Orlando Florida Regional Housing Market Update September 2011

ORLANDO FLORIDA REGIONAL HOUSING MARKET UPDATE

September 2011

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 

September 2011:

Inventory

September 2011 marks the 15^th consecutive month of inventory decline in the Orlando market. Currently there are now only 9,931 housing units on the market through the Orlando Regional Multiple Listing Service.  Last September held an inventory of 16,359 -  a 40% drop in inventory from a year ago.  In December of 2008, there were 22,524 units on the market.  At the very height of inventory in 2007, there were more than 28,000 units on the market. 

There are now only 9,251 single family homes on the market in the Orlando MSA, 170 fewer than last month.   In addition, Condo inventory is still down 51% from a year ago. The current pace of sales equates to only 4.83 months worth of supply. 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 

September sales of existing homes were down almost 14% percent from September 2010.     

Of the 2,054 sales in September, 790 were “normal”, 731 were short sales and 533 were bank-owned.  This continues the solid 8 month trend now where normal sales have outpaced short sales.  Foreclosures and short sales still accounted for 61% of all sales. 

Condo sales decreased by almost 48% in September when compared to last year at this time. The under $50,000 price range accounted for 47% of those sales and have dominated condo sales since March of 2009. Duplex, townhome and villa sales decreased by more than 5% over this time last year (220 units last month). As with last month, most townhomes sold in the $100,000 to $120,000 price range.    

Homes spent an average of 100 days on the market in September, a day less than last month. The average home sold for 94% of its then-current listing price – virtually unchanged from 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:Seminole County is virtually even with last year,Orange County was down almost 18%. Osceola came in down 25%, but Lake County has continued its reversal up again a little more than 6%.  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 was $115,000, unchanged from last month, but isan increase of 9.52% from a year ago.  

The median price is up 21.18% for 2011 year to date.   

Remember - the median price above encompasses all sales. The median price for Bank Owned properties’ was $82,000, barely an increase from last month. Short Sales’ median came in at $100,000, up 3% from last month.  Normal sales price continues to lead the median price breakout with $153,500, slightly down from last month’s $155,000.  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 increased to 250 and the first time homebuyer’s index also increased to 177.

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   December of 2010 it was 11.8%.The latest numbers for Orlando Florida – for August 2011 - we are at 10.3%, slightly improved from July’s 10.4%.  Last August we stood at 11.7%.   

Other Discussion, Opinion, Points and Tidbits. 

Most News is National - Look Local.  

In the Orlando area - inventory is down 40% from last year.  Median prices are up almost 22% year to date. Bank-Owned Foreclosure sales have declined 52% from last year, while normal and short sales increased by 18% and 25%, respectively.  

Are we poised for an upswing in inventory as banks let go the phantom inventory we’ve been hearing about for the last two years?  Latest national predictions say, “yes”.  But will they release all of the inventory at once?  Latest national predictions say “no – it is not possible”. At this point, here in the Orlando MSA quality inventory would be welcome.  Much of what is on the market here today are the still overpriced or completely trashed properties that no one seems to want to pay for or tackle. 

But as with most economic indicators and news – accurate prognostication is all but impossible despite promises of otherwise.  Everyone has an opinion and it is usually wrong when all is said and done. 

What we do know about here in the Orlando market is this: 

- The area inventory is down dramatically and the prices have come up moderately. 

- Most short sales and bank-owned homes are still selling at or below replacement cost. 

- Nice homes in good locations priced right are again enjoying quick sales many times with multiple offers. 

-  Interest rates have gone down yet again to record lows.

- Unemployment is still far above where it should be.

- The Florida economy is still stuck in neutral. 

As far as us opining about what the future holds - we'll leave that to the talking heads on TV.  But, we believe, if you are looking to buy a home and can find one in the area you want to be in at a payment you can afford and with which you feel comfortable employment-wise, then do it. You have to live somewhere and if the personal economics work now – they should work going forward.   

 Until next month……

Tidbits 

Credit Applications to Get More Personal.  Fair Isaac – the founders of the FICO credit score system are now in the midst of revamping how credit scores may be delivered.  They are now discussing releasing a separate set of information including cell phone bills and payments, child support, rental payments and payday loans in order to round out the would-be borrower’s profile.   

Bank of Family?  With some parents retiring and earning 2 or 3% on their investments and their children looking to purchase facing mortgages of 6+% or with some parents who are earning roughly what a mortgage would cost their children – an old idea has circled back around.  Loaning home purchase funds to children at a rate that works for both has been steadily on the rise in recent years. It can also help save on closing costs, red tape and delays.   

Not So Mobile Anymore.  Americans have always had the urge to move to seek better opportunities. In the 1960s, this averaged 20% of the population who were willing to move to a new area. However, that has steadily declined and in 2008 was down to just under 12%. There are a variety of reasons cited in the new study, including a more homogeneous infrastructure in the nation, an overall older population, the exporting overseas of of jobs – and not to another region in the U.S., and an overall poor economy making a move much less likely to produce results. 

Gimmicks Don’t Work.  Fox Business News found that while gimmicks like throwing in new cars or including season tickets with a deal were great to generate a buzz about a property – none sold because of the “incentive”.  In the end, the buyers negotiated just as if there were no incentives – it all came down to price, condition and location.   

Short Sales Lose Appeal with First Time Homebuyers.  Even though a short sale could save them as much as 25% on the cost of the home, more and more First Time Buyers are likely to forego the short sale.  They cite that the savings are no longer worth the process, delays and uncertainties. Short sales as a percentage of all sales peaked in 2009. 

Statistical Data and Graphs

ORRA Originated Sales 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 2,611* 102* July 2011 4.53% 10,349 627 2,912 3,244 9,869 786 399 770 2,294* 101* August 2011 4.26% 10,055 594 3,264 3,466 9,502 800 378 783 2,500* 101* Sept. 2011 4.19% 9,931 645 3,193 3,304 9,369 818 381 851 2,054 100 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 statistics cited herein are believed to be accurate but are not guaranteed.  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.