THE ORLANDO FLORIDA
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, Edgewater Florida, Apopka Florida, Orlando Florida, Geneva Florida, Belle Isle Florida, Maitland Florida, Sorrento Florida, Deltona Florida, and Altamonte Springs Florida. Here are the highlights taken from the Orlando Realtor Regional Board report ending December 2017 (the latest now available):
The Short Story
Overall inventory continues to decline, with an acceleration in this decline over this last month. As a result of simple supply and demand, prices continue to rise as the pace of sales remains fairly steady. Overall loan rates have remained largely unchanged.
Inventory continues to decline but was more dramatic this past month. There are now 7,508 homes on the market, down from 8,294 last month and 8,464 homes the month previous to that. This is a whopping 9.5% lower than last month and 12.6% lower than last December.
These inventory numbers include all homes: single family homes, condos, duplexes and townhomes. A year ago the unadjusted inventory was 8,590 and two years ago it was 10,634. For further comparison: In December of 2008, there were 22,524 on the market. In March 2013, which was where inventory bottomed out, there were only 6,937.
Single family home inventory is down 9.4% from a year ago, and the condo inventory is down by 27.5%.
Normal (aka arms-length) sale inventory is down 10.3% from last year and bank-owned inventory is now down by 43.1% from a year ago. This is the thirty-third month in a row the bank-owned inventory number has dropped. Short sale inventory declined again and is now down by 48.0% from a year ago.
The significance of these last two percentages is that each year a smaller and smaller number is being used for comparison for the short sale and bank-owned inventories which means the overall comparative reduction is even greater than the numbers suggest.
Short sales and foreclosures are no longer having any influence on the overall Central Florida housing market. Recent articles have pointed out that in most places in the country, the inventory of foreclosures and short sales have reached pre-2008 meltdown levels.
Homes spent an average of 62 days on the market in December – the same as last month, and 3 days fewer than a year ago and 10 days less than two years ago. At the current pace of sales, there is a 2.5 month supply.
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, these are terms used loosely as descriptors. 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 pay mor, and by how much, as inventory numbers tighten.
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There were 3,006 closings (actual sales) in December, up .3% from a year ago and up 8.6% from November.
Single family home sales decreased 2.8% and condo sales were up 10.1% compared to a year ago.
Of the sales in December, 95.0% (2,855) were normal, arms-length transactions.
The number of normal sales increased by 5.6% as compared to a year ago. At the same time, bank-owned sales were down 54.7% and short sales were down 30.4% from a year ago.
Sales of existing homes in the entire Orlando MSA are were 1.2% from a year ago, and despite Irma, were up 3.8% for the year.
The average home sold for 97.1%, of its then-current listing price. This is just slightly higher than a year ago. However, “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 a lot less than the percentage cited from its original debut listing price.
2017 Year End Recap for Sales
A total of 37,198 homes (averaging 3,100 per month) were sold in 2017 compared to 35,829 in 2016 – a 3.8% increase.
Single family home sales increased by 2.1% over 2016. Condo sales were up 10.3% and townhomes and duplexes increased by 10.7%
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The median (usually close to the average) price of all homes sales rose 10.3% from a year ago to $230,000, and a 2.2% increase from last month. Seventy-six of the past 77 months have seen year-over-year price increases in the Orlando MSA.
However, the overall average home price in December 2017 is now $279,474 – 16.5% more than December 2016.
The year over year median price for a single family home increased 7.7% as compared to last year. Condos posted an increase of 22.8% over last year.
Single family homes have now posted 77 consecutive months of year over year price increases.
“Normal” arms-length sales went up by 8.6% over last year and Bank-owned prices increased 3.45% and short sale prices decreased by 3.1%.
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 $200,000 - $300,000 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-400s-500s is fairly common.
2017 Year End Recap for Prices
The median price increased by 10.0% over the course of 2017.
In addition, during 2017, the median price of a single family home increased 8.2%, condos went up 17.7% and townhomes went up 10.8%.
The latest numbers for the Orlando Florida MSA – for November was 3.4%. A year ago it was 4.3%. The “official” national average was unchanged at 4.1% for December.
Average Orlando MSA Interest Rates*
The average interest rate paid in the Orlando MSA last month was 3.97% - down from 3.96% in November. A year ago it was 4.32% and two years ago it was also 4.02%. Home loan rates tend to generally trend along with the ten-year US Treasury bond markets.
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*The interest rate statistic is over all types of loans with varying terms and conditions and should be used as trend reference number only. Consult your lending representative for rates that would apply to you.
The statistics cited 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.