Orlando Florida Regional Housing Market Update December 2011

ORLANDO FLORIDA

REGIONAL HOUSING MARKET UPDATE

December 2011

The latest housing market data are in for Central Florida, including Lake Mary Florida, Longwood Florida, and Sanford Florida. Here are the highlights taken from the Orlando Realtor Regional Board for DECEMBER 2011: 

Inventory 

After a slight jump in inventory in October and November, December resumes the inventory decline in the Orlando market. Fifteen out of the last 17 months has seen Orlando’s housing inventory decline. Currently there are now only 9,732 housing units on the market through the Orlando Regional Multiple Listing Service.  Last December held an inventory of almost 15,000.  In December of 2008, there were 22,524 on the market.  At the very height of inventory in 2007, there were more than 28,000 homes on the market.

Overall inventory is down 35% from a year ago and 4% from last month. Single family inventory is down 34.5% and condo inventory is down 32.1% compared to a year ago. The current pace of sales equates to only 4.58 months worth of supply. Six months of supply is generally considered balanced.   Under normal conditions, anything above is generally considered a buyer’s market and anything below is then considered a seller’s market. 

Sales 

Sales of foreclosed homes declined by more than 56% in December of this year compared to December of last year.  Normal sales were up 24% and Short Sales were up by 14%.  

Of the 2,125 sales in December, 871 were “normal”, 785 were short sales and 469 were bank-owned.  This continues the solid   10 month trend now where normal sales have outpaced short sales.  However, foreclosures and short sales still accounted for 59% of all sales. 

Condo sales decreased by almost 35% in December when compared to last year at this time. The under $50,000 price range accounted for 38% of those sales and have dominated condo sales since March of 2009. Duplex, townhome and villa sales decreased by more than 9% over this time last year (211 units last month). As with last few months, most townhomes sold in the $100,000 to $120,000 price range (39 of them in December).   

Homes spent an average of 103 days on the market in December, four days more than last month. The average home sold for 92.4% of its then-current listing price.  “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 less than the percentage cited from its original debut listing price. 

By county in the Orlando MSA for sales compared to a year ago: Seminole County was down 4% from last December, Orange County was down almost 15%. Osceola came in down 13%, but Lake County has continued its reversal up again a little more than 4%.  No statistics for Volusia or Brevard were available (Volusia has several different realtor boards with both New Smyrna and Daytona each having their own and Volusia is officially part of the Daytona Beach MSA.  In addition, Brevard has its own Board). 

However, looking the year in total as compared to last year: 

Lake County is 3.26% up, Orange County 4.92% down, Osceola County comes in up by 1.03% and Seminole County leads with an increase of 4.51%. 

Prices 

For the year, overall housing prices actually rose in the Orlando market by 1.29%.  

The median price of an existing home was $118,000, an increase of 12.38% over December of last year.   

Remember - the median price above encompasses all sales. The median price for Bank Owned properties’ was $80,000, right where it has been for months now – but 6% higher than last December. Short Sales’ median came in at $105,000, 10% higher than last December. Normal sales price continues to lead the median price breakout with $159,000, just about where it was last December. Keep in mind that many times Bank Owned properties require extensive repair work which can be reflected in the price. 

Affordability 

The Orlando MSA affordability index decreased to 250 from last month’s 253 and the first time homebuyer’s index also decreased to 178 from 180 last month.

This has been see-sawing backing and forth for some time now and is inversely proportional to pricing changes. 

An affordability index of 100 means that a buyer earning the state-reported median income has exactly the income necessary to purchase the median-priced home.  Anything over 100 indicates that buyers have more income than that which is required.   A score of 99 means the buyer is 1 percent short of the income necessary to qualify. When prices rise faster than incomes, the affordability index goes down and visa-versa.

OrlandoUnemployment

In December 2009 the rate was 11.3%. In   December of 2010 it was 11.8%. The latest numbers for Orlando Florida – for November -  9.7%.  

Other Discussion, Opinion, Points and Tidbits.

Are We There Yet? 

Every parent’s annoying question.  Now every homeowner’s dread.

Does the 1.29% cumulative year end price increase reflect the turning point?  

All we can see is that all of the housing indicators for the Orlando market continue to move in the right direction. 

The inventory is down and prices seem to have stabilized and may have begun to rise.  Normal sales continue to outpace short sales.  Foreclosure sales are down.  Interest rates are at record lows. 

Right now, all that seems is needed is for the unemployment rate to come down more significantly.  At 9.7%, Orlando is still much higher than the national average.  Worse, it is widely held that the numbers for unemployment are much higher.  Those who have stopped looking for employment are no longer counted and those who are underemployed count as much as those fully employed, skewing the number downward artificially.  Estimates from 14 to 21% as real unemployment rates are put forth routinely. That of course, would translate to an unemployment rate much higher than 9.7 for Orlando. 

This is where we believe the Election Year influence will come into play.  While as with any election there are a myriad of issues to banter back and forth – but this election will laser like focus on the economy and more specifically – jobs - and the present administration’s policies to that end. 

President Obama’s approval rating is under 50% and only one president – Nixon, who was ousted in 1974 through his own resignation resulting from Watergate – has ever won re-election with approval ratings below 50% at the start of the election year. His own words in February of 2009 in a televised interview were that if he didn’t have the economy fixed in three years, “it is going to be a one term proposition”.

One question which will remain open for the next few months is whether or not business - and by extension, hiring - pulls back in anticipation of the election with the all too familiar wait and see attitude.  

Until next month……

Tidbits 

Rental History Now Counted for Credit.  Experian has added a score to some rental payments made on time.  CoreLogic and FICO plan to add similar scorings this year.  This could particularly help those otherwise-credit risks looking for home mortgages and may help those who went through a foreclosure rebuild their credit faster. 

Florida Leads Nation in Foreign Purchases. Florida leads the country in purchases of homes by foreign buyers.  Thirty one percent of all purchases made in Florida are made by foreign buyers these days. Topping the countries of origin are Cuba, Haiti and Columbia. California came in at number two with 12% - with most coming from Mexico, the Phillppines, China, India and Vietnam.   

Foreclosure Rate Lowest Since Pre-Recession.   According to RealtyTrac, about 1.9 million homes entered the foreclosure process in 2011, the lowest level since 2007.   This may be due to the delays in procedures and RealtyTrac contends the numbers will be higher in 2012, but still below the peak of 2010. 

Florida Third In Population Growth.  Florida ranks third for population growth estimates. Florida gained 256,000 new residents between April of 2010 and July of 2011 according to the U. S. Census Bureau.   Texas topped the list, followed by California. Georgia was number 4.  Only three states lost population –Rhode Island, Michigan, and Maine.

WE APPRECIATE YOUR REFERRALS!

Statistical Data and Graphs

* Monthly revised sales. ** Includes listings with a status of "Active With Contract."

 The statistics cited and the graphical data 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.