- November 23, 2024
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I've often said that all real estate markets are local. National and statewide statistics are helpful in understanding large shifts in the market but tell little about the neighborhood in which we live.
Multiple Listing Service data shows that there are only 721 single-family homes listed for sale within Flagler County. June and July averaged 190 home sales, meaning the existing inventory represents only 3.8 months of sales at existing prices. This number is called 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 product (for sale) by the number of units 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, a buyers’ market, or a normal market.
• Sellers’ Market – Rates 1-4
• Normal Market – Rate 5-6
• Buyers’ Market – Rate 7 and above
Absorption rate analysis can pinpoint strong and weak segments of the market. The median selling price for Flagler County single-family homes is $120,000. The market shows the most strength among distressed properties, most of which sell below the median price.
Incredibly, there is only one month's supply of homes available for sale in the county under $120,000. In the range between $120,000 and $300,000, there is four months of inventory available — still a sellers' market. For homes listed above $300,000, the absorption rate is 17.3.
Belle Terre, Cypress Knolls, Indian Trails, Lehigh Woods, Matanzas Woods, Pine Grove, Pine Lake, Quail Hollow and Seminole Woods have no listings above $300,000. Grand Haven, Hammock Dunes and Ocean Hammock have no homes available below Flagler's median selling price. But the higher price points within the gated communities are reflected in their much higher absorption rates.
Clearly, the action is at the low end of the market, which explains why prices have resisted the upward pressure normally expected in a sellers' market.
