Home sales were even with last year but prices were up. Foreclosure filings are down. Building permits for new homes are more than double last year’s number. The myth of declining home inventory.
Palm Coast, FL – September 24, 2013 – Palm Coast, FL, once the poster child for the real estate bubble, has settled down to something resembling normalcy. This area’s housing market still has its local quirks, but it no longer garnishes attention at either the state or national level.
Home prices are rising nicely. The median selling price for a single-family home in Flagler County sold (MLS) in August was $145,000, up 20.4% from last August. But prices in other Florida and national markets are increasing faster, some more slowly. The number of Flagler homes sold remained the same as last August (174), but the aggregate selling price rose by $5.9 million (22.2%).
One surprise has been the decline in foreclosure filings. Flagler County registered 44 new filings in August. When combined with 33 in July, the two months equaled the 77 filed in June alone. Some say that the decline signals the end of the foreclosure crisis. Actually, the decline is due to a new law that went into effect July 1 that puts additional documentation requirements on lenders who file for foreclosure. Though the law was intended to speed up the foreclosure process, the opposite is happening.
Flagler County foreclosures that have been stalled by lenders for years are receiving additional attention in Flagler County. Lenders are being prodded along by the Court, unable to sit indefinitely on properties lingering in the foreclosure pipeline. Once lenders catch on to the new documentation requirements, the Court’s efforts will become more evident and foreclosure inventory will really begin to fall.
The end of the completed foreclosure process is an auction, where note-holding lenders and others bid for and take title to the foreclosed property via a Certificate of Title issued by the Clerk of Court. Because the process takes so long, the current foreclosure sale schedule includes properties on which foreclosure filings date as far back as 2008. Foreclosure filings peaked during 2008 and 2009 with several months in which over 200 foreclosures were initiated.
Myth of the Vanishing Inventory
Journalists and real estate practitioners are broadcasting the message that the inventory of homes for sale continues to shrink. It may seem that way. REO (lender-owned) inventory is snapped up quickly, often with several competitive bids. Also in demand are well-priced non-distressed properties, especially if they are in “hot” communities. With nearly 1,900 residential units in Grand Haven, only 46 are available for sale on MLS. Only two (4.3%) are distressed. Flagler Beach is also experiencing an increase in demand.
Distressed homes led sales throughout 2011 and 2012, accounting for more than half of all home sales. That is no longer true. The distressed inventory has been depleted. Short sale listing account for only 5.1% of all homes listed. Lender-owned homes account for another 10.1%.
But the fact is that there are more Flagler homes for sale than one year ago. 767 single-family homes were available on September 1 v. only 718 on that date one year ago. With sales easing off, as they always do in the fall, new arrivals to inventory are exceeding current sales. As of September 23, Flagler’s single-family inventory had grown to over 800 homes.
Lot sales and building permits are both good indicators of a market’s direction. When lot sales are on the uptick, new home starts are close behind. Both were evident in August when 79 lots were sold v. 49 last August. Building permits jumped from 21 to 47 over the same period.