Newsletter – Palm Coast Metro’s Real Estate Market Continues to Normalize
Non-distressed home prices are up 13.4% in one year but still 25% off bubble highs. But the inventory of homes 4 sale represents only 4.8 months sales and new foreclosures are down 1/3 Y-T-D.
Palm Coast, FL – August 14, 2014 – Palm Coast’s metro housing market continues to normalize; healthy, but not too hot. Non-distressed median home selling prices are up 13.4% year-over-year to $195,000, but remain 25% below housing bubble prices. Economic news continues to improve locally. (The Palm Coast metro area comprises all of Flagler County.)
The chart depicts Palm Coast metro’s housing boom/bust cycle to date. It’s quite dramatic, considering prior housing cycles were typically 18 to 24 months in duration with the bottom of each cycle being no more than 10% below the previous peak.
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The number of homes sold has leveled off slightly above pre-bubble levels of 2003 while the median price has moved above 2003 levels. In fact the median price of non-distressed homes (more representative of the pre-bubble market) is at $195,000, equaling late 2004 prices.
The picture is not complete because it shows only sales reported through the Flagler Multiple Listing Service (MLS). It does not include most new home sales, which are typically sold outside MLS. The years from 2009 to 2011 averaged only 154 new-home building permits per year. More than double that number have been issued through July 2014.
Here is how July 2014 compares to July 2013.
All home sales
- 13.16% fewer single-family homes were reported sold through the Flagler MLS (198 vs. 228).
- The total sales value (revenue) of home sales increased 1.58%.
- That’s because the median selling price rose 6.45% ($155,000 to $165,000) and the average selling price per square foot rose 11.32% ($90.58 to $100.83).
Cash sales
- 44.4% of July 2014 homes sales were with cash, down slightly from 45.6% one year ago.
Short sales
- In 2013, short sales accounted for 14.5% of all home sales and 11.5% of sales revenue.
- In 2014, short sales were discounted (median selling price) 44.6% from non-distressed sales. In 2013, short sales were discounted only 27.3%.
- Total revenue from short sales in 2013 comprised 11.5% of the total revenue from all home sales. Total short sale revenue in 2014 dropped to 4.5% of all home sales.
REO (foreclosed sales)
- Foreclosed sales continue to make up a significant segment of the market, as they have throughout 2014; 25.8% in July 2014 vs. 10.87% one year ago.
- REO represented 18.0% of July 2014 total revenue, compared to 15.8% last July.
- 2014 REO sales were discounted 38.1% from non-distressed sales. This compares to 22.7% lower than non-distressed selling prices in July 2013.
Non-distressed sales
- The non-distressed segment is most representative of a normal market. Its share of home sales has risen from 65.4% one year ago to 69.2% in July 2014.
- The median price of non-distressed homes rose from $172,000 to $195,000.
- The average selling price per square foot rose from $101.30 to $113.76.
Conclusions
- Since the discount for both short sales and REOs has increased, it’s apparent that buyers are willing to pay a greater premium for non-distressed homes. This could be, in part, because the quality of distressed homes on the market has deteriorated.
- Fewer foreclosure filings coupled with more foreclosure completions translates into fewer properties in foreclosure. At the current rate, I expect the level of distressed properties to approach normal (minimal) levels in about 18 months. Meanwhile, their affect on the market will diminish gradually.
Beacons
- ULTA Beauty’s decision to move into the Town Center space formerly occupied by Books-A-Million signals that the Palm Coast area is being view by more upscale retailers.
- Increased single-family home starts and permits for Palm Coast Landing Apartments signal confidence that Palm Coast’s population will continue to rise.
- Palm Coast is getting more national recognition. See “City of Lists” article.
- The Central Intelligence Agency’s Invitational Golf Tournament and Charity Dinner/Auction will bring several high profile military, corporate and entertainment individuals to The Club at Hammock Beach in March.
Be sure to catch my new radio show, “Real Estate Matters” every Sunday morning at 9:00 A.M. on WNZF Radio. If you are out of the area, you can listen live on WNZF.com. Or you can catch the show later on podcast. The most recent show is under “other news” on the GoToby.com home page. My co-host is David Alfin, Watson Realty. Our guest this Sunday is commercial real estate specialist, Margaret Sheehan-Jones, CCIM. We will be talking about Palm Coast’s increased visibility among commercial site-selectors.
Matanzas Course
You can spin it however you like but home values are still too low locally compared to more economically viable parts of the country. Speaking of golf, I don’t know how this was missed in the local media, picked it up off the court Landmark website. Ownership of the Matanzas Course was transferred via quit claim to Henry Angle for $10 from Golf Group LLC of Palm Coast on 8/21. As we all know, Henry is a partner in Golf Group LLC of Palm Coast. Reason for the transfer was confirmed by Grand Club members as a pending sale of Matanzas to an unknown Florida Developer. The property is to be developed as residential.
Reply to Pride
I agree with your comments about Palm Coast prices. Given our location and climate, prices are irrationally low. A more robust job market, with more companies like AVEO will help bring values in line.
I reported the sale of Matanzas as a rumor on June 18th. Since, at least a few scheduled closings have been postponed. I understand that the buyer now wants a boundary survey.
I missed the Matanzas Quit Claim Deed. Good catch and thank you.
As I have said in the past, future use of the property as a golf course is slim to none. But any residential development will need to go through City of Palm Coast for approval. I would think the city would be willing but there will likely be a lot of objections from the neighbors, who are also voters.
Mantanzas Woods Golf Course
The last thing we need is more homes, values are way down not only of the economy, the closure of the course killed Mantanzas woods values more than the rest of the county, Mr Landon better make sure he has an impact study done, if not, there will be a class action lawsuit.
Homes were being sold as far back as 2006 with a bill board stating Mantanzas Woods, a Golf Course Community, however zoning was changed in 2006 and homes were sold for years not knowing the Golf Course would be no more, as we all know Golf course communities bring higher values, and now the city wants to approve more homes, this is not helping bringing back values. Stop catering to the builders, what about the residents?
Course Property
Yes, you are correct, there will be a lot of objections from the residents. The only resident(s) I know of who would support residential would be one or two vocal residents who sell real estate who stand to make a quick buck without regard to long term consequences for the neighborhood. Sad to say that the are folks who will “crap” in their own backyard for a quick profit. That “property” is all this area has going for it. W has Pine, E has Cypress and it borders Grand Reserve as well. Mr Landon has a house on Cypress and within sight of Grand Reserve. Golf course property, or the promise of golf course property, is desirable and it supports healthier property values. We are tired of being dumped on and ignored by the city. If any course should have been closed, it was Cypress. Wonder why it wasn’t closed?
Correcting Pride of Cucamonga
I found the Quit Claim deed to which you referred. It does not convey interest in the Matanzas Golf Course, only a single lot at 166 Laramie behind the 18th tee (former).