Real Estate Newsletter – Palm Coast, FL Housing Market Update

Sale contracts are still on the rise for single-family residential homes while inventory keeps shrinking. How much is due to foreclosures and short sales?

May 5, 2008 – Palm Coast, FL – For yet another month, the market for single-family homes in Palm Coast, Flagler County, FL shows some strength. Only in the past three or four months have short sales and lender owned properties represented a significant percentage of the total transaction count. How do they affect the market?
January ’08 was a very important month in the local real estate market. The median selling price (half of the homes were sold for prices above the median, half below) dropped to $161,500 from $190,000 in December. The increase in percentage of lender owned properties in the selling mix was significant, rising from one sale in February ’07 to 20% of all sales in January/February and 25% in March.
Single-family home selling prices have stabilized.
  • January – 51 homes sold with a $160,500 median selling price
  • February – 103 homes sold with a $169,000 median selling price
  • March – 100 homes sold at a $168,945 median price
  • April – 122 homes sold at a median price of $170,000
The 122 units sold in April represent the highest number of units sold since August ’07. Total sales volume (the sum of all sales) for these homes was $27,971,060, also the highest since last August. More importantly, inventory (the number of homes listed for sale on MLS) has dropped from about 2500 at the end of the year to under 2100. The number of "pending" sales (both pending and contingent contracts) has grown to 297 from about 125 at the end of the year.
But about the quality of the pending contracts? 115 of them are listed as "short sales." Short sales require the lender’s approval since the selling price is below the outstanding mortgage balance, requiring the lender to "forgive" the difference. There is no way to easily measure the percentage of short sale contracts that are ultimately approved by lenders. And it can take up to 45 days for lenders to respond to a short sale offer. But even if we assume that 80% are declined, there are still over 200 pending sales, a definite sign of strength.
How much have the short sale and lender owned transactions affected the median selling price? I separated April’s numbers into three categories for comparison.
Palm Coast Single-Family Home Sales By Type

Homes Sold

Median Selling Price

Median Price per SF

Day on Market






Short Sales





All Other





Excluding short sale and lender owned transactions, the median price for single-family homes sold in April was $208,250. The median price per square foot was $107.68. These numbers compare again with August ’07. Important – the $208,250 median is just 20% off the December ’05 peak median price of $259,950. Comparing the January low median price of $161,500 (which is 38% lower than the peak) is like comparing apples to oranges because of the lender owned component in the January figures. So what has happened?
  • The banks do not want to hold onto property. Their pricing strategy is to "price to find buyers." That explains the increase in the number of transactions as well as the number of pending sales and low "Days on Market."
  • Non-distressed sellers, seeing how far prices have fallen, have refused to follow the banks’ lead. Some have removed their properties from the market, reducing inventory.
  • Other sellers (at all levels) have taken the pricing lead. For instance, WCI Communities dropped the price of the formerly non-performing Casa Bella units in Hammock Dunes to about $500,000. Several have been snapped up at the new pricing.
  • Two properties sold in Island Estates, the premium Intracoastal Hammock Dunes community.
  • Grand Haven inventory has dropped from about 175 homes several months ago to 132 while pending sales have jumped from only a few to 15.
  • Every active Realtor® with whom I’ve spoken cites a healthy increase in buyer traffic.
I stand by my February observation that the Palm Coast and Flagler markets  have bottomed out (at least the single-family residential sector). We will probably see several months of sideways pricing and volume while we work through the existing inventory as well as the continuing supply of short sale and foreclosed properties.
Lots and condominiums have yet to establish a pricing base. The condo market has absorbed Centex’s Tidelands units after several months of price reductions. This sector should start to settle down soon. Palm Coast lot prices have stabilized near $30K, but are not likely to show an increase in unit sales volume until the inventory of vacant existing homes declines.
All real estate markets are local. In spite of what the traditional media says and national trends show, Palm Coast stands out. In the equity market, some stocks exhibit a greater volatility in pricing than others. The Palm Coast real estate market has demonstrated this same volatility. Palm Coast prices rose sharper and higher (in percentage terms) than most other areas. They also fell more quickly and deeper. But Palm Coast seems to lead the market, peaking and starting the downward slide earlier. It appears that Palm Coast may also be leading the market by showing strength against further price erosion now, while prices continue to fall in other markets and prognosticators continue whining.  
"An economist is someone who accurately forecasted nine out of the last three recessions."
What a great time to be in a cash position.
I am strictly a referral agent. Whether my readers are buyers or sellers, I help them (at no cost) find that "right" agent who specializes in the property type of interest to them. They will take good care of you while I concentrate on Don’t hesitate to call me (386) 931-7124.
1 reply
  1. Karen Joyce
    Karen Joyce says:

    Great article

    These comments by Toby about the current real estate market are very useful. Thank you for your re search and well written article, Toby. Karen

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