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By all measures, the Flagler County and Palm Coast real estate market is strong. The numbers are simply too good. All indicators headed in the right direction. Buzz on the street indicates no slowdown
By Toby Tobin
PALM COAST, FL – July 8, 2015 – The Palm Coast and Flagler County real estate market is in full recovery mode. That fact is undeniable. The numbers are simply too good. Every indicator is headed in the right direction and the “buzz on the street” indicates no slowing down.
The number of single-family Flagler County homes sold through the Flagler Multiple Listing Service (MLS) in June was 220, up 17% from June one year ago. More importantly, only 889 homes are listed for sale, down from 964, last July. That’s 7.8% fewer. The inventory represents only 4.4 months inventory (absorption rate) at the current sales rate. When the absorption rate drops that far below the normal rate of 6.0, it is good news for sellers. Demand is high. When priced appropriately, new listings are going fast.
Homes sold v median price thru June 2015
The aggregate sales value of June 2015 home sales was $47.7M, up 29.0% from June 2014. Aggregate value is important to real estate practitioners because commissions are driven by sales dollars. Compare today’s market to June 2009 when aggregate sales were only $22.3M. The aggregate sales for all non-distressed homes was $41.2M, up 31.6% from one year ago.
For several months, other metrics have signaled a market recovery. A high percentage of cash sales indicates a larger than average number of investors in the market and/or a lending shortage. Cash accounted for 35.5% of June home sales in Flagler County, on par with the rest of Florida but higher than the 24.0% (in May) for the U.S. as a whole. Still, in 2011, cash controlled 53.0% of the Flagler home market.
Both new foreclosures and foreclosure completions continue their downward trend. There are only 596 open foreclosure cases in the county.
Flagler foreclosure picture through June 2015
Only three July home sales (1.4% of all homes sold) were identified as short sales. Short sales accounted for only 0.6% of aggregate June home sales. Compared to 2009, when 41.5% of the year’s sales were classified as short sales, we have come a long way.
Like short sales, lender-owned (or REO) sales are on the decline at 17.7% of all home sales. REO sales peaked in 2014 at 24.8% of all home sales.
Distressed sales, the combination of short sales and REO sales peaked in 2009 at 54.6% of the market. Their slice of the pie has dropped to 23.3% year to date and only 19.1% in June.
The median selling price for all homes sold in June 2015 was $166,300, up 3.13% from June 2014.
The median price for all REO sales was $131,000, up 4.8% from one year ago.
The median selling price for non-distressed homes was $178,000, up 4.7%.
The selling price per square foot for all homes sold in June was $103.58, up 5.4%.
First six months comparison
Month to month, sales vary and it’s hard to hang your hat on only one month’s worth of stats. A look at home sales over the first half of the year compared to the same period one year ago gives us a larger sampling, thus more predictive confidence. Look at some of the same measures from a broader sampling.
Number of homes sold – 1,141, up 9.5% over 2014
Median price – $163,000, up 6.5%
Price per square foot – $101.88, up 6.6%
Cash sales as a percentage of sales – 43.3%, down 3.7 percentage points
Short sales – 31, down from 63, or 50.8%
REO sales – 875, up 23.4%, but the REO sales have peaked and are on the decline
Non-distressed (Normal) sales – 875, up 23.4% from the same period last year
Condominium market in Flagler County is divided into two distinct segments, those within the Hammock Dunes CDD and those outside the HDCDD. The first is largely comprised of either luxury living or luxury rental condominiums. Those on outside the HDCDD, perhaps excepting Surf Club, generally fall into a lower price point.
YTD through June, 153 condominiums have sold in the county through MLS. The median price of the 39 within the HDCDD was $372,500, up from $362,500 for the 2014 year. The median price for the 114 sold outside the HDCDD was $136,250, up from $$135,000.
Within the HDCDD, the market is still working its way through the distressed inventory. There have been four short sales YTD and ten REO sales. Combined, they represent 35.9% of units sold. Outside the HDCDD, only 14.9% of the 114 units sold were distressed; two short sales and 15 REOs.
The absorption rate of the two market segments are also quite different. Within the HDCDD the absorption rate is 22.9 (months inventory) vs. only six outside the HDCDD.
The Cinnamon Beach Condominium market was adversely effected by a lawsuit between the Condominium Association and the builder over structural defects. During the period before the subsequent settlement agreement (the Association received $3.2M), buyers looked elsewhere. It appears that Surf Club was the main beneficiary. Both Cinnamon Beach and Surf Club are beachfront and of similar age. YTD Surf Club sales are at an average $205.26 per square foot, up 11.2% over all of 2014. Cinnamon Beach YTD sales show an average $198.18 per square foot, down 18.6% from 2014. Tidelands, a 252 unit condominium community on the west side of the Intracoastal Waterway, has also seen appreciation this year. The average YTD price per square foot is $111.89, up 20.2% from the 2015 year.
Activity among Flagler builders is growing stronger each quarter. 67 new home building permits were issued in June, the most since May 2006. During the first half of this year, 299 single-family permits were issued, up 19.1% from the same period last year.
The indicators all look good, but even more encouraging is the buzz on the street. One broker joked that he needs to get another white board to hold the increase in pending sales and listings. A banker tells me that he is getting more serious inquiries from builders and developers. The Flagler Realtors® Association is reportedly gaining about 40 new members per month. Grand Haven Realty has broken ground on its new office building on Colbert Lane, across from the main entrance to Grand Haven.
Island Walk, the redevelopment of Palm Coast’s original shopping mall, is really a big deal. This is not a simple facelift. At a time when shopping malls are losing momentum to alternative sales channels, Island Walk’s redevelopment speaks volumes about the developer’s confidence in our growing economy. It will not go unnoticed by other retail and restaurant developers.
The Palm Coast Pkwy widening project will be completed by the end of the year. The next major road improvement efforts, focused on the north side, have already begun. Matanzas Woods Pkwy will gain on/off ramps to Interstate 95. The extension of Old Kings Road and Palm Harbor Pkwy will make driving (and living) on the north side more attractive. Look for new development of the US Route 1 at Matanzas Woods Pkwy intersection. The new traffic patterns will probably give The Conservatory a little kick start too.
If we can just keep the rest of the country and the world from doing something stupid, our area’s future looks rosy.