Orlando Florida Regional Housing Market Update February 2014

THE ORLANDO FLORIDA REGIONAL HOUSING MARKET UPDATE

February 2014

The latest housing market data are in for Central Florida, including Lake Mary Florida, Longwood Florida, Sanford Florida, Winter Springs Florida, Oviedo Florida, Apopka Florida, and Altamonte Springs Florida. Here are the highlights taken from the Orlando Realtor Regional Board ending 

January 31, 2014 (the latest now available):

Inventory 

After a one month hiatus, January resumed the upward trend of late for inventory numbers. We now have 9,927 homes on the market, up from 9,421 last month.   This represents a 35.32% increase in inventory from a year ago, and a 5.37% from last month.  This represents a 5.52 month supply – which means we are finally approaching a balanced market.  

Supply is tied to both inventory and pace of sales.  Six months of supply is generally considered balanced. Under normal economic conditions, anything above six months is generally considered a “buyer’s market” and anything below is then considered a “seller’s market”.  However, these are terms used loosely as descriptors. Buyers ultimately set the market price no matter what the inventory numbers are at a particular moment. 

Single family home inventory is up 38.32% from a year ago and  condo inventory is up 19.32%.  

The inventory number includes all homes: single family homes, condos, duplexes and townhomes.  For comparison: In December of 2008, there were 22,524 on the market, but in March 2013 there were only 6,937.    

This inventory is what is reflected on the Multiple Listing Service (MLS). It is typical for new home construction companies to elect not to put any or only a portion of their inventory on the MLS and instead try to rely on their overall community and brand marketing to draw in buyers.  As we reach a balanced market, more of these will be placed on the MLS for the exposure since competition for Buyers will increase with inventory numbers. 

Sales 

Overall sales were down 10.67% from a year ago and down  26.32% from last month.  Reflecting the holiday season wherein many would-be Buyers are distracted with holiday preparations and goings-on, a drop in sales is not unusual for January. 

Of the sales in January, 1,126 or 62.56% were “normal”, 211 were short sales (11.72%) and 463 (25.72%) were bank-owned. The number of normal sales increased by 13.05% compared to a year ago and the number of short sales fell by a whopping 56.13% while bank-owned sales decreased by a significant 13.94% over the same period. This continues the now-standing long-term trend of normal sales taking more and more of the sales total than those sales under distressed conditions.  However, for comparison, previous to the housing boom-bust of 2006-2007-2008, the latter two numbers were almost always in the single digits.  

Also of note is a trend developing wherein banks are starting to choose foreclosures over short sales as prices have risen substantially in the past few years.  In many markets it is making more sense for them to foreclose with the idea of getting more than they would get in a short sale.  Whether this actually holds true remains to be seen. 

Single Family Home sales decreased by 11.38% over a year ago, and down 28.57% from the previous month. Condo sales were down 13.91% and villa/townhome sales remained relatively flat again this month with only a .54% gain.    

Homes spent an average of 72 days on the market in January –  two days more than last month and just a bit more than a week less than a year ago. The average home sold for 96.35% of its then-current listing price. “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 for sales compared to a year ago: Seminole County was down 7.85% from last January, Orange County was down 10.31%. Osceola came in down 11.56%, and Lake County decreased by just .52%. No statistics for Volusia or Brevard were made 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 average median price of all homes sales has risen 18.07% from a year ago to $146,950. The Orlando Florida metro area market has now posted positive year-over-year gains in price for 31 consecutive months.  

However, remember - the median price above encompasses all sales. Individual categories can fluctuate within the median. However, this month, as was the case last month, prices year over year rose in all categories. Normal (no distress) sales rose 10.81% to $171,750 from this time last year, short sales rose 11.11% to $120,000 and Bank-Owned averages increased 11.92% to $108,000 compared to a year ago.  

Affordability 

The Orlando MSA affordability index increased to 191.09 and the first time homebuyer’s index increased to 135.89.   

Each index 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 average buyers earning average incomes (adjusted for the MSA) 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 

The latest numbers for the Orlando Florida MSA – for December was 5.8% down from 5.9% the previous month.  A year ago it was 7.7%. The national average is currently 6.6%   

The statistics cited 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.