The Orlando Florida Housing Marketing Update September 2020

THE ORLANDO FLORIDA

REGIONAL HOUSING

MARKET UPDATE

September 2020

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, Wedgefield Florida, Avalon Park Florida, and Altamonte Springs Florida. Here are the highlights taken from the Orlando Realtor Regional Board report ending August 2020 (the latest now available):

Inventory

The trend of reduced inventory began in April of this year and continues through this past month – there are now even fewer homes available on the market (now only 5,958) than there were in 2011 when the market crash inventory originally bottomed out (6,937). This month’s numbers are 22.1% lower than this time last year, and down another 4.2% from last month alone.  

Single family home inventory is now down 34.3% from last year and down another 4.21% from last month. Condo inventory and townhome inventory again bucked the trend last month – there are 20.3% more condos and 28.3% more townhomes than were available last year, respectively.  

Driven by low existing home inventory and ultra-low interest rates, new home inventory has continued to make up for the lack of existing inventory with developers and builders selling homes in new communities at an unprecedented rate.  Most of these are not listed in the MLS.

Homes spent an average of 51 days on the market, three days less than last month and one day more than two months ago. Last year it was 49 days and two years ago it was also 49 days.   At the current pace of sales,  there is is now an overall average supply of less than two months.  At price points below $400,000 – there is less than one month’s 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, there are other factors which weigh into supply times.  Primarily location and price point are the two other significant influencers.  Great locations will move faster than the average market and lower price points tend to move faster as well.  

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, in response to demand, inventory, location and price point.

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YOUR HOME OR PROPERTY –

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Sales 

There were 3,569 sales (actual closed sales from MLS listings) in August, which was 4.2% more than a year ago, and a 3.8% decrease from July.    

It still does not appear that distressed sales have increased as of yet.  However, the foreclosure process has been stayed by executive order and will likely remain this way until the end of the calendar year.  Thus, it is likely that the true fall out will not be known for some time.   

Pending sales – a forward indicator – which had been dropping at the start of the shutdown and then trended up for 90 days, has begun to drop again – and is down 1.7% from the previous month.   

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 was $275,000, up 10.0% from a year ago, and up 1.9% from July, 2020.   

The year over year median price for a single family home was up 9.3% from the previous year at this time to $295,000. Condos posted an increase of 11.3% over last year at this time coming in at $152,000 and townhouses increased 4.2% to $225,900. 

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 July was 16.2% down from June’s 17.2%.  Last year it was 3.2% at this time. The national average dropped again in August to 7.4% from July’s 10.2%.  It should be noted that these figures are skewed by those that choose to remain unemployed as the generous COVID19 relief legislation in many cases has made it more lucrative to stay home rather than work.

Average Orlando MSA Interest Rates* 

The average interest rate paid in the Orlando MSA is now firmly broken through the 3% floor. The average over the past month has been 2.85%, down from 2.97% last month.  Home loan rates tend to generally trend along with the ten-year US Treasury bond markets. However the rates for specialty loans are influenced directly by the secondary investor market – those who purchase loan packages after closing.  

Market Summaries

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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 are 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.