What about my area?

Everyone who lives in this area has heard repeatedly about the increase in housing prices that we’ve seen throughout Volusia and Flagler Counties. For example, most people know that Flagler County is the fastest growing county in the nation (what a stat)! And several people saw the article in the New York Times in January of this year called “Beyond Fast Cars and Spring Break, a New Daytona Rises.” There were also the articles in Monday Magazine in June of 2004 and repeated in June of 2005 that listed the top places for expected price growth in the country, both placed the Greater Daytona Beach Area in the top 5 and one of the fastest in Florida. Given all of this fantastic news, many people wonder, how these dramatic increases affect them. That’s the purpose of this article.

This “Market Update” will be broken into two separate updates. Because of the number of different areas, we’ll be examining Flagler County and the Daytona Beach Area separately. We’ll concentrate on Single Family Homes as they tend to be the most common investment although it is worth noting that Palm Coast still has a number of vacant lots available and they too have seen meteoric growth over the past few years.

Now then, let’s review the way Realtors look at an area. Each Multiple Listing Service contains what we call “Areas.” These aren’t always as simple as you might imagine. For example, in Flagler County, all of Palm Coast is one area. Let’s review the various areas:

  • Bunnell
  • Flagler Beach
  • Palm Coast
  • Northern Peninsula
  • Unincorporated Western Co.
  • Out of County
  • Southern Flagler Co.
  • Southern Peninsula

 

For each area with sufficient transaction volume, we’ll provide a brief overview to help homeowners and potential homeowners understand the value and the growth. After that, we’ll compare the regions to one another. Let’s start with Flagler Beach:


Figure A – Growth in Flagler Beach

At first glance, there appears to be some volatility in the transaction counts, however by looking to the left hand column we can tell that the transaction counts are low enough that such volatility is expected. The average price per square foot is relatively stable and shows a very clear growth pattern. In January of 2004 it is relatively steady around $180/sq. ft. but you can see a quick rise through 2004, stabilization, and then some stair step growth leaving it around $280/sq. ft. today. That’s a growth of about 56% over the past two years with the bulk of it in the previous eighteen months.

Next let’s review the North Peninsula. This area exists north of Palm Coast on the Peninsula side of the river and continues all the way up to Marineland.


Figure B – Growth North Peninsula

Here you can see more price volatility. The prices and the transaction counts vary widely from month to month. However, the price growth on the whole is still very clear. By comparing the average of the late 2003 period to the average today, we see a price change of approximately 45%. That’s an excellent growth rate but it has higher volatility on the whole and fewer transactions which means that historically it could have been more difficult to exit the investment. However, there is substantial growth in that area and more seems certain on the horizon.

Bunnell, the Unincorporated Western County, the Southern County and South Peninsula do not have sufficient transactions to make a detailed review possible.

For those of you who aren’t familiar with Flagler County real estate it is important to note that growth is occurring everywhere but it is particularly growing in Palm Coast. Compared to the rest of East Volusia and Flagler Counties, Palm Coast tends to have much newer homes and more new development. The city is a planned community and is arranged in sections. In general, each section is associated with a letter and all streets in the section start with that letter. We will first review it in the aggregate and then provide a more detailed look.


Figure C – Palm Coast Growth

First, you’ll notice the substantially lower volatility. That is simply related to the number of transactions that take place in Palm Coast compared to the rest of the county. The large dip during the end of 2004 and the beginning of 2005 is primarily due to the hurricanes which made transferring a house very difficult as insurance was hard to obtain while storms were in the vicinity. You’ll also notice the very consistent growth through the entire period. The overall price per square foot growth is at 41%. This is not as high as some of the other areas but it does not suffer the same volatility either. Let’s explore some of the sections of Palm Coast.


Figure D – Activity and price by Palm Coast section

The sections are listed here in terms of the highest to lowest transactions in the area and we are also comparing average price per square foot. The date range included herein covers January through October of 2005. Next let’s review the change to average price per square foot by section.


Figure E – Change in average price 2004 to 2005 by section

Figure E gives us a view of the change in price between 2004 and the first three quarters of 2005. Interestingly, while we saw earlier that section C has the highest price per square foot it also ranks exceptionally well in rate of price growth. In addition, this view allows us to look at the impeccable growth of section U.

For more detailed pricing information about your home in particular or a neighborhood that you are interested in, please contact your Adams, Cameron & Co. representative at any office throughout Flagler and the Greater Daytona Beach Area or online at www.daytonare.com.

About the author – John Adams is a native of the Daytona Beach Area and is a third generation real estate broker. His education includes a Bachelor’s of Business Management degree from Florida State University and a Masters of Business Administration from The Kellogg School of Management at Northwestern University. His business experience includes several years with Arthur Andersen’s Business Consulting organization during which he handled engagements domestically and internationally. He was a cofounder in a marketing company which he grew from startup to $40 million dollars in revenue. He took his first company public on the NASDAQ stock exchange at the age of 29.