I am often asked what I think will happen over the next year in Real Estate in the area. We all wish we had a crystal ball to see into the future. This is especially true in the Real Estate word over the last few years. The only thing we can do is look at the data, activities, and trends to get a perspective on the upcoming year. My outlook based upon these areas is very positive for the area when it comes to residential home sales. Let’s take a look:
Number of Sales of Residential Homes
2009 finished at about 10% higher than 2008 for the number of residential homes sold, and finished at about 107 sold/month (closed). 2008 was right around 100/month sold. 2008 was also slightly higher than 2007 in the total number of homes sold. So we are seeing a positive upward trend in the quantity of homes sold in the area. As of January 16, 2010 we have 29 residential homes closed in Palm Coast and 33 for Flagler County. This slightly up from the same period last year when there were 25 and 28 closings respectively for the area. Seeing as though many closings occur at the end of the month, January stands to be a good start to the beginning of the year.
Will we see an increase in demand in the area? Again, all indicators are positive. Our area is primarily a relocation area and we are impacted by the ability and desire of people throughout the country to move here. I can tell you that calls are already coming in by those out-of-state interested in relocating to the area especially after the weather they were impacted with this winter.
Prices remains a big focus for buyers and sellers alike. Average and median prices saw about a 15% drop in 2009 for residential houses in the area compared to 2008. Price is an area that gets confusing when it comes to individual homes. Do those numbers mean that every home in Flagler County and Palm Coast dropped 15% in value? No. ‘Value’ of individual homes fluctuate over time and that value is impacted by factors that are unique to each home. For example, if we break down specific neighborhoods in the area for activity you will see those average and median prices can be vastly different in performance. There are also other factors which include things such as size, age, frontage (i.e. water), upgrades, condition, etc. which play into the value of an individual home. It is always important to NOT ASSUME and get aComparable Market Analysis for your particular home if you are interested in selling.
Short sales are the situation where the property can only sell for an amount lower than what is owed and is a pre-foreclosure situation. Right now they comprise about 35% of all homes listed for sale in Palm Coast and therefore are a significant amount in terms of the homes for sale. These closings tend to take more time because of the review process and the goal of the lender to reduce the loss and resolve how the difference will be handled with the owner. Currently there is new legislation (HAFA) which is designed to standardize the process with lenders and ‘speed-up’ the approval times. This is right now in it’s ‘infancy’ and this year should tell whether it will have the desired results or not.
Again, Short Sales are pre-foreclosure situations and if these properties are unable to be sold then they could add to the number of foreclosures for sale in the area. The positive is that although Short Sale scenarios contribute about 35% all of all homes for sale, they contributed 43% of homes sold in Palm Coast in 2009.
Foreclosures are obviously a hot topic when it comes to Real Estate. Foreclosures when it came to residential home sales in the Flagler county and Palm Coast area were actually very minimal in 2009. Of the 1,414 homes which sold in 2009 through local Realtors in Flagler County only 15% of those were Foreclosures. They also sold at an average of 53 days on the market compared to 149 days for all homes. Currently there are only 19 foreclosure homes available for sale through local Realtors.
The question remains what that will look like this coming year? Do banks have inventory of foreclosure homes that they have not posted for sale? The answers are not really clear and there is anticipation that the number offered for sale will increase this year. As the area’s past performance has shown, any increases should sell through rather quickly if so.
Although foreclosures tend to be great buys for buyers they have a downside to the overall market. For one they create competition for other sellers who are left competing against properties which are typically priced below market value. Foreclosures can also dampen the ability for overall price to recover in the area since again they typically sell for a much lower amount compared to more normal market climates. There is also the question of how many of the 30-some percent of short sale homes for sale would possibly become foreclosures. The bottom line to foreclosures is that if they do increase in the area, the goal is to sell through them quickly and we have seen great performance in the area in that regard.
To sum it all up, I see 2010 being a very positive time in Real Estate in the Flagler County and Palm Coast areas. Many may say that I would cite the positives just because I am a Realtor, but you really just have to look at the numbers to see that we are seeing some great overall trends. Steady increases in the total number of sales year-over-year and steady reductions in overall inventory are always positives. There are some challenges still ahead in terms of Short Sales especially and time will tell in terms of the impact of recent legislation and it’s ability to streamline and/or improve he process there. As I said at the beginning of 2009 and the same is true fro 2010, it will be an interesting year for Real Estate in the area.
Kathleen West, Realtor
Trademark Realty Group of Palm Coast