Orlando Florida Regional Housing Market Update June 2012

ORLANDO FLORIDA

REGIONAL HOUSING MARKET UPDATE

June 2012

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

MAY 2012 (the latest now available):

Inventory 

There was another drop in housing inventory this month from last month. This continues the decline in residential inventory in the Orlando market. Twenty out of the last 22 months has seen Orlando’s housing inventory decline. Currently there are now only 8,243 housing units on the market through the Orlando Regional Multiple Listing Service - down from 9,258 in January of this year and 8,642 last month.  This includes single family homes, condos, duplexes and townhouses. Last May held an inventory of 10,969.  In December of 2008, there were 22,524 on the market.  At the very height of inventory in early 2007, there were more than 28,000 homes on the market. 

Overall inventory is down almost 25% from a year ago. Single family inventory is down 28%. The current pace of sales equates to only 3.53 months worth of supply – the lowest yet and down again from last month. 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 

There were 2,337 home sales in May a drop of more than 5% from last May and a decrease of a little more than 4% from last month.   

Of the sales in May, 1,107 were “normal”, 642 were short sales and 588 were bank-owned – marking almost an even split between normal and distressed sales – a striking contrast to a year ago when almost 70% of the sales were distressed.     

Condo sales decreased by almost 17% in May when compared to last year at this time. The under $50,000 price range accounted for 32% of those sales and have dominated condo sales since March of 2009. Duplex, townhome and villa sales decreased by more than 8% from this time last year (206 units in May). Most fell within two range categories - $1-$50,000 and  the $100,000 - $120,000 price range.    

Homes spent an average of 85 days on the market in May, down 3 days from last month and almost three weeks less than a year ago. The average home sold for 95.57 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 up over 12% from last May, Orange County was down 8%. Osceola came in down 13%, and Lake County has continued its reversal - up again just over 24%.  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 median price of an existing home jumped 9% in May 2012 from $110,000 in May 2011 to $120,000. This is an increase of 2.5% over April and represents an increase of over 11% since January.

Remember - the median price above encompasses all sales. But in all categories the prices did rise in May. Normal sales rose to $160,000 from $155,000 last month and short sales rose to an average of $108,000 up from $102,000 last month and Bank-Owned averages   increased to $83,500 from $80,000. 

Affordability 

The Orlando MSA affordability index decreased to 250 and the first time homebuyer’s index also decreased to 178, almost twenty points lower than it was 90 day ago. 

This had been see-sawing backing and forth for some time, but is now trending downward as prices continue to increase.  The indexes 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   December of 2010 it was 11.8%. The latest numbers for Orlando Florida – for April 2012 - we are at 8.2% - down from 10% a year ago.  The national average in April was also 8.2%. 

Other Discussion, Opinion, Points and Tidbits.  

While there is no dispute as to the state of the economy today, its direction after the election will be debated endlessly until November sixth.  At this time, in light of his promises 3 ½ years ago and his failed policies since then, there is little doubt that President Obama has some explaining to do.  Whether the presumptive nominee Romney can capitalize is only a matter of conjecture this far out. 

Because of this, there are still many private sector markets sitting on the sidelines to see which way November will turn out. 

However, the local housing market continues to improve in nearly every material category.   Except for the homes in excess of $1M, homes priced appropriately and in reasonable shape now often have multiple offers and are under contract in a matter of days after coming on the market. 

Unfortunately many would-be buyers are still under the impression that the market is that of 2008, 2009 and 2010.  Rental rates are up, and over the last year the housing market, especially for “move-in ready” homes, has definitely begun to turn.  Two common mistakes made right now – sticking to very low-ball offers and taking too long to “think about it” when it comes to making an offer now leads to losing out. 

Tidbits 

Rates Remain Low.  The average 30 year mortgage rate is now 3.71%, which is actually up from 3.56% seven weeks ago. These are rates not since the 1950s. However, some still have trouble qualifying as the requirements put in place post melt-down continue.   

Rents Charged Continue to Rise.   Housing rents continue to rise in a reflection of the increased demand for rental housing. The first quarter of 2012 recorded a 2.2% increase across the country. 

Survey Says…. Kitchen and baths still top the list of remodel jobs in 2011 according to a survey by the National Builders Association.  These were followed by window replacements, whole house remodel and room additions. 

Cudos for Florida Building Codes.  Florida and Virginia ranked highest among the 18 states in the most hurricane-prone areas according to a new study.   

Winter Park Home Featured.  A Winter Park home was recently featured on A&E’s “Fix This Yard”.  The house was a fixer-upper purchased by an investor group and was selected from 12 finalists.  The house was bought for $170,000 and is under contract now after being listed at $299,000 after all of the renovations.  The landscaping cost $5,000 but was estimated to be worth $15,000-$20,000 retail. 

Celebrity Sellers Like the Rest of Us.  Apparently even celebrity isn’t enough to command a full asking price if the house location, design and renovations don’t actually warrant it.  Just ask the likes of Meg Ryan, Ozzy Osbourne and Kurt Russell – all of whom have reduced their respective asking prices.