The latest hot political talking point is Flagler County/Palm Coast is “over-building,” and that this “over-building” must be reigned in. The slippery slope continues from there. These new homes and the residents in them are going to clog our roads, and there are no jobs for them. These horrible new residents will, presumably, pollute the environment and destroy open space, as well. Simply put, our region is going down in flames. We must deal with “over-building.”
The hype train has left the station. ... Here’s why we’re not on it:
The reality is Flagler County is not “over-building;” whatever that means. I chalk the term up to election-year politicking. The truth is every county in Florida has thousands and thousands of future homes approved and ready to eventually be developed. Ninety-five percent of those future homes will not be available for sale on the housing market within four years.
It’s the business of building and residential land development in America (not just Florida). What most folks don’t consider is that it takes years (and millions of dollars) to transform a piece of land into a neighborhood. Usually, four years is the earliest the first home in a subdivision is ready for the market, and it takes years beyond that for the remaining houses in the new neighborhood to become reality.
When we hear: “Thousands of homes are permitted and ready for development.” We say: “Yeah, we know, it’s normal. Stop freaking out.”
And lets focus on “the market” for a moment. Companies or individuals that have millions of dollars to invest in creating neighborhoods will not move forward on building those neighborhoods until they are satisfied with market conditions. (I ran a homebuilders association in a past life; trust me on this one.) With Florida’s consumer sentiment at near-decade lows (67%) and mortgage interest rates at 7-8%, it’s highly unlikely that the thousands of homes that “could be” developed, would actually be reality (aka visible) anytime soon. You could probably get a bachelor’s degree faster than a neighborhood can be built with the first home available for sale.
As for the housing market, it’s still strong locally and operating at slightly above-normal levels. The Flagler County median housing price is $365,000 (August 2023). Local Realtors sell approximately 200-250 homes per month in Flagler County. The cost of housing is a legitimate local issue, as median sales prices have gone up $100,000 over the last three years.
What has us confused is why some government officials and candidates for local office would think that limiting the supply of housing (the suspected solution to “over-building”) would result in anything other than a massive increase in the price of housing? It’s simple supply and demand. The below establishes demand (population growth) will continue to be strong. What would limiting the supply of housing do? Increase price. Great for all the residents that own property in Flagler already (including me); bad for anybody else without tens of thousands in down payment dollars and perfect credit.
This isn’t a plea to build more housing, though it may sound that way, because our region does need to build more housing.
- Up to 80,000 net new residents could call Flagler home between 2020 and 2040 (Source: UF BEBR Institute, High Growth Trend)
- Most demographic consultants agree on a general range that has an average of 2.4-2.5 residents per home. (2021 Census estimate = 2.49 residents/unit.)
- The math is simple once the research is done: If Flagler County really does grow by 80,000 net new residents by 2040, we need approximately 33,000 total new housing units (houses, apartments, duplexes) during that same time.
Is Flagler County/Palm Coast over-building? Not. Even. Close.