There has been a lot of talk and interest lately on what will happen to the Real Estate Market in Palm Coast once the Homebuyer’s Tax Credit expired. While it is true that closed sales have been increasing and will probably continue to move in a positive direction for many months due to buyers rushing in to sign contracts prior to the April 30th cutoff date…. pending sales are definitely showing a slow down in buying activity in the Palm Coast Real Estate Market. To clarify, the numbers on the chart below show the homes that went pending in each month, not the total carryover of pending homes year to date. As you can clearly see on the chart, during a time when pending sales should be increasing, they are not.
Data out from the NAR show existing home sales in April jumped to 5-month highs. That is great news…until you dig further into the data and see the rest of the story.
CNBC’s Diana Olick….who in my opinion has been spot on with just about every turn in the market, shares with us:
Today we saw a disappointing price report from researchers at S&P/Case-Shiller. This report shows home prices in March and quarter to quarter. The results were negative, and largely unexpected.
We saw sales of existing homes bump up in April, but that’s based on closings, so those were contracts signed in February and March. A new report, the Campbell/Inside Mortgage Finance Monthly Survey of Real Estate Market Conditions, finds, “First-time homebuyers started to desert the housing market in April, ahead of expectations.”
“We pulled forward a tremendous amount of demand this year, and we are starting to pay the price for it here in May,” says Buck Horne of Raymond James. “We have already seen a 35 percent drop in purchase applications in the past two weeks, permits were down 11 percent in April, and we have seen spot lumber prices drop 25 percent since the end of April.”
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I am not a fan of news that is not such a rosy picture of the Palm Coast Real Estate Market, but I am also not the type of REALTOR® that will sugar coat the current conditions and try to convince you that everything is just fine and we have pulled through this mess and are successfully on our way to happy times again.
I do think there are some very excellent values on homes and condos in Palm Coast and Flagler County right now….you just need to do your homework, be patient and prepared to move quickly when the excellent deals pop up.
I believe that we will continue to see a bit more of an erosion in median home prices as more short sales and foreclosures come on to the market. The luxury home market in Palm Coast will probably see the most dramatic discounts going forward. Why? Well….
Owners of expensive homes “were able to stave off foreclosure longer,” says independent real estate analyst Jack McCabe, CEO of McCabe Research and Consulting in South Florida. “Lower-end homeowners were the first ones to see the escalating foreclosures, because they generally do not have the cash reserves or credit available that the luxury homeowners do. They had the ability to take their credit cards and pull out thousands of dollars, while the lower-end buyers were already tapped out.”
McCabe expects foreclosures in the high-end market will increase into 2011.
There also seems to be a trend emerging in people just getting tired of paying for properties that they are finally admitting will not be worth what they paid for them for many, many years to come…. if ever again. Short sales continue to dominate the Palm Coast market and we are not seeing a slowing in that.
60 Minutes even recently featured a story about an increasing amount of homeowners that are just making the decision to walk away. A sad but very true fact.
To put you at an advantage in finding those “GREAT DEALS” you can become a member of our Hot Property Alerts, subscribe to the Palm Coast Real Estate Blog, and utilize our experience as Certified Distressed Property Experts, since the majority of the “ GREAT DEALS” in our market are short sales and bank owned foreclosures.
I would love to hear any comments….so feel free to leave me a comment about why you agree or dis-agree with my cloudy crystal ball.