Save Our Homes amendment capped their tax increase at 3%. The cap applies only to the taxable assessed value, not the tax itself. Our elected officials are free to raise the millage rate, increasing taxes well beyond the 3% misconception.
Homesteaded property owners who bought prior to the real estate boom were most affected. Their taxable assessment was artificially held low by Save Our Homes throughout the run up in prices. Now their taxable assessment is rising, even as their property’s value declines. Combined with rising millage rates, this means higher taxes.
August Home Sales – Palm Coast and Flagler County
Mirroring July, the number of homes sold in August ’09 improved (up 20.3%) over August ’08. Total July/August sales came in 27.2% higher than the same period in ’08. Also mirroring a pattern evident for several months, sales continue to be dominated by the under $200 thousand market which, in turn, is dominated by distressed sales; lender-owned (via foreclosure) and short sales. Distressed sales represented 54% of all single-family homes sold in Flagler County.
Absorption Rate Improving
The absorption rate [what is absorption rate?] has long been considered one of the best indicators of the health or vitality of the market. The absorption rate remains relatively stagnant for properties selling for more than $300 thousand. The rate for properties selling below $200 thousand has continued to improve for the past two years. It indicates a normal market within that price segment.
|
Location |
Aug./Sept. ’07 |
July/Aug. ’09 |
|
Cypress Knolls |
18.0 |
3.2 |
|
Indian Trails |
15.0 |
4.6 |
|
Lehigh Woods |
25.4 |
4.7 |
|
Matanzas Woods |
13.0 |
5.2 |
|
Palm Harbor |
7.5 |
5.4 |
|
Pine Grove |
12.8 |
4.8 |
|
Pine Lakes |
13.0 |
4.3 |
|
Quail Hollow |
23.0 |
6.3 |
|
Seminole Woods |
17.6 |
3.1 |
|
Flagler County (all) |
12.6 |
5.1 |
In spite of the steady flow of foreclosure filings, the market has found a price point acceptable to buyers willing to grab up the incoming flow of new distressed listings.
Painful as it is for those owning more expensive properties, the increase in foreclosure filings within that segment is encouraging from a market perspective. Many individual owners are upside down on their mortgage, often owing much more than the property’s present value. A lien, represented by the mortgage, prevents them from selling without the lender’s consent. Foreclosure looms.
Lenders selling foreclosed properties are not shy about reducing prices until buyers can be found. Lender-owned transactions establish the "floor" of the market. Once established, lenders have a benchmark against which to evaluate short sale offers, weighing the cost of proceeding with foreclosure vs. accepting a short sale.
The appearance of high value lots and homes among foreclosure filings signals the arrival of lender-owned properties within that market segment. As with the under $200 thousand market, buyers will be found to absorb distressed properties. As part of the market correction, owners not desperate to sell will remove their properties from the "for sale" list, reducing inventory, stimulating sales.
Several exclusive properties can be found among the 247 lis pendens (foreclosure filings) recorded by Flagler County in August:
-
Tidelands – six condominiums
-
Hammock Dunes – two condominiums, two lots
-
Conservatory – ten lots
-
Sanctuary – two homes
-
Grand Haven – two homes, one lot
-
Village at Palm Coast – two lots
-
Yacht Harbor Village – one condominium, three lots
-
Hammock Beach/Ocean Hammock – three condominiums, four lots
-
Canopy Walk – three condominiums
The next upward pricing cycle (there will always be another cycle) cannot begin in earnest until the distressed properties have been eliminated entirely from the marketplace. However, a broker recently reported that he has noticed a slight increase in prices asked by lenders selling within the lower price range. Investors are active at that level; buying, rehabbing, and then reselling. Perhaps this is an ealry market indicator.
I expect home sales to continue at a good pace through November, in spite of the fact that October through December is traditionally a slow period. The driving force is the $8,000 first time buyer tax credit, set to expire November 30. Any participating buyer must CLOSE on their purchase by that date unless congress extends the program.
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Flagler real estate
Turn the cornor or not… There are many, many residents (most retired), that are viewing the property tax (county and city) a huge impact on usable income, already decimated by the economy, social security hits, and other increases (license fees, etc). Turn the corner does not work, unless the county/city politician quit spend money, their resident don’t have.