- May 4, 2024
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Flagler County February home sales were brisk, and it wasn’t only because of the extra day. The number of homes sold was up 52% from February one year ago. This gain follows a 52.5% gain in January and marks the 10th consecutive month of year-over-year gains. The total transaction value of February’s home sales was $22.4 million, up 49.8%. January’s total was up 27.4%. There is no doubt: The market is turning the corner.
In spite of tight credit and appraisal guidelines, the local housing market is surprisingly healthy. There are only 951 single-family homes listed for sales on the Multiple Listing Service. This represents only 6.8 months of supply at the current sales rate. An additional 578 homes are under contract. Fully 56.4% of Flagler’s home sales were cash transactions, significantly above the national average. Of 33 condos sold via MLS, 27 were reported as cash sales.
Distressed properties continue to dampen prices. Lender-owned and short sales represented 48.6% of all February MLS single-family home sales. The national average is about 30%.
Banks have picked up the foreclosure pace again. The clerk of court logged 138 new filings during the month, the highest mark since August 2010 but still well off the record 280 filings in July 2009. Some analysts credit the recent $25 billion foreclosure settlement between five major banks and 49 state attorneys general for the increase in foreclosure activity.
A foreclosure filing is only the beginning of a long process. The majority of foreclosed properties does not reach the foreclosure sale stage. Still, 100 Flagler properties did so in February. Refinancing, loan modification, short sales or deed in lieu often terminate the process. Banks have begun to realize that foreclosure sales are the most expensive way for them to settle.
Foreclosing lenders are facing more opposition, too. Homeowners are increasingly educated about alternative strategies. Many attorneys have become versed in foreclosure defense. Short sales are still problematic, but buyers, real estate practitioners, closing companies and lenders have become more proficient. I look for a continuing trend toward short sales.
Homeowner associations and condominium associations will also benefit from a shift to short sales. To clear title, association liens for unpaid assessments must be paid, with one exception. When a lender holding the primary mortgage takes possession through a foreclosure, it is only responsible for the lesser of up to 12 months of past due fees or 1% of the original loan amount. Some associations carry delinquencies representing several years of non-payment. For them, collecting past due fees at a short sale closing will be a welcome outcome.
