- November 25, 2024
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The long-awaited housing market recovery is here — at least in Palm Coast and Flagler County. The Flagler Multiple Listing Service shows 177 home sales were closed in June, the most in any month since June 2005. The median selling price was $119,000.
The total dollar value of second quarter single-family-home transactions reached a level not seen since the second quarter of 2008.
Days on the market for the second quarter were 107, the lowest since GoToby.com began tracking days on the market in 2008.
The inventory of unsold single-family homes for sale recently dipped below 1,100. Inventory was above 2,600 during the worst of the market slump.
Absorption rate
Increased sales and declining inventory reduce the absorption rate. Absorption rate is a mathematical measure of the relationship between supply and demand in the marketplace. It’s derived by dividing the total inventory of homes for sale by the number of homes sold in the previous month.
The resulting number (absorption rate) represents the number of months it would take to sell the number of homes represented by the current inventory at the current price. It’s a strong indicator of current market conditions.
It’s generally believed that the absorption rate tells us if we are in a sellers’ market (1 to 4), a normal market (5 to 6) or a buyers’ market (7 or greater). (See Box on this page.)
The current absorption rate for Flagler County single-family homes is 6.8, down from 20.9 in August/September 2007 when the median price was $210,000.
Clearly, the local market is improving, even though prices remain stubbornly low.
When will prices begin to rise?
They will remain at or near current levels as long as buyers think they can be very selective, passing up opportunities because they believe the supply of deals is continuous.
They will begin to climb when buyers begin to feel the pressure of a shrinking inventory — when they begin to miss out on opportunities because they waited too long. I think that time will arrive soon.
