Orlando Florida Regional Housing Market Update March 2011

ORLANDO FLORIDA

REGIONAL HOUSING MARKET UPDATE

March 2011

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

Inventory 

The downward inventory trend continues. Currently there are now 12,533 housing units on the market through the Orlando Regional Multiple Listing Service – another drop of nearly 1,000 units from February’s inventory and 23% fewer than 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 March there were 16,233 and in December of 2008, there were 22,524 units on the market.   

More specifically, there are 10,115 single family homes on the market – 774 fewer than February and almost 23% fewer than a year ago. Condos account for 1,506 – 38 fewer than last month and 46% fewer than what was available a year ago. Townhomes & duplexes round out the numbers with 912, 135 fewer than last month. The current pace of sales equates to 5.04 months worth of supply – the lowest since December of 2005. 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 

March sales were down 3% percent over March 2010 with 125 fewer closings than last March.    

Pending home sales were up in March by a little more than 3%   from February, but down 6.5% compared to last year.   

Condo sales decreased by almost 23% when compared to last year at this time. Duplex, townhome and villa sales were up less than 1% 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 almost half of all condo sales (49.47%). 

Homes spent an average of 103 days on the market in March, four days longer than February and 12 days more than this time last year. The average home sold for 95.40% 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, Seminole County continues to lead with a 2% increase in sales over this time last year, but Orange County was down 8%. Osceola came in at 15% above last March, but Lake County was down again for the second month in a row by almost another 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 

As would eventually be expected with a continuing drop in inventory - The median price of an existing home rose to $103,000 from last month’s $96,000, but still down 6.3% from a year ago.  

Remember - the median price above encompasses all sales. The median price for Bank Owned properties’ was $80,000, $6000 more than last month. Short Sales’ median came in at $102,500, up from last month.  Normal sales continue to lead the median price breakout with $152,500, slightly down from 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 255 from 277 and the first time homebuyer’s index also decreased to 181 from 195.  

This has been see-sawing backing and forth for some time now and 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 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 February, 2011 we now stand at 10.8%, down from 11.6% last February and down from 11.7% last month.   The latest numbers for March for all of Florida stands at 11.1%.

Other Discussion, Opinion and Points

A Conundrum - Low Inventory and High Unemployment

The Orlando trends this month began to splinter.  The prices went up slightly, but sales slowed slightly when compared to last year, but were still significant enough to drive inventories down again.   The inventories here in the Orlando area are now at levels not seen since December 2005 when the great housing slide began – even with all of the foreclosure activity.   Condo sales have started to cool – perhaps an indication that the best deals there are gone. 

This month did bring two surprises – overall price appreciation and a reduction in the unemployment numbers.  The former may be due in part to the fact that a sub-trend may be forming with “normal sales”.  The number of “normal” sales has slowly been increasing – this month there were 28% more normal sales than last month.  Normal sales bring higher prices – the homes tend to be better kept and in more solid locations.    

It is appropriate to note that the inventories are dropping despite having NO outside government prop-up programs in place (the housing tax credits).  This means actual market forces are at work which would indicate that these statistics and trends are forming on their own without direct outside intervention and thus can be believed to represent a truer picture.  

The Unemployment Question Finally Getting Some Answers 

Unemployment finally showed a drop in February (latest numbers) for Orlando.  The latest numbers for March for all of Florida was also good news. While we are still well above the current national average of 8.8% - but finally we may be getting some much-needed jobs back.   

Unfortunately, Florida ranks behind only Nevada’s 13.2% and California’s 12%. Just for contrast – the best state in the nation is North Dakota where the unemployment rate is 3.6%, followed by Nebraska at 4.2 and South Dakota at 4.9%, respectively.  

Tidbits 

Zillow has filed for an IPO.  They are trying to raise more than $51M in capital and they have listed “acquisitions” as a possible use for some of the funds. 

Nationally, rental rates continue to rise; recording their best performance to date in more than 10 years.  With this, CNN cites Orlando as one of their top 6 cities where it makes more sense to buy than to rent.  

Consumers now tend to pay credit cards before their mortgages a new study cites. Borrowers in trouble tended to keep their credit cards current before their mortgages – the former more necessary in an immediate financial crunch than the latter. 

2010 vacation and investment home sales stay even with 2009 sales. The total numbers were down, but nationally, vacation homes accounted for 10% of all sales and investment accounted for 17% - virtually unchanged from 2009.

The March Consumer Confidence Index declined. The Present Situation Index actually improved, but the Expectations Index dropped significantly, dragging down the overall number. 

The BP Oil Spill was a year ago.  Gov. Rick Scott has chosen not to join a major lawsuit with otherGulf States against some of the companies involved.  Instead, according to a statement, he is choosing to work with the companies rather than fight them and implementing a Florida Tourism ad campaign for thePanhandleGulfCoast using $30M givenFlorida for this purpose from BP. 

Until next month…….

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Statistical Data and Graphs

ORRA Originated Sales 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 2,170* 99* March 2011 4.91% 12,533 4,152 4,526 9,510 820 504 1,098 2,485 103 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.