The last post focused on analyzing market trends in Fleming Island Plantation (FIP), west of US 17. We looked at how the annualized, average sale price changed based on the data used for the analysis. We compared detached, attached, and new construction. It is also important to understand how distressed inventory impacts a market.
Northeast Florida MLS provides three ways to segregate the distressed and non-distressed activity, so it is a little difficult to determine the exact number of distressed units. We can usually account for most with only a few modified searches.
The following chart illustrates the importance of understanding how distressed units impact a market. The blue columns represent the median sale price for each group of detached sales in Fleming Island Plantation. The red line represents the median price per square foot for each group.
The first column is all existing detached homes in FIP, column two is non-distressed activity, column three is bank-owned sales (REO) and Column four is short sales.
The median sale price is usually the first statistic I review for each group, but as column four illustrates, it can be misleading. If only the median sale price was used, a reader might conclude that short sales are performing better than non-distressed sales.
Digging a little deeper into the data we find that the short sales represented a relatively small number of the total sales (4) and the average living area of the short sales was over 3,000 SF, compared to around 2,450 SF for REO, and about 2,630 SF for non-distressed sales.
Using the median price per square foot, we see that non-distressed sales performed better and the REO and short sales sold over $10 per square foot lower.
Separating new construction from existing sales is often helpful as well, but there is only one new development currently underway in FIP and only a few closed sales at this time.
A large developer is seeking a zoning change on some vacant land around Fleming Island and if they are successful, we could see more residential rooftops in the near future. More on that subject next time.