The Orlando Florida Regional Housing Market Update March 2018

THE ORLANDO FLORIDA

REGIONAL HOUSING

MARKET UPDATE  

March 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, and Altamonte Springs Florida. Here are the highlights taken from the Orlando Realtor Regional Board report ending February 2018 (the latest now available):

The Short Story

Inventory continues to remain very tight with the numbers continuing to hover not too far above the 2013 low point.  Interest rates have increased significantly across the board, although still historically low.  Prices are still on the increase (78 out of the past 79 months).  There has been an uptick of homes in foreclosure – but this appears to be largely due to hurricane-related forbearances ending.  New housing starts from a variety of builders continue to pop up around the area.    

Inventory

Inventory increased slightly again this month.  There are 7,706 homes on the market, up from 7,604 homes, which was up from 7,508 the previous month.  However, last February there were 8,457 on the market.  Two years ago there were 10,696.  year. This is an 8.9% decline over this time last year, but up again 1.3% from last month.      

These inventory numbers include all homes: single family homes, condos, duplexes and townhomes. For further comparison:  In December of 2008, there were 22,524 on the market. In March 2013, which was where inventory bottomed out, there were only 6,937. 

Single family home inventory is down 4.3% from a year ago, and the condo inventory is down by 25.1%.   

Normal (aka arms-length) sale inventory is down 6.6% from last year and bank-owned inventory is now down by 49.1% from a year ago.  This is the thirty-fourth month in a row the bank-owned inventory number has dropped.  Short sale inventory declined again and is now down by 36.1% from a year ago.  

The significance of these last two percentages is that each year a smaller and smaller number is being used for comparison for the short sale and bank-owned inventories which means the overall comparative reduction is even greater than the numbers suggest. 

Short sales and foreclosures are no longer having any influence on the overall Central Florida housing market. Recent articles have pointed out that in most places in the country, the inventory of foreclosures and short sales have reached pre-2008 meltdown levels.

Homes spent an average of 64 days on the market, 2 days more than last month – 5 days fewer than a year ago and 18 days less than two years ago. At the current pace of sales, there is a 3.09 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 pay mor, and by how much, as inventory numbers 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 2,495 closings (actual sales) in February, up .6% from a year ago and up 11.0% from last month.         

Single family home sales decreased 1.0% and condo sales were down 7.3% compared to a year ago.   

Of the sales in January, 94.4% were normal, arms-length transactions.

The number of normal sales increased by 5.0% as compared to a year ago.  At the same time, bank-owned sales were down 46.7% and short sales were down 22.6% from a year ago.

Sales of existing homes in the entire Orlando MSA were down 0.1% from a year ago.

The average home sold for 97.33%, 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 10.04% from a year ago to $228,000, and a 1.3% increase over last month.  Seventy-eight of the past 79 months have seen year-over-year price increases in the Orlando MSA.       

The year over year median price for a single family home increased 11.1% as compared to last year. Condos posted an increase of 22.2% over last year.

Single family homes have now posted 79 consecutive months of year over year price increases.

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 $200,000 - $300,000 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 December was 3.1%.

The “official” national average was unchanged at 4.1% for February – where it has been since October 2017.  

Average Orlando MSA Interest Rates*

The average interest rate paid in the Orlando MSA for home loans last month was 4.39% up from 4.07% last month and significantly up from the 3.97% the month previous to that. A year ago it was 4.29% and two years ago it was also 3.75%. Home loan rates tend to generally trend along with the ten-year US Treasury bond markets.  

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 Market Summary

*The interest rate statistic is over all types of loans with varying terms and conditions 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.