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Existing-home sales in Orlando area may have bottomed out
Despite a 40.2% drop from February '07, the Orlando Realtors president says
'there is light at the end of the tunnel.'
Christopher Boyd | Sentinel Staff Writer
March 12, 2008
Orlando Metro
Appreciation Levels -- a 6 year History
Home appreciation comparison from 2001 to 2007
Updated March 11, 2008
Orlando’s affordability index leaps to 100 percent as median sales price and
inventory decline
Orlando Board of Realtors (October 2007 Sales
Report)
January 10, 2008 – Orlando, FL
Existing-home sales in Orlando area may have bottomed out
Despite a 40.2% drop from February '07, the Orlando Realtors president says
'there is light at the end of the tunnel.'
Christopher Boyd | Sentinel Staff Writer
March 12, 2008
Orlando's
existing-home sales continued to sag in February, though some real-estate
experts said Tuesday they glimpsed what might be signs that the steep
year-over-year declines in sales and prices are finally easing.
The Orlando Regional Realtor Association reported that its members sold 922
houses and condominiums in February, 40.2 percent fewer than changed hands in
February 2007. Combined with the revised total of 813 homes sold in January, it
was the worst start to a sales year since January-February 1997, when 1,642
homes changed hands in the Realtors' core Orlando market.
The median price of the single-family homes and condos sold last month was
$233,000, up slightly from January's median
but 12.6
percent lower than the $255,000 median recorded in February 2007.
Steven Moriera, president of the Orlando Realtors group, said he thinks the
year-over-year declines are beginning to moderate -- the 40.2 percent drop in
February was the smallest in six months -- though he wouldn't speculate on when
a recovery might begin. "The market isn't moving down very much now,
nor is it moving up," he said. "We believe that there is light at the end of the
tunnel, but we don't know how long the tunnel might be."
Moriera said sellers have finally begun to lower their asking prices to reflect
the market's retreat from all-time highs reached several years ago during the
nationwide home buying frenzy. "They are becoming more realistic," he
said. "There is an understanding that someone who is pricing a house at what it
was worth last year has very little chance of selling."
The number of houses for sale in the Realtors' database rose by 260 in
February to 25,984 -- an inventory that would take more than 28 months to sell
at the current sales pace.
Although the backlog remains near record highs and sales prices are down by
double-digit percentages, Orlando economist Hank Fishkind said the market
is beginning to stabilize. "There is very little movement on
average price," Fishkind said. "The median price has gone down, but the average
dollar volume of sales hasn't changed much for four months in a row.
"This, however, doesn't mean we will see recovery any time soon."
Many variables remain in play. Fallout from the meltdown of the nation's
subprime-mortgage market continues, as more and more houses slip into
foreclosure. And the overall economy is showing decided weakness: Florida,
for example, has been losing jobs since September, though the Orlando area
remains the strongest employment market in the state.
Fishkind said the pace of population growth in the state has also slowed, but he
noted that Orlando's decline has been less severe than those of other metro
areas. He said that bodes well for when a housing recovery does take hold.
"Orlando will have a household growth of 20,000 to 25,000 a year," Fishkind
said, even with the current economic slowdown. "That should eat up the housing
inventory pretty quickly."
Property experts also said that, while the market's overall performance is still
subpar, the worst problems are confined only to certain areas.
"There are houses in
Windermere
where people paid $1 million for a house and they got a $700,000 loan, and now
their houses aren't worth the value of the loan," said Austin Jones, an
appraiser and a partner with Carpenter & Jones in Orlando.
Jones said that, while many of the region's costliest houses have lost a
significant chunk of their value, the declines haven't been as steep at the
lower end of the market.
"The lower-priced single-family-home market is stabilizing," Jones said.
"Those are houses in the $150,000 to $300,000 range."
Real-estate agents continue to insist that the lower prices represent an
opportunity for would-be buyers.
"Serious buyers out there know the market is going to rebound," said Katie
Lambert, sales manager with the Century 21 Professional Group in southwest
Orange County. "There will be buyers who sit on the fence and others that take
advantage of this market. For buyers who have the money, the property is there."
Christopher Boyd can be reached at cboyd@orlandosentinel.com or 407-420-5723.
Copyright © 2008, Orlando Sentinel
Orlando Metro
Appreciation Levels -- a 6 year History
Updated March 12, 2008
Property values have been on the rise since the late 1990s, but the real activity has only taken place since 2003. The following are changes in the Orlando MSA "median price"; half of homes selling above, and half of homes of selling above. The Orlando MSA includes Orange, Seminole, Osceola and Lake counties:
Month/Year Median Price % Increase or Decrease Available Inventory
Nov 2001 125,846 -- --
Nov 2002 138,663 11% increase from Nov 2001 7,880 homes
Nov 2003 153,567 11% increase from Nov 2002 6,712 homes
Nov 2004 182,300 19% increase from Nov 2003 3,681 homes
Nov 2005 249,900 37% increase from Nov 2004 9,685 homes (highest level since late 1990s)
Nov 2006 250,000 00% decrease from Nov 2005 21,324 homes (new record -- 1yr supply of homes)
Nov 2007 234,900 06% decrease from Nov 2006 26,172 homes (new record -- 2yr supply of homes)
Feb 2008 233,000 01% decrease from Nov 2006 25,984 homes (still a 2yr supply of homes)
Local property values are driven, like they are in most markets, by the simple law of "supply and demand". Inventory shrunk to it's lowest levels between 2003 and early 2005, then rose dramatically from the second half of 2005 through the end of 2007.
As of March 2008 it is a STRONG BUYER'S MARKET, with about a 2-year supply of homes on the market. The "median sales price" is down from peak levels by almost 10%. Sales in many areas however, are significantly below this level, at about 15-20% under peak values of 2005/2006.
Article written by Frank Plesko, Watson Realty
Compiled from Orlando Regional Realtor Association's Monthly Sales & Inventory
Reports
Orlando’s affordability index leaps to 100 percent as median sales price and
inventory decline
Orlando Board of Realtors (October 2007 Sales
Report)
January 10, 2008 – Orlando, FL
A decrease in the median sales price has spurred the area’s housing affordability index to reach 100 percent, which along with a reduction in inventory by nearly 2,000 homes indicates a swing toward stabilization of Orlando’s current buyer-favoring housing market.
The median sales price of a single-family home in the Orlando area in December 2007 dropped in one month by $11,000 to $223,900, reports the Orlando Regional Realtor® Association. The median sales price for December 2007 is 10.44 percent below that of December 2006 ($250,000), and the year-end median home sales price ($245,000) is 1.21 percent below 2006 ($248,000).
The decrease in the median home price to $223,900 means that the area’s affordability index has improved tremendously – in December 2007 the index jumped to 100.3 percent. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home.) Buyers who earn the reported median income of $51,335 can qualify to purchase one of 6,936 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $230,617 or less.
The first time homebuyer affordability index climbed in December as well, to 71.4.
The number of sales in the Orlando area declined by 48.33 percent in December 2007 compared to December of last year (1,005 to 1,945), and the number of sales that took place in December 2007 also decreased over the number of sales that occurred in November 2007 (1,029, which is revised from 963 as reported last month). Total year-end sales for 2007 (16, 673) were down by 39.50 percent over 2006 (27,559).
The area’s average interest rate was 5.93 percent in December 2007 — which represents a continuing downward trend since a high of 6.60 percent in August.
Homes of all types spent an average of 116 days on the market before being sold in December 2007; and the average home sold for 92.52 percent of its original asking price. In November, those numbers were 114 and 93.77 percent, respectively.
The majority of single-family homes (183) that changed hands in December 2007 were sold for between $200,000 and $250,000, a trend that was evident throughout 2007 (3,006 of the 13,181 single family homes that were sold in 2007 fell into this price category). Another 105 homes were sold in December 2007 for between $250,000 and $300,000. Two hundred fifty-five homes sold for less than $200,000 in December, and 262 sold for more than $300,000. On the far ends of the scale, 22 homes were sold for $1 million or more while only three homes sold for less than $50,000. By year’s end, 354 homes in the Orlando area sold for more than $1 million.
Inventory
There are currently 24,298 homes available for purchase through the MLS. Inventory decreased by 1,874 homes in December 2007, which means that 1,874 fewer homes entered the market than left the market. November 2007 saw a decrease (of 158) homes, while October 2007 saw an increase of 20. Compared to last year, the December 2007 inventory level (24,298) is 24.4 percent higher than it was in December 2006 (19,537).
The inventory level reflects a 24.18-month supply at the current pace of sales.
There are 18,328 single-family homes currently listed in the MLS. Most (6,673) are listed in the $200,000 - $300,000 price range. Condos currently make up 3,887 offerings in the MLS, while duplexes/town homes/villas make up the remaining 2,083. Most condos (559) are priced at $200,000 to $250,000; most duplexes/town homes/villas (521) also fall into the $200,000 - $250,000 range.
Condos and Townhomes/Duplexes/Villas
The sales of condos in the Orlando area declined by 77.0 percent in December: A total of 84 condos changed hands in December 2007 compared to 361 in December 2006. In a month-to-month comparison, December 2007 condo sales (84) decreased by 27.6 percent from November 2007 (116). Year-end condo sales are down by 58.0 percent (2,101 condos were sold in all of 2007 compared to 5,003 in 2006).
Thirteen condos (13) that changed hands in December 2007 were sold for between $120,000 and $140,000; followed by another 13 condos that were sold for between $160,000 and $180,000. At year’s end, the majority of condos (342) had sold in the $140,000 to $160,000 range.
Orlando homebuyers purchased 116 duplexes, town homes, and villas in December 2007, which is a 30.9 percent decline over December 2006 when 168 of these alternative housing types were purchased. Duplex, town home, and villa sales in December 2007 were up by 30.3 percent compared to the number of sales that took place in November 2007 (89). Overall, duplex, town home, and villa sales were down in 2007 (1,391) by 39.0 percent (2,264 sales in 2006).
The majority (32) of duplexes, town homes, and villas sold in December 2007 fell into the $200,000 to 250,000 category. That pattern was consistent throughout the entire year, which saw the majority (403) of duplexes, town homes, and villas sold within the $200,000 t0 $250,000 range.
MSA Numbers
Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in December were down by 42.1 percent when compared to December of last year. Throughout the entire MSA, 1,213 homes were sold in December 2007 compared with 2,096 in December 2006. By year’s end, 19,976 homes were sold in the Orlando MSA while 33,106 homes were sold by year’s end last year (a 39.7 percent decline).
Seminole County’s December 2007 sales dropped 40.0 percent below that of December 2006 (281 to 468), while Orange County fell 49.4 percent (541 to 1,069). Lake County saw a 27.5 percent decline in the number of sales in December 2007 compared to December 2006 (221 to 305), and Osceola County experienced a 33.1 percent drop (170 to 254).
Each county’s year-end
sales comparisons are as follows:
Lake: 31.3 percent below 2006 (3,139 homes sold in 2007 compared to 4,571 in
2006);
Orange: 41.6 percent below 2006 (9,847 homes sold in 2007 compared to 16,848 in
2006);
Osceola: 45.6 percent below 2006 (2,702 homes sold in 2007 compared to 4,966 in
2006); and
Seminole: 36.2 percent below 2006 (4,288 homes sold in 2007 compared to 6,721 in
2006).