The Orlando Florida Regional Housing Market Update November 2017

THE ORLANDO FLORIDA

REGIONAL HOUSING

MARKET UPDATE  

November 2017

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, Belle Isle Florida, Maitland Florida, Sorrento Florida, and Altamonte Springs Florida. Here are the highlights taken from the Orlando Realtor Regional Board report ending October 2017 (the latest now available):

Worth Noting

From the data, it appears Hurricane Irma had only a short term effect on the overall housing market in Central Florida.  Sales numbers are back on track and commensurate with those months preceding Irma.   

The Orlando Regional Market market still tends to favor Sellers with properties at the under $300,000 price point.  This segment has the lowest inventory and the highest number of qualified buyers.  

Short sales and foreclosures are now at levels consistent with the Pre-Meltdown Era and thus are no longer an influence.

Inventory 

Inventory continues to decline. There are now 8,464 homes on the market, down from 8,643 last month and 8,833 the month previous to that.  This is 2.21% lower than last month and down 9.9% from October 2016 when adjusted for the removal of the Active With Contract designation.    

These inventory numbers include all homes: single family homes, condos, duplexes and townhomes.  A year ago the unadjusted inventory was 10,025 and two years ago it was 11,441. 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 12.5% from a year ago, and the condo inventory is down by 28.2%.   

Normal (aka arms-length) sale inventory is down 12.2% from last year and bank-owned inventory is now down by 42.7% from a year ago.  This is the thirty-first month in a row the bank-owned inventory number has dropped.  Short sale inventory declined again and is now down by 68.2% 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 56 days on the market in October – one day less than last month, and 5 days fewer than a year ago and 15 days less than two years ago. At the current pace of sales, there is a 2.9 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 more 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 2,898 closings (actual sales) in October – almost four hundred more than occurred in September.  This is up 7.3% from a year ago and 13.6% higher than the previous month.      

Single family home sales increased 3.1% and condo sales were up 23.7% compared to a year ago.   

Of the sales in October, 94.6% (2,742) were normal, arms-length transactions. Short sales made up only 1.4% (39) of the total and Bank Owned properties rounded out with 4.0% (117).

The number of normal sales increased by 15.0% as compared to a year ago.  At the same time, bank-owned sales were down 51.7% and short sales were down 47.3% from a year ago.

Sales of existing homes in the entire Orlando MSA are were up 5.4% from a year ago, and despite Irma, are still up 2.7% for the year.

The average home sold for 97.2%, of its then-current listing price. This is just slightly higher than a year ago. 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 6.3% from a year ago to $218,000, but a 3.1% decrease from last month.  Seventy-four of the past 75 months have seen year-over-year price increases in the Orlando MSA.       

The year over year median price for a single family home increased 7.4% as compared to last year. Condos posted an increase of 10.9% over last year.

Single family homes have now posted 75 consecutive months of year over year price increases. Bank-owned prices increased 3.4% and short sale prices increased by 4.0%. 

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-400s-500s is fairly common. 

Orlando Unemployment

The latest numbers for the Orlando Florida MSA – for September was 3.1%, down from the 3.7% previous month. A year ago it was 4.5%. The “official” national average was at 4.1% for October.  

Average Orlando MSA Interest Rates*

The average interest rate paid in the Orlando MSA last month was 4.03% - jumping past the previous three months’ averages of 3.84% last month, and 3.92% and 4.01%, respectively previous to that. A year ago it was 3.57% and two years ago it was also 3.86%. Home loan rates tend to generally trend along with the ten-year US Treasury bond markets.  

Market Summary and The Short Story

Overall inventory continues to decline, prices continue to rise and the pace of sales remains steady, with a general uptick in loan rates.  

WE DO APPRECIATE YOUR REFERRALS!

*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.