Orlando Florida Regional Housing Market Update February 2011

Orlando Florida Regional Housing Market Update

February 2011

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

Inventory 

Currently there are now 13,480 “units” on the market through the Orlando Regional Multiple Listing Service. This is yet another decrease of almost 1,000 units from January’s inventory and a whopping 43.4% less than a year ago. It continues the trend that began in June when there were more than 16,300 units on the market.  The inventory has not been this low since March 2006. For  comparisons, last February it was 16,051 and in December of 2008, there were 22,524 units on the market.    

There are 10,889 single family homes on the market – another 1,030 fewer than January and almost 9% fewer than a year ago. Condos account for 1,544 – 85 fewer than last month and 41% fewer than a year ago. Townhomes & duplexes round out the numbers with 1,047, 106 fewer than last month. The current pace of sales equates to 6.47 months worth of supply. Last February the supply was 8.14 months. 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 

February sales were up 10.5 percent over February 2010 and there were 44 more closings in February, than there was in January. 

As has been the trend for some time now, Bank-owned sales led the break out of sale-types with 1,041.  Normal sales accounted for 553 closings and short sales came in at 491.   This continues the newly formed trend whereby short sales and “normal sales” are nearly even with one another and may indicate that buyers are becoming disillusioned with the short sale process. 

Pending home sales were down in February by a little more than 2% (9,223) from February of last year (9,462).  

Condo sales increased by 2.53% over February of last year. Duplex, townhome and villa sales were up 39.75% over this time last year.    

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 more than half of all condo sales (55.14%). 

Homes spent an average of 99 days on the market in February, three days longer than January and 8 days more than this time last year. The average home sold for 94.47% of its then current listing price – the same as last month and the month before that. “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 continues to lead with a 16% increase in sales over this time last year.Orange County was up 10%, Osceola came in at 21% above last February, but Lake County was down again by almost 10%.  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 

Bank owned and short sales continue to push prices down. The median price of an existing home dropped by 8.5% to $96,000 from last February’s $105,000.  

Remember - the median price above encompasses all sales. The median price for Bank Owned properties’ was $74,000, $1000 less than last month. Short Sales’ median came in at $98,000, up from $94,500 last month.  Normal sales continue to lead the median price breakout with $155,000 up from $145,000 last month.  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 274 from 278 and the first time homebuyer’s index also decreased to 195 from 198. 

This has been see-sawing backing and forth for some time now.

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 November 2010 it was 11.9% and in December of 2010 it was virtually unchanged at 11.8%.In January, 2011 we stand at 11.7%, unchanged from a year ago and still well above the national average.  

Other Discussion, Opinion and Points. 

Are We There Yet?

Most of the positive trends continue again this month.  The inventories here in the  Orlando Florida area are at levels not seen since March 2006 - in spite of all the foreclosure activity. It appears the foreclosure activity is what is keeping the prices down despite the drops inventory.  From all indications – a property priced correctly in today’s market will sell.  

But The Unemployment Question Still Remains 

Unemployment continues to hamper Florida and Central Florida, including the Orlando region is no exception.  December showed 11.3% unemployed, but January was back to 11.7% - unchanged from a year ago.  We are still well above the current national average of 8.9%.  We firmly believe that no sustained recovery is possible until unemployment shows significant improvement. 

This can be seen with the nationwide 22.5% decrease in new home construction seen in February.  Without jobs, many cannot afford to move into a new home or hang on to the one they have.  

Foreclosure Stats for 2010 – Its Not What You Think 

Generally, there are three levels of foreclosure.  

Lis Pendens – where at least one notice of non payment has been sent.  

Notice of Foreclosure Sale– an actual sale is scheduled.  

Bank Owned – the bank actually takes back the house.    

Despite all of the news, in 2010 inFlorida–  some 2,800 homes were taken back by lenders.  On the other hand 180,402 – were in the first category and another 140,105 were in the second.  The number of homes taken back represents less than 1% of the total.  All of the categories are counted for the news however – which serves to make headlines. 

However, both Osceola and Orange counties did find themselves in the top five -  Osceola at number three and Orange at number five.  No counties in the Orlando area – including Polk, Brevard and Volusia – were found in the bottom five. 

Voters Overturn Themselves

An interesting development regarding development.  St. Pete Beach voters recently voted to overturn their own amendment wherein community planning and development was voted upon before it could be approved.  Also known as “Hometown Democracy” – it was adopted in 2006 and proved to be unworkable. 

Down Payments Up  

As would be expected from the above foreclosure stats, down payment requirements have gone up - and rightly so.  The average down payment in 2007 was only 5% - which meant many owners had very little “skin in the game”. Now it averages 20% as lenders get more realistic in their practices.   Currently FHA requires only 3% and that may soon change as well.   We think more down is a good idea – it keeps some from getting in over their heads and keeps others from simply walking away.  Both serve to stabilize the market in the long term. 

Bank Repairs? 

More banks are now investing some money in repairing foreclosures in an attempt to draw a wider array of potential buyers.  Prior, many times a home was simply in such need of repair no buyer could get financing to purchase it.  This meant the only suitable buyers were the professional rehabbers with cash – a fairly restrictive demographic.  

By making the necessary repairs and adding some inexpensive cosmetic touches (paint and/or carpet), these banks are finding that the properties can sell faster and for more – recouping the repair funds and getting the property off their books faster. 

In turn – this is good for the housing market as it moves vacant inventory faster.

Until next month……..

If you or someone you know is in the market to buy or sell a home, townhome, condo or light commercial property – please call us and let us help !  Your referrals are always very much appreciated !

Statistical Data and Graphs 

ORRA Originated Sales Feb. 2010 4.96% 16,051 4,586 4,043 9,462 960 601 1,064 1,973* 91* March 2010 4.99% 16,223 5,282 4,662 10,179 1,195 680 1,233 2,610* 91* 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 2,085 99 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.