Orlando Florida Regional Housing Market Update June 2018

THE ORLANDO FLORIDA

REGIONAL HOUSING

MARKET UPDATE  

June 2018

The latest housing market data are in for Central Florida, including Lake Mary Florida, Heathrow Florida, Longwood Florida, Sanford Florida, Winter Springs Florida, Oviedo Florida, Debary Florida, New Smyrna Beach Florida, Apopka Florida, Orlando Florida, Geneva Florida, Belle Isle Florida, Maitland Florida, Sorrento Florida, Winter Park Florida and Altamonte Springs Florida. Here are the highlights taken from the Orlando Realtor Regional Board report ending May 2018 (the latest now available):

The Short Story

Inventory numbers continue to struggle. Even with the new housing starts, the inventory numbers on the local listing service dropped by more than 250 units.  Prices continue to move up for the 81^st consecutive month. The Feds continued with planned rate hikes and the interest rates have moved up again.

Inventory

Inventory dropped by more than 250 units this month from 7,740 to 7,486, a 3.3% decrease.   This is a 14.4% decline over this time last year when there were 8,781 homes on the market.  Just two years ago there were 10,553 on the market.       

These inventory numbers include all homes: single family homes, condos, duplexes and townhomes. For comparison:  In August   2008, there were 24,834 on the market. In March 2013, which was where inventory bottomed out, there were 6,937. 

Single family home inventory is down 10.5% from a year ago, and the condo inventory is down by 25.4%.   

Short sales and foreclosures have had no impact on the overall Central Florida housing market for some time now. Therefore, statistics associated with them are no longer included in this report.  

Homes spent an average of 55 days on the market, four days fewer than last month, and ten days fewer than two months ago.  A year ago it was 54 days and two years ago it was 67 days. At the current pace of sales, there is a only a 2.2 month supply! 

Estimated 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. Regardless of what you tend to hear – there is no true Seller’s market - Buyers ultimately set the market price no matter what the inventory numbers are at any particular moment. That is, Buyers decide if they are willing to, or can, pay more, and by how much, as inventory numbers continue tighten.

IF YOU ARE LOOKING TO BUY OR SELL

YOUR HOME OR PROPERTY –

PLEASE CONTACT US AND FIND OUT HOW WE CAN HELP!

Sales

There were 3,407 closings (actual sales) in May, down 11.4% from a year ago but up 1.1% from last month.         

Single family home sales decreased 12.4% and condo sales were down 3.1% compared to a year ago.   

Of the sales in April, 96.5% were normal, arms-length transactions – indicative of a normal housing market as it relates to the quality of buyers.  

Sales of existing homes in the entire Orlando MSA were down 13.7% from a year ago.  Year to date, sales are down 2.2%. This could be from a combination of hard-to-find existing inventory, a shadow inventory of new homes being sold which don’t show up on the MLS, and loan rate increases.  

The average home sold for 97.1%, of its then-current listing price. However, “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 a lot less than the percentage cited from its original debut listing price.

IF YOU ARE LOOKING TO BUY OR SELL

YOUR HOME OR PROPERTY –

PLEASE CONTACT US AND FIND OUT HOW WE CAN HELP!

Prices

The median (usually close to the average) price of all homes sales rose 7.3% from a year ago to $234,000, but a 1.7% decrease over last month.  Eighty-one of the past 82 months have seen year-over-year price increases in the Orlando MSA.  

The overall median price has now more than doubled since July of 2011.

The year over year median price for a single family home increased 8.5%. Condos posted an increase of 6.1%.  

Single family homes have now posted 82 consecutive months of year over year price increases.

The median price for an existing home in May is $235,000, an increase of 5.9% from a year ago.

The difference between the median and average most times is very small – especially as the sample size increases. The technical difference is that the median is the sales price number in the exact middle of the number of sales – that is exactly where half of the sale prices are lower and half are higher. The average price is the total sales prices divided by the total number of sales. The median is less influenced by fringe numbers – ones very large or very small as compared to the usual numbers.  For example, a million dollar sale in a $200,000 neighborhood or a $50,000 sale in the same neighborhood.  Just for completeness – the mode is the sales price number that is repeated most often.

Price points and sales pace are heavily influenced by location and price-point market segment.   That is, generally homes in the $250,000 - $350,000 range will sell faster and can sell for more per square foot than a home at the $2 million price point because there are far more buyers capable of affording the lower priced home.  Thus, there is more competition amongst that group vying for that particular home.

If one were to add in the location consideration as well, homes in the most desirable locations can sell for many times more than the same home would sell for in an inferior location.  Of course this multiple times the value factor is diminished the higher the price point.

This can be illustrated in the locations and price points most production builders opt for in Central Florida.  Here, we don’t generally see subdivision production builds of homes in the $1M and up range  - but in the $300s-500s is fairly common. 

Orlando Unemployment

The latest numbers for the Orlando Florida MSA – for April was 3.0%, down from 3.5% the month earlier.  The “official” national average was 3.8 in April, down from 3.9% last month. 

Average Orlando MSA Interest Rates*

The average interest rate paid in the Orlando MSA last month was 4.64% up from last month’s 4.51%, which was up from 4.29% the previous month and significantly up from the 3.96% in November of last year. A year ago it was 4.09% and two years ago it was 3.62%. Home loan rates tend to generally trend along with the ten-year US Treasury bond markets.  

Market Summary

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*The interest rate statistic is over all types of loans with varying terms, conditions, circumstances and credit scores, and should be used as trend reference number only.  Consult your lending representative for rates that would apply to you.

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.