Orlando Florida Regional Housing Market Update June 2010

ORLANDO FLORIDA

REGIONAL HOUSING MARKET UPDATE

June 2011 

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

Inventory 

The significant downward inventory trend continues! Currently there are now only 10,559 housing units on the market through the Orlando Regional Multiple Listing Service – a drop of almost than 1,000 units from April’s 11,480 and 400 fewer homes than last month. The inventory is 35% less than it was 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 comparisons, last June there were 16,304 homes on the market and in December of 2008, there were 22,524 units on the market.    

There are now 30% fewer single family homes on the market then there were a year ago. In addition, Condo inventory is down 54% from 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 4.37 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, June sales were down almost 21% percent from June 2010.  However, year to date, sales are up almost 2%.   

Of the 2,418 sales in June, 963 were “normal”, 658 were short sales and 797 were bank-owned.  This continues the solid trend now where normal sales have outpaced short sales as buyers have apparently become disenchanted with the often-prolonged short sale process.   

Condo sales decreased by almost 36% in June when compared to last year at this time. Duplex, townhome and villa sales were also down by more than 30% over this time last year.   

This may be due in part simply because there are far fewer on the market.

Homes spent an average of 103 days on the market in June, one day less than last month. The average home sold for 95.10% 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 for sales compared to a year ago: SeminoleCountyis down 27%,Orange County was down almost 24%. Osceola came in down 16%, but Lake County reversed its four month slide and was actually up a little more than 2%.  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 median price of an existing home rose to $110,000 from last month’s $105,000, but still down 4.35% from a year ago (although this is a dramatic decrease in declines from years gone by).  

Remember - the median price above encompasses all sales. The median price for Bank Owned properties’ was $80,310, almost unchanged from last month.Short Sales’ median came in at $99,000, up from last month - but has hovered around this mark for some time now. Normal sales price continues to lead the median price breakout with $158,000, which is now 40% higher than it was a year ago when the price of a home sold through “normal channels” was $112,700 (A "normal" sale is an "arm's length" transaction between two parties). 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 249 and the first time homebuyer’s index also decreased to 177. 

This has been n this general range for some time now. Changes are 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 November 2010 it was 11.9% and in December of 2010 it was virtually unchanged at 11.8%.The very latest numbers for Orlando Florida – for May 2011 we dropped to 9.9%.  Last May we stood at 10.9%. Nationally, the number ticked upward to 9.2% for June.

Other Discussion, Opinion and Points.  

Unique Times 

Orlando’s housing market is certainly illustrates these unique times.  Home inventory is the lowest it has been in 6 years.  New starts are virtually at a stand still. The inventory has little more than 4 months of supply. These would all bode a housing boom on the horizon – but despite months of these trends in the making – no such is anticipated. 

One reason of course is the unexpected rise in unemployment to 9.2%.   Employers are hiring again, but they are not filling every old position.  The lean times have made the companies leaner in a more permanent way and many it seems are likely to try to get on with hiring as few as possible to keep profits up. 

Another may be the incessant discussions of another foreclosure bubble forthcoming.  While this certainly may be true – it has been talked about for more than a year and, inOrlandoat least, has failed to materialize in any way.

One thing has become clear; The media pundits are as unlikely to accurately predict the strength or future of the housing market as they are to accurately predict the weather a month from now. 

It is worth noting that while many of the actual numbers of sales are down from last year, there are two compelling reasons to explain the drop.  First, June of last year was the end of the failed income tax credit program in which a tax credit was given for purchasing a home.  The second, is that there are simply significantly fewer homes for sale now – which virtually guarantees fewer sales being possible.   Much of the inventory is picked over and many of the homes left on the market are either grossly overpriced, in highly undesirable areas, or in such poor condition as to not be worth repairing.

 Notable Tidbits 

Vacancies Down, Rents Up. Rental rates are up about 4% over last year and vacancy rates are down to 6% according to Reis Inc. Generally a 10% vacancy rate is considered a balanced rental market. 

New Home Scam. There is a current scam whereby false deeds are being recorded and those filing such deeds are then claiming to own a foreclosed home. Be careful from who you purchase a foreclosure to be sure the sellers actually have right to the property. 

Free Credit Score Reports and an Explanation.  After July 21^st, a credit report used to set credit terms, deny or terminate credit terms or if used to implement changes, will require that the would-be borrower / debtor be provided a copy of the report and the criteria on which the decision was based including the four factors which most influenced the decision.  

Feds Seek Life Term for Local Banker.  Taylor Bean Whitaker’s collapse in 2009 put some 2,000 people out of work in Ocala and other parts of Florida and ended up taking down Birmingham-based Colonial Bank.  The alleged orchestrator of that fraud and then-majority owner, Lee. B. Farkas, now faces a possible sentence of 385 years after his conviction in April.  Six others involved have received sentences ranging from 90 days to 8 years.   Colonial lost some $500 million and two other banks Deutsche Bank and BNP Paribas lost almost $2 billion over the seven year scheme. 

If Not For Love….then for home equity.  A new study shows that when home values decrease, married couples are more likely to stay together for the sake of home equity.  Couples who rent are more likely to part ways.   The study was conducted using housing data from years 1991 to 2010.

 WE APPRECIATE YOUR REFERRALS!

Statistical Data and Graphs

ORRA Originated Sales 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 2,464* 104* May 2011 4.66% 10,969 282 3,145 3,678 10,210 841 396 869 2,486* 104* June 2011 4.56% 10,559 461 3,204 3,680 10,087 851 485 848 2,418 103 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.