Orlando Florida Regional Housing Market Upadate April 2011

ORLANDO FLORIDA REGIONAL HOUSING

MARKET UPDATE

April 2011 

The latest data are in for Central Florida. Here are the highlights taken from the Orlando Realtor Regional Board for April 2011: 

Inventory 

The significant downward inventory trend continues! Currently there are now 11,480 housing units on the market through the Orlando Regional Multiple Listing Service – a drop of more than 1,100 units from March’s 12,533 inventory and 27% fewer than were available a year ago. This is a continuation of the trend that began in June 2010 when there were more than 16,300 units on the market. For  comparison, last April there were 15,766 and in December of 2008, there were 22,524 units on the market.    

More specifically, there are only 9,382 single family homes left on the market – down from 10,115 single family homes last month – 773 fewer than March and almost 21% fewer than a year ago and 1,467 fewer than were available in February. Condos account for 1,281 – 225 fewer than last month and 53% fewer condos than what was available a year ago. Townhomes & duplexes round out the numbers with 817, 95 fewer than last month and almost 36% fewer than last year’s supply. The current pace of sales equates to only 4.81 months worth of supply – the lowest since the housing peak. Six months of supply is generally considered balanced.   Under normal conditions, anything above is generally considered a buyer’s market and anything below is then considered a seller’s market.

Sales 

Despite the continuing drop in inventory, April sales were down almost 10% percent from April 2010 with 256 fewer closings than last April.   However, year to date, sales are up 2% from 2010. 

Of the 2,388 sales in April, 824 were “normal”, 609 were short sales and 955 were bank-owned.  This is a solid trend now where normal sales have outpaced short sales as buyers have apparently become disenchanted with the often-prolonged short sale process. 

Pending home sale were up in April by a little more than 4%   from March, but down 8% compared to last year.   

Condo sales decreased by almost 23% again in April when compared to last year at this time. Duplex, townhome and villa sales were also down by more than 10% over this time last year.  This may be due in part simply because there are far fewer on the market.

Again – as has been the long-standing trend, condos in the $1 - $50,000 price range continue to lead the condo sales and accounts for almost half of all condo sales (49.47%).

Homes spent an average of 104 days on the market in April, one days longer than March but a whopping 23 days more than this time last year. The average home sold for 94.10% of its then current listing price – a little more than last month. “Then current listing price” is an important distinction since a home may have been on the market with prior price reductions.  Thus, it may have ended up selling for less than the percentage cited from its original debut listing price. 

By county in the Orlando MSA, Seminole County posted its first decrease with a drop of more than 5% in sales over this time last year. Orange County was down almost 11%. Osceola came in at 13% above last April, but Lake County was down again for the third month in a row by almost another 3%.  No statistics for Volusia or Brevard were available (Volusia has several different realtor boards with both New Smyrna and Daytona each having their own and Volusia is officially part of the Daytona Beach MSA.  In addition, Brevard has its own Board).

Prices 

The drop in inventory has led to the third month in a row of price increases. The median price of an existing home rose to $105,000 from last month’s 103,000 and February’s $96,000, but still down 8.7% from a year ago. 

Remember - the median price above encompasses all sales. The median price for Bank Owned properties’ was $80,000, unchanged from last month but $6000 more than February. Short Sales’ median came in at $91,000, down from $102,500, last month.  Normal sales price continues to lead the median price breakout with $160,000, which was up from last month’s $152,500.  Keep in mind that many times Bank Owned properties require extensive repair work which can be reflected in the price. 

Affordability 

The Orlando MSA affordability index decreased to 251 from 255  and the first time homebuyer’s index also decreased to 178 from 181. 

This has been see-sawing backing and forth for some time now and is inversely proportional to pricing changes. 

An affordability index of 100 means that a buyer earning the state-reported median income has exactly the income necessary to purchase the median-priced home.  Anything over 100 indicates that buyers have more income than that which is required.   A score of 99 means the buyer is 1 percent short of the income necessary to qualify. When prices rise faster than incomes, the affordability index goes down and visa-versa.

Orlando Unemployment

 In December 2009 the rate was 11.3%. In December of 2010 it was virtually unchanged at 11.8%.The very latest numbers for Orlando Florida – for March 2011 we dropped again from February, 2011 to 10.4% from 10.8% and down from 11.3% last March.  Nationally, the number ticked upward to 9.0%. 

Other Discussion, Opinion and Points 

A Repeat - Low Inventory and High Unemployment Continues 

The trends we all want seem to have come back together this month. Prices did continue to rise, sales did slow, but inventory in still in a direct downward decline as foreclosures in FL dropped 59% from a year ago (see Tidbits below). The housing inventory levels here are the lowest since before the bubble.  Little more than 9,000 single family homes are on the market in the entire five county area.  Normally one would point out a shadow market of new homes that don’t usually use the MLS which would inflate the single family home availability number.  However, most of the builders are now using the MLS to some degree and with the lack of building in the past 3 or 4 years – there really isn’t much of a shadow market.    

However, without a drop in unemployment – and it remains to be seen here if we will mirror the nation in the most recent uptick – only a fraction of the would-be buyers can take advantage of the low prices and low interest rates.  

Again – it is important to note that these trends are developing as a result of market forces acting on their own. Thus, without government programs to get in the way, it should be quite interesting over the next few months to see how the market responds to the historically low inventory levels that still struggles to rebound. 

Tidbits 

Property Tax Break for Active Military – 2011 Deadline June 1.  Homesteaded property in FL owned by active military is now entitled to a property tax break tied to how much time they spend on active duty overseas.  E.g. if they were inIraq for 6 mo – they are entitled to a 50% break.  There are filing deadlines and the first one is June 1.  Contact your county property apprasier’s office for details.    

New Home Starts Down. National housing starts in April were down 10.5% to an adjusted rate of 523,000 per year.  This is 25% less than a year ago.  Economists consider a pace of 1.2M per year to be healthy. 

Florida foreclosures drop 59% from last year. April foreclosures in FL dropped 59% from a year ago, compared to 35% nationally.  Currently it is at a 40 month low.  The average foreclosure took 619 days to complete. Last year it took 470 days. In 2007 it took 169 days. 

Census Data Florida Up.   According to the latest 2010 census figures, Florida’s April 2010 population was 18,801,310, an increase of 2,818,486 since April 2000. Florida trailed only California and Texas in its numeric increase and 8^th in the nation by percentage growth.  

Biotech Up in Florida. Despite the weakening biotech industry nationwide,Florida has attracted 29 new companies during the last three years – a 21% increase – to a total of 165.  

Rents on the Rise.  Nationwide, rents have been inching up since last year.  This year they are predicted to rise another 4.3% - the fastest pace in years.  Much of the rise is attributed to lack of building multifamily units in the past years and the displacement of those living in foreclosed properties.  One of the things keeping the rents in check for now is the “shadow rental market” created by investors buying up properties and renting them out. However, good single family home rental properties are becoming more scarce inCentral Florida. 

Strategic Defaults Drop.  A report by JPMorgan cites that strategic defaults now account for less than 30% of all foreclosures.  In 2009 it was 60%.  As the economy has slowly improved, the number of strategic defaults has steadily declined. 

Until next month……..

Statistical Data and Graphs

ORRA Originated Sales April 2010 5.12% 15,766   5,116 5,221 10,832 1,331 579 1,540 2,644* 81* May 2010 4.89% 15,963   4,304 3,669 10,351 1,161 553 1,187 2,783* 83* June 2010 4.84% 16,304   4,470 3,736 9,625 1,343 743 1,294 3,059* 85* July 2010 4.67% 16,563   4,388 3,793 9,133 1,224 709 1,182 2,516* 84* August 2010 4.61% 16,535   4,146 3,892 8,945 1,277 613 1,285 2,566* 83* Sept. 2010 4.46% 16,359   3,984 3,654 8,713 1,169 637 1,301 2,374* 87* October 2010 4.28% 15,441   3,650 3,466 8,817 1,080 707 1,323 1,953* 91* Nov. 2010 4.48% 15,192   3,346 3,243 8,998 999 630 1,083 1,936* 96* Dec. 2010 4.92% 14,993   3,444 3,196 8,363 952 1,189 1,039 2,467* 97* January 2011 4.84% 14,398   3,478 3,747 8,777 1,009 573 1,102 2,041* 96* Feb. 2011 4.88% 13,480   3,202 3,777 9,223 934 499 1,018 2,170* 99* March 2011 4.91% 12,533   4,152 4,526 9,510 820 504 1,098 2,613* 103* April 2011 4.89% 11,480 72 3,391 4,156 9,955 788 458 1,161 2,388 104 ORRA Originated Sales

The statistics cited and the graphical data is provided by the Orlando Regional Realtors Association, of which we are a member. 

This report is intended to be for reference and informational purposes only.  The opinions expressed herein are solely those of New Southern Properties Inc. and are opinions. No purchases or investments should be made based solely on this report, this data, or the opinions expressed herein.  Real Estate purchases and investments are complex transactions. You are strongly urged to consult with your financial, legal and real estate consultants before making any real estate purchase or investment.