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Orlando Florida Regional Housing Market Update June 2020

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THE ORLANDO FLORIDA

REGIONAL HOUSING

MARKET UPDATE

 

 

 

June 2020

 

As the country continues to reopen, the answer(s) to the impact of the COVID19 Pandemic on the housing market has become a bit more murky as inventory numbers drop, reversing a 90 day trend upward, and new listings and contracts surge, while mortgage rates remain steady.   A lagging indicator related to the  foregoing, is closings – which, as expected since they were related to activity in the last 45-60 days, continued a downward trend.

The overall financial markets have been buoyed by better than the worst news, namely in unemployment numbers and better than expected numbers from a number of retailers and businesses.

In the meantime, there has been an uptick in COVID19 case numbers in Florida.  The governor has largely attributed this on the significant increase in test availability as the number of hospitalizations have not had a corresponding rise, and the fatality numbers have continued to decrease as of this report.

The Executive Emergency Order issued by Governor DeSantis is slated to expire on July 7.   As of this report, there are no announced plans of any extensions.

 

 

This Month’s Report………

 

 

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 May 2020 (the latest now available):

 

 

 

Inventory

Surprisingly, inventory numbers dropped 5.2% from last month and 10.6% from a year ago. 

Homes spent an average of 48 days on the market, one day more than last month and 6 days less than two months ago. Last year it was 52 days and two years ago it was 50 days.   At the current pace of sales, there is is now an overall average supply of a 3.4 months, up from 3.2 last month and 2.1 a year ago.  

  

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.

 

 

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 2,217 sales in May (actual closed sales from MLS listings) a 44.1% drop from last year at this time  – and a drop of 11.1% drop from last month.    

This was to be expected with the COVID19 Pandemic fall out.  Sales numbers – actual closings – lag behind other activity as the sales process plays out once a property is under contract. 

Pending sales – a forward indicator - are up 34.0% from last month.

 

 

 

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 $259,900,  up 7.0% from a year ago , but 1.5% below last month.    

The year over year median price for a single family home was up 5.4% from the previous year at this time to $277,500. Condos posted an increase of 2.8% over last year at this time coming in at $140,000 and townhouses increased 3.1% to $218,250.   

Sales of existing homes can take up to 45 to 60 days to complete and sales of new homes can take six to nine months to complete.  Thus, the prices paid then in many cases were already determined well before the full extent of the pandemic was in progress.    

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 are unavailable.   –   The national average for May 2020 was 13.3% - down from 14.7 last month. This may still be artificially skewed as many unemployment benefits still in being paid, offer more than usual and may provide some incentive for some not to return to work until those benefits run out.   

 

 

 

Average Orlando MSA Interest Rates*

 

The average interest rate paid in the Orlando MSA experienced some wild swings over the past few weeks but has settled down and has remained under 4% to an average of 3.22%, up from 3.20% 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

 

 

 

 

 

 

 

 

WE DO APPRECIATE YOUR REFERRALS!

 

 

 

 

*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.

 

  



All listing information is deemed reliable but not guaranteed and should be independently verified through personal inspection by appropriate professionals. Listings displayed on this website may be subject to prior sale or removal from sale; availability of any listing should always be independent verified. Listing information is provided for consumer personal, non-commercial use, solely to identify potential properties for potential purchase; all other use is strictly prohibited and may violate relevant federal and state law. The source of the listing data is as follows: | Stellar MLS (updated 10/23/20 5:49 PM)
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New Southern Properties Inc.
4300 West Lake Mary Blvd
Bldg 1010, #415
Lake Mary, FL 32746
Phone: 321-262-6162
Email: CLICK HERE