Strong June Home Sales – Weak Prices – Foreclosure Reporting
The Flagler County real estate market shows signs of strength; inventory is down, sales and pending contracts are up. Yet prices remain stubbornly neutral. What do reports about foreclosures tell us?
Palm Coast, FL – July 12, 2012 – June continued the trend established early this year. The Palm Coast and Flagler County real estate market shows signs of strength; inventory is down, sales and pending contracts are up. Yet prices remain stubbornly neutral.
June results:
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Only 722 single-family Flagler homes are listed for sale through the local MLS as of July 1st compared to 1,108 listings a year ago.
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July began with 611 pending or contingent sales contracts. There were only 507 under contract at the beginning of July 2011.
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185 single-family home sales were reported as closing during June. 183 home sales were closed in June 2011.
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The median price of homes sold was $113,900, reflecting the number of distressed sales. This year has seen lender-owned sales increase relative to short sales. The median price of the 59 lender-owned sales was only $100,000. The median price of the 39 short sales was $105,000.
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Median "Days on Market" (DOM) dropped to 58 days compared with 128 days last June. DOM measures the amount of time it takes to sell a property.
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Cash is king, accounting for 53% of MLS home sales and 80% of condominium sales.
Second Quarter results:
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576 single-family Flagler homes sold, the most since the fourth quarter of 2005.
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$85.5 million in home sales transactions, the most since the second quarter of 2007.
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54 building permits for single-family homes, the most since the fourth quarter of 2007.
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162 lender-owned sales and 130 short sales.
First half results:
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Single-family home sales grew 32.2% from 779 to 1,030.
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The total value of home sales for the first half of the year was $157,162,238 — 24.5% greater than the same period in 2011.
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The median home selling price dropped slightly from $120,000 to $118,000.
Builders and developers are demonstrating confidence that the market is beginning to move in the right direction. The Conservatory and Beach Haven are being re-launched. The Conservatory, the golf community across from Matanzas High School originally marketed by the Ginn Company, has repositioned its offering. New buyers have an opportunity to purchase a house/lot/membership package at prices starting in the $300’s. It’s ironic, but a measure of the times, that the package is now offered at about the same price for which the lots alone once sold. Sales and marketing of the Conservatory will be handled by Front Door Communities and Luxury Team of Florida.
Beach Haven, near Marineland on A1A, is being remarketed by CBV Homes. A new model home is under construction.
Palm Coast is attracting new commercial neighbors. Carrabba’s and Zaxby’s plan new restaurants across from the Golden Coral. Panera Bread is said to have selected a second site next to the new CVS on Old Kings Road.
Foreclosure news vs. the reality check
Once again, the media has headlined the latest reports of foreclosure activity in Flagler County. Once again, they got it wrong. My analytical background taught me the value of "the reasonableness test." Does a reported value fall within a range considered normal and logical? For instance, the weather report that forecasts a sunny day isn’t reasonable (and can’t be relied upon) if it happens to be raining at the time.
The Daytona News-Journal reports today that one out of every 572 Flagler County homes was in some stage of foreclosure in June. Is that reasonable? The Flagler County Property Appraiser lists 38,107 single-family homes in the county. Based on the N-J report, about 67 of them were in some state of foreclosure (38,107/572). Yet 83 single-family homes were scheduled to be sold at foreclosure auction during July alone. Clearly they were all in some stage of foreclosure during June. And don’t forget the homes already scheduled for August sales. Plus, homes made up the majority of the 114 June foreclosure filings in the county.
The N-J report also states that one in 135 Flagler homes was in foreclosure as recently as April. That translates to 282 homes (38,107/135), indicating a 76.2% drop in the number of homes in some state of foreclosure in two months (April to June). Foreclosure activity is declining. The number of "bargains" available is too, but 76.2% in only two months is not reasonable.
Why the confusion? The answer is simple. Exact foreclosure numbers are simply unavailable or difficult to uncover, so estimates are extrapolated from what information is available. Or, one can simply cite a "reliable" source for data.
The source of foreclosure data for nearly all major media outlets is RealtyTrac. In today’s article, the N-J describes RealtyTrac as "an Irvine, Calif.-based market research firm that tracks foreclosure activity throughout the country." But that’s not how RealtyTrac describes themselves. Their About Us page says they are "the leading online marketplace of foreclosure properties, with more than 1.5 million default, auction and bank-owned listings from over 2,200 U.S. counties…." They may be a successful real estate sales company, but their data does not pass the reasonableness test.
And here’s another hint; be wary of misinterpreting quantitative data. When the weatherman predicts a 20% chance of rain, it doesn’t mean that it’s going to rain two minutes out of every ten.
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