- November 23, 2024
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There is no historic precedent for the current housing market. Never before have so many homeowners been underwater — owing more than their home is worth. Housing market cycles tend to be about 18 months long. We are now seven years from the apex of the bubble.
Most observers do not recognize a market turnaround until prices begin to rise. But prices are a lagging indicator of the market’s direction. Local home sales peaked in June 2005 when 338 Flagler County single-family homes were sold through Flagler Multiple Listing Service. Sales dropped an astonishing 48.5% in the following six months. Median selling prices continued a momentum-driven rise, gaining 21.2% during the same period.
Sales lead prices during the downturn. Home sales bottomed out in January 2008 and have risen slowly but steadily since. But driven by momentum, prices continued to decline for four more years.
In January, I said that we would look back at the end of this year and say, Wow! The signs of a sellers’ market were there, but the buyers and sellers hadn’t yet noticed. There was no sense of urgency among potential buyers. Now they are noticing.
November home sales are still being reported, but are already comfortably ahead of last year’s results. It was the 19th consecutive month of year-over-year sales gains and the third month of a year-over-year rise in the median selling price.
Have we returned to a normal market? No, it’s still crazy in many ways, magnified locally well beyond national statistics. Only 46.8% of November Flagler home sales were non-distressed. The balance were either lender-owned (24.5%) or short sales (28.8%). Cash sales accounted for 54% of all sales.
The average lender-owned selling price was slightly higher than the average listing price. Bidding wars are becoming more common.
The data on the box on this page is revealing. Note that the market mix remains very stable. The percentage of foreclosed homes sold by lenders is unchanged from a year ago, as is the percentage sold via short sales. Cash sales continue to represent about 54% of all home sales. So the apparent strengthening of the market cannot be attributed to a decrease in the sale of distressed properties or to an easing of lending or appraisal standards.
Signs of an increasingly strong market
The number of homes sold is up. So too is the total value of homes sold. DOM is down in nearly all segments, while median selling price is rising across the board. The median selling price per square foot is on the upswing. Twice as many single-family home building permits were issued. The inventory of homes listed for sale in Flagler MLS is down while the number of homes under a sales contract is up.
