The Orlando Florida Regional Housing Market Update March 2020

THE ORLANDO FLORIDA

REGIONAL HOUSING

MARKET UPDATE

March 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 February 2020 (the latest now available):

 Inventory

There a very significant change in inventory from last month. Inventory decreased a whopping 16.7% when compared to last year at this time and a 2.9% decrease from last month.  There are now only 6,825 housing units on the market – below the low point in March 2013.   This may break the see-saw up and down inventory that has been the trend for some time.  With the market volatility over the COVID 19 outbreak, it is impossible to tell what the long term effects will be on the real estate markets once this event passes and no longer a direct factor. However, supply chain interruption may cause inventory numbers to go down further before they come up as supply chains are re-established or new ones formed.

These inventory numbers include all homes: single family homes, condos, duplexes and townhomes. For comparison:  In August   2008, there were 24,834 on the market. In March 2013, which was where inventory bottomed out during the 2008 meltdown, there were 6,937. 

Single family home inventory represents the vast bulk of the inventory and dropped almost 20% from last year. Condo    inventory also decreased from last year by 11.1%.  However, bucking the trend, townhome inventory did increase by almost 8% over last year.  

Homes spent an average of 58 days on the market, two days less than last month but five days than two months ago. Last year it was also 62 days and two years ago it was 64 days.   At the current pace of sales, there is is now an overall average of a 2.7 month supply. Last year at this time, the supply was 3.4 months.    

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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Sales 

There were 2,521 (actual sales from MLS listings) in February – an    increase of 11.1% over last month, and 4.4% over a year ago at this time. 

Single family home sales increased 4.5% from a year ago. Condos had an increase of 16.9% but town homes were off 9.6% as compared to February 2019.

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 $250,000, up 6.4% from a year ago, and up 2.0% from January, 2020.

The year over year median price for a single family home was up 8.0% from the previous year at this time to $270,000. Condos posted an increase of 6.2% over last year at this time coming in at $145,000.   

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 December was 2.4%, unchanged from the previous month. The national average for February 2020 (the latest) was 3.5%. 

Average Orlando MSA Interest Rates* 

The average interest rate paid in the Orlando MSA has remained below 4%.  While it dropped to 3.43% from 3.55% the recent actions of the Fed may drive the rates even lower. Home loan rates tend to generally trend along with the ten-year US Treasury bond markets.  

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.