The Orlando Florida Regional Housing Update Report August 2020

THE ORLANDO FLORIDA

REGIONAL HOUSING

MARKET UPDATE

August 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 July 2020 (the latest now available):

Inventory

The trend of reduced inventory began in April of this year and continues on as the inventory has dropped yet again this month.  There are now even fewer homes available on the market (6,220) than there were in 2011 when the market crash inventory bottomed out (6,937). This month’s numbers are 22.2% lower than this time last year and down 5.1% from last month alone.  

Single family home inventory is now down 32.7% from last year and down 5.02% from last month. Condo inventory and townhome inventory bucked the trend last month – there are 11.4% more condos and 22.8% more townhomes than were available last year, respectively.

Homes spent an average of 54 days on the market, two days more than last month and 6 days more than two months ago. Last year it was 49 days and two years ago it was 45 days.   At the current pace of sales, there is is now an overall average of just 2 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 3,679 3,103 sales (actual closed sales from MLS listings) in July, which was 1.4% more than a year ago, and a stout 18.6% increase from June.    

It does not appear that distressed sales have increased as of yet.  However, the foreclosure process has been stayed by executive order.  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, has jumped three months in a row.  This month it is up by 8.7%.  

 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 $270,000, up 9.2% from a year ago, and up 1.9% from May, 2020.   

The year over year median price for a single family home was up 10.1% from the previous year at this time to $295,000. Condos posted an increase of 5.1% over last year at this time coming in at $145,000 and townhouses increased 4.6% to $224,900. 

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 June was 17.2% down from May’s 23.2%.  Last year it was 3.1% at this time. The national average dropped again in July to 10.2% from June’s to 11.1%.  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 broken through the 3% floor. The average over the past month has been 2.97%, down from 3.04% 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.