Orlando Florida Regional Housing Report January 2014

THE ORLANDO FLORIDA REGIONAL HOUSING MARKET UPDATE

January 2014

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

December 31, 2013 (the latest now available):

Inventory 

December snapped the eight month upward trend as inventory numbers declined. We now have 9,421 homes on the market – down from 9,609 last month.   This still represents a 27.59% increase in inventory from a year ago, but is down 1.96% from last month.  But it is still more inventory than has been on the market in more than a year, but we are still in an undersupply market. Inventory numbers bottomed out at 6,937 in March 2013.

The inventory number includes single family homes, condos, duplexes and townhomes.  For comparison: In December of 2008, there were 22,524 on the market.  Thus, despite the upturn in inventory, we still only have 3.97 months of supply – down from 4.65 last month. Six months of supply is considered a balanced market between Sellers and Buyers.   

This inventory is what is reflected on the Multiple Listing Service (MLS). It is possible that new home construction companies are electing more and more not to put their inventory homes on the MLS and instead try to rely on their overall community marketing to draw in buyers.

Single family home inventory is up 29.52% from a year ago and  condo inventory is up 18.77%. 

Much of the rise in inventory numbers is still coming from the new housing starts found around the area along with Sellers who have been stuck with their homes for the past 6+ years due to the housing crash. 

The current pace of sales equates to 3.97 months of supply, down from 4.65 months of supply last month and 4.1 months of supply the previous month.  This is an undersupply market. 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. Buyers ultimately set the market price.

Sales 

Overall sales were down 5.55% from a year ago but up 11.55% from last month.  

Of the sales in November, 1,600 or 67.34% were “normal”, 322 were short sales (13.55%) and 454 (19.11%) were bank-owned. The number of normal sales increased by a whopping 29.03% compared to a year ago and the number of short sales fell by an astounding 57.74% while bank-owned sales decreased by 9.74% over the same period. This continues the now-standing long-term trend of normal sales taking more and more of the sales total than those sales under distressed conditions.  However, for comparison, previous to the housing boom-bust of 2006-2007-2008, the latter two numbers were almost always in the single digits.   

Also of note is a trend developing wherein banks are starting to choose foreclosures over short sales as prices have risen substantially in the past few years.  In many markets it is making more sense for them to foreclose with the idea of getting more than they would get in a short sale.  Whether this actually holds true remains to be seen. 

Single Family Home sales decreased by 4.21% over a year ago, but were up 13.89% from the previous month. Condo sales were down 13.45% and villa/townhome sales were flat.  

Homes spent an average of 69 days on the market in November –  three days more than last month but almost two weeks less than a year ago. The average home sold for 96.49% 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 down 7.24% from last December, Orange County was down 7.40%. Osceola came in down 10.41%, but Lake County increased by 9.75%. 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 a home has risen 20.87% from a year ago to $160,480. The Orlando Florida metro area market has now posted positive year-over-year gains in price for 30 consecutive months.  

However, remember - the median price above encompasses all sales. Individual categories can fluctuate within the median. However, this month, as was the case last month, prices year over year rose in all categories. Normal (no distress) sales rose 11.52% to $184,000 from this time last year, short sales rose 11.1% to $120,000 and Bank-Owned averages increased 3.01% to $102,532 compared to a year ago.

Affordability 

The Orlando MSA affordability index decreased to 176.72 and the first time homebuyer’s index was also virtually unchanged at 125.67.   

Each index 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 average buyers earning average incomes (adjusted for the MSA) 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 

The latest numbers for the Orlando Florida MSA – for November was 5.9% down from 6.1% the previous month.  A year ago it was 7.8%. The national average is currently 6.7%  

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.