REGIONAL HOUSING MARKET UPDATE
The latest housing market data are in for Central Florida, including Lake Mary Florida, Longwood Florida, Oviedo Florida, Winter Springs Florida and Sanford Florida. Here are the highlights taken from the Orlando Realtor Regional Board for JANUARY 2012:
January continues the significant decline in residential inventory in the Orlando market. Sixteen out of the last 18 months has seen Orlando’s housing inventory decline. Currently there are now only 9,258 housing units on the market through the Orlando Regional Multiple Listing Service - down from 9,732 last month. Last January held an inventory of 14,380. 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 still down 35% from a year ago and almost 5% from last month. Single family inventory is down 36.35% and condo inventory is down 26.46% compared to a year ago. The current pace of sales equates to 5.52 months worth of supply – up from last month. 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.
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Overall home sales dropped by almost 18% in January from last month. A closer look at the numbers however, reveal that the drop in condo sales accounted for the bulk of the decline at almost 49% while single family homes were down just over 5%.
Sales of foreclosed homes continued its decline and was down by more than 57% in January of this year compared to this time last year. Normal sales were up 20% and Short Sales were up by 24%.
Of the 1,677 sales in January, 608 were “normal”, 637 were short sales and 432 were bank-owned. This broke the 10 month trend where normal sales had outpaced short sales.
Condo sales decreased by almost 49% in January when compared to last year at this time. The under $50,000 price range accounted for 44% of those sales and have dominated condo sales since March of 2009. Duplex, townhome and villa sales decreased by more than 20% over this time last year (160 units in January). Unlike the last few months, most townhomes sold in January sold in the under $50,000 price range.
Homes spent an average of 96 days on the market in January, a week less than last month. The average home sold for 95.19% of its then-current listing price – up from last month’s 92.4%. “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:SeminoleCountywas down 6% from last January,OrangeCountywas down almost 24%. Osceola came in down 28%, butLakeCountyhas continued its reversal - up again just under 1%. 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).
The median price of an existing home was $108,000, an increase of 13.8% over January of last year. However, this was a decrease of almost 10% from December. But this has been the case now for five years in a row – where the median price has dropped between December and January.
Remember - the median price above encompasses all sales. The median price of bank owned properties actually rose by 13% to $85,000. Normal sales dropped to $140,000 and short sales dropped to an average of $90,000.
The Orlando MSA affordability index increased to 273 from last month’s 250 and the first time homebuyer’s index also decreased to 194 from 178 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.
Orlando Florida Unemployment Rate
In December 2009 the rate was 11.3%. In December of 2010 it was 11.8%. The latest numbers for Orlando Florida –for December 2011 - we are at 9.5% - a drop of 0.2% from November. The national average in December was 8.7%.
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Other Discussion, Opinion, Points and Tidbits
The Call to Raise Taxes Is A Distraction
A favorite line of many politicians is to rail against corporations and wealthy individuals and to “demand” that those entities or persons “pay their fair share”. Indeed – the current administration is no exception given the budget recently released and the campaign stumping now going on.
While there is certainly a diatribe of some sort lurking either way depending on how one feels about the validity of the aforementioned, there are two salient points that need to be made.
The first is that it is a popular political fabrication and falsehood that corporations pay taxes. They don’t. Only individuals pay taxes. Corporations add taxes to their over all proforma and thus take into account taxes when determining their overall pricing strategy just as with any other expense. Individuals cannot turn around and collect their potential tax bill from elsewhere. Thus - corporations are simply a method of collection for government.
The second point is that currently 71% of the income taxes collected are paid by approximately 10% of the tax-paying population. The bottom 50% contributes only 2.25%.
This is a most sobering fact when you consider that a politician can get elected with that other 90% of voters by offering them that 10%’s money! (If you don’t think this possible just look at the latest example of just such in Greece - too many takers and not enough payers for far too long).
Thus, these higher income-earning individuals already pay more than their fair share. Playing the class warfare card is only a distraction to a failed economy and a crushing national debt. Relying on these individuals to pay more will produce nothing towards a sustained economic recovery. Even if ever passed, the increase in tax revenue will be amount to less than a drop in a barrel of crude oil.
As we’ve maintained from the beginning – an overall improved economy with real job growth is the only way that a vibrant and sustained recovery can occur. A dollar invested in a factory, pipeline or new home rather than immediately taxed can create far more overall tax revenue from the taxable-dividends its income can produce to the payroll wages paid out (and taxed) to the goods produced and sold to consumers.
Until next month……
Corporate Income Tax Break OK’d by Florida House. The FL House voted largely along partisan lines 92-22 in favor of raising the corporate income tax exemption from $25,000 to $50,000. It is expected that if passed by the FL Senate, some 3,500 businesses would no longer pay any corporate income tax.
Smaller Investors Jumping Into Housing Market. Many mom-and-pop investors are jumping into the housing market with an overall strategy to buy at these depressed prices, hold and rent the properties and sell them when the market fully recovers. These types of investors purchased more than 26% of the housing units nationwide.
Driving Record Is Now A Consideration. All-State Insurance has confirmed that it will now begin to look at the driving record and auto-claims of an individual when considering providing he or she homeowner’s insurance and how much it will charge.
Short Sellers Need to Close In 2012. The tax break for a Seller’s principal residence debt forgiveness ends in December of this year. Thus, unless it is extended by Congress, Sellers closing on short sale after December 2012 will have to pay tax on the amount of debt forgiven as if it were received as income. The break only applies to principal residences and not second homes, vacant land or commercial properties.
NAHB Says More Housing Markets Improving. Twenty-nine metro areas were added to the list last month for improving markets. Miami was just added, bringing the total to seven for Florida:Cape Coral, Deltona,Jacksonville,Miami,NorthPort, Punta Gorda andTampa. Thirty six states have at least one area.
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Statistical Data and Graphs
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.