Orlando’s Median Home Price Drops to $146,200 for January 2014, a 6.9 Percent Decline to Start 2014

Orlando’s Median Home Price Drops to $146,200 for January 2014, a 6.9 Percent Decline to Start 2014
In January, the Orlando Median Home Price dropped to $146,200 for the month, after being up sharply for much of the year in 2013. Inventories rose again for the eighth straight month, increasing the number of homes for sale by another 3.0 percent. The continuous increase in inventory will continue to exert downward pressure on home prices. Now with inventory at 5.16 months worth of supply, the market has nearly reached the 6 months supply that most experts point to as a balanced market. If home buying demand does not keep pace with the recent inventory rise, expect prices to fall over time. Let’s take a look and see what else is happening in the Orlando real estate market.

Orlando Median Home Price for January 2014—$146,200
Orlando’s median home price was down 3.0 percent in January to $146,200, after being up for most of 2013, only dipping slightly in August and November of 2013. Orlando’s median home price increased 21.7 percent in 2013, improving home seller’s position greatly over the year. Now with the sudden drop in home prices to start 2014, what does the future hold for Orlando’s ever changing housing market? Since January of 2012 when Orlando’s median home price was only $109,900, home prices have risen 33.0% here in Orlando Florida. Although this latest drop in home prices is a big one, we’ll need to watch the numbers over time to see how noteworthy this price drop actually is.

Orlando Active Homes for Sale Listings (Inventory of Unsold Homes)—11,699 units
In January, the number of homes for sale in the Orlando area increased by 338 units for a total of 11,699 units. This increase in the number of homes for sale in Orlando represents a 3.0 percent increase in just the month of January. This increase in inventory marks the eighth straight month of increase, which is concerning as we are nearing a statistically balanced market of six months supply. Expect home prices to decline if inventory levels continue to rise.

Orlando Pending Home Sales (homes under contract)—7,384 units
Orlando’s pending home sales (homes under purchase contract) were up from the 6,936 units under contract in December 2013, to 7,384 units under contract for January 2014. Although this is an improvement over December 2013, we should compare this year to last year in January, when there were 9,800 homes under contract, which means 24.7 percent fewer homes went under contract in January 2014 vs January 2013. This decline in pending sales indicates that fewer homebuyers are submitting purchase offers, which is a negative indicator for sellers.

Homes Sold—2,308 units
In January, 2,308 homes sold and closed in the Orlando MSA. In January 2013, 2,351 homes sold and closed which was 43 more closings than this year.

Orlando Months Supply of Inventory (MOI)—5.16 MOI
The Months Supply of Inventory (MOI) was up for January 2014 to 5.16 MOI. This increase in the months of supply of unsold homes favors homebuyers.

Now with the months supply nearing a balance between buyers and sellers, buyers should see that the home sellers are more agreeable to lowering their asking price during contract negotiations. Experts point to a six-month supply (6.0 MOI) of homes for sale as a balanced market. At 5.16, MOI, Orlando is quickly moving towards a balanced market.

Orlando Real Estate Market Summary—January 2014
Since May 2013, the Orlando real estate market has added 3,589 homes for sale to its growing inventory of unsold homes. This 44.3% increase in inventory will have an effect on Orlando’s real estate market going forward. Since pending home sales are down as well, we must acknowledge that homebuyer enthusiasm has declined since May of 2013. At this time, I don’t see any real reason for the pullback. Yes, mortgage interest are rates slightly higher, now at 4.43%, but this pullback seems to be more fear related.

Since Orlando’s real estate market has been heavily weighted towards home sellers for some time, this turn in the market will give frustrated homebuyers an opportunity to locate and secure a suitable home. For months, frustrated homebuyers have faced fierce competition and competing purchase offers. Now, the market is much more balanced and trending towards a buyer’s market, so finally homebuyers may be able to purchase their dream home before the next home buying craze hits Orlando.

Communities in Focus:

January 2014 Active Listings Pendings Properties Sold Median Home Price Months Suppy Active vs Last Month
             
ORLANDO MSA 11,699 7,384 2,268 $146,200 5.16 338
Short Sales 1,287 3,601 277 $123,000 4.65 -12
Foreclosures 1,584 1,179 562 $112,350 2.82 -63
CITIES AND TOWNS            
Altamonte Springs 251 169 71 $89,000 3.54 21
Apopka 381 318 83 $162,000 4.59 10
Casselberry 99 129 31 $128,000 3.19 -14
Celebration 122 38 12 $372,500 10.17 -13
Clermont 550 267 82 $166,500 6.71 2
Davenport 655 245 99 $149,000 6.62 27
Kissimmee 1,507 941 272 $130,000 5.54 117
Lake Mary 168 133 40 $214,250 4.20 -4
Longwood 254 187 71 $171,500 3.58 3
Maitland 133 65 26 $243,750 5.12 -2
Montverde 46 12 3 $150,000 15.33 1
Mount Dora 259 78 46 $167,500 5.63 3
Ocoee 133 148 32 $153,250 4.16 -6
Orlando 3,382 2,773 746 $139,000 4.53 163
Oviedo 183 164 55 $219,900 3.33 -10
Sanford 353 240 64 $118,000 5.52 -4
Sorrento 65 33 14 $170,450 4.64 1
St. Cloud 397 281 64 $118,000 6.20 -5
Windermere 304 136 45 $428,000 6.76 0
Winter Garden 233 192 61 $233,900 3.82 -1
Winter Park 393 167 88 $175,000 4.47 10
Winter Springs 183 142 45 $192,250 4.07 7
COMMUNITIES            
Avalon Park 146 97 27 $198,101 5.41 6
Baldwin Park 42 27 5 $385,000 8.40 -10
College Park 102 49 16 $242,500 6.38 -3
Conway Area 94 50 17 $188,750 5.53 -7
Downtown Orlando 84 48 15 $198,000 5.60 -7
Dr Phillips Area 189 110 31 $310,000 6.10 12
Heathrow 49 23 9 $335,000 5.44 -2
Hunter's Creek 84 74 18 $188,450 4.67 -1
Isleworth 28 3 1 $1,371,300 28.00 -2
Keene's Pointe 42 9 6 $582,500 7.00 4
Lake Nona 187 79 33 $310,000 5.67 18
Metrowest 78 81 17 $138,000 4.59 -9
Waterford Lakes 71 41 12 $209,000 5.92 7
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