Orlando Real Estate News

U. S. existing-home sales moved down in March, remaining within a narrow range of sales activity that has persisted since last September, according to the National Association of Realtors®.

Existing-home sales – including single-family, townhomes, condominiums and co-ops – were down 2.0 percent to a seasonally adjusted annual rate1 of 4.93 million units in March from a level of 5.03 million in February, and remain 19.3 percent below the 6.11 million-unit pace in March 2007. A rise in condo sales in March was offset by a drop in single-family sales. Regionally, sales rose in the Northeast and West but fell in the Midwest and South.

Lawrence Yun, NAR chief economist, said the market is performing unevenly. “Though mortgage rates are at historically low levels, some borrowers are facing restrictive lending practices in declining markets,” he said. “At the same time, many buyers continue to bide their time with a large number of homes to choose from, while other potential buyers remain on the sidelines.”

The national median existing-home price2 for all housing types was $200,700 in March, down 7.7 percent from a year ago when the median was $217,400. Because the slowdown in home sales from a year ago is greater in high-cost areas, there is a downward pull to the national median with relatively higher sales activity in low-cost markets.

A mix of market conditions continues around the country, but areas showing healthy price gains include Des Moines, Iowa; Austin, Texas; and Durham, N.C.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 5.97 percent in March from 5.92 percent in February; the rate was 6.16 percent in March 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said there are problems with the implementation of mortgage guidelines. “It appears there is some over-reaction on the part of some lenders now in requiring higher downpayment percentages than may be necessary,” he said. “On the other hand, buyers in many parts of the country are able to take advantage of more lenient policies for FHA loans. However, because lenders don’t have enough underwriting experience with FHA loans in high-cost areas, there are localized bottlenecks in loan processing. Consumers should consult with a Realtor® in their area to learn about the kind of financing that may be available to meet their needs.”

Yun offered a caution. “With elevated inflation, the Federal Reserve should be extra careful about further rate cuts,” he said. “Mortgage interest rates, which do not move directly with Fed funds rates, may rise measurably and hurt the housing recovery if inflation gets out of hand. Monetary stimulus is plentiful – what is needed more at this point is a home buyer tax credit to get buyers off the sidelines and prevent the market from overshooting on the downside.”

Total housing inventory rose 1.0 percent at the end of March percent to 4.06 million existing homes available for sale, which represents a 9.9-month supply3 at the current sales pace, up from a 9.6-month supply in February.

Single-family home sales fell 2.7 percent to a seasonally adjusted annual rate of 4.35 million in March from 4.47 million in February, and are 18.4 percent below the 5.33 million-unit pace in March 2007. The median existing single-family home price was $198,200 in March, down 8.3 percent from a year ago.

Existing condominium and co-op sales rose 3.6 percent to a seasonally adjusted annual rate of 580,000 units in March from 560,000 in February, but are 25.5 percent below the 779,000-unit level a year ago. The median existing condo price4 was $219,400 in March, which is 2.8 percent lower than March 2007.

Regionally, existing-home sales in the Northeast rose 2.2 percent to an annual pace of 910,000 in March, but are 18.8 percent below March 2007. The median price in the Northeast was $284,300, up 4.6 percent from a year ago.

Existing-home sales in the West rose 2.2 percent in March to a level of 940,000 but are 22.3 percent below a year ago. The median price in the West was $285,100, which is 14.7 percent lower than March 2007.

In the South, existing-home sales fell 3.5 percent to an annual rate of 1.92 million in March and are 20.0 percent below March 2007. The median price in the South was $167,200, down 7.1 percent from a year ago.

Existing-home sales in the Midwest dropped 6.5 percent to an annual rate of 1.16 million in March, and are 15.9 percent below a year ago. The median price in the Midwest was $152,600, down 5.3 percent from March 2007.

The National Association of Realtors®, “The Voice for Real Estate,” is America’s largest trade association, representing 1.2 million members involved in all aspects of the residential and commercial real estate industries.

# # #

1 The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume is normally higher in the summer than in the winter, primarily because of differences in the weather and family buying patterns. However, seasonal factors cannot compensate for abnormal weather patterns.

Existing-home sales, which include single-family, townhomes, condominiums and co-ops, are based on transaction closings. This differs from the U.S. Census Bureau’s series on new single-family home sales, which are based on contracts or the acceptance of a deposit. Because of these differences, it is not uncommon for each series to move in different directions in the same month. In addition, existing-home sales, which generally account for 85 percent of total home sales, are based on a much larger sample – nearly 40 percent of multiple listing service data each month – and typically are not subject to large prior-month revisions.

2 The only valid comparisons for median prices are with the same period a year earlier due to the seasonality in buying patterns. Month-to-month comparisons do not compensate for seasonal changes, especially for the timing of family buying patterns. Changes in the geographic composition of sales can distort median price data. Year-ago median and mean prices sometimes are revised in an automated process if more data is received than was originally reported.

3 Total inventory and month’s supply data are available back through 1999, while single-family inventory and month’s supply are available back to 1982. Condos were tracked quarterly prior to 1999 when single-family homes accounted for more than nine out of 10 purchases (e.g., condos were 9.5 percent of transactions in 1998, 8.5 percent in 1990 and only 6.1 percent in 1982).

4 Because there is a concentration of condos in high-cost metro areas, the national median condo price can be higher than the median single-family price. In a given market area, condos typically cost less than single-family homes.

Existing-home sales for April will be released May 23, and the next Forecast/Pending Home Sales Index is scheduled for May 7.

March sales increase as prices decline – Orlando’s housing market experienced an increase in the number of home sales month over month, an increase in the number of pending sales contracts, and a decrease in the amount of inventory – all positive moves towards a more balanced market between buyers and sellers.

Orlando Regional Realtor® Association’s monthly statistical reports released revealed some additional interesting signs for the month of March:

the sales of homes costing upwards of $1 million more than doubled in March compared to last month;
the sales of duplexes, town homes, and villas have increased in each of the last three months; and
the majority of condos sold have fallen into lower and lower price categories for each of the last three months.
The median sales price of a single-family home in the Orlando area decreased by 1.35 percent ($3,000) from $223,000 in February 2008 to $220,000 in March 2008. The median sales price for March 2008 is 8.33 percent below that of March 2007 ($240,000).

The decrease in the median home price to $220,000 means that the area’s affordability index increased in March to 102.35 percent. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $51,506 can qualify to purchase one of 10,980 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $225,170 or less.

The first time homebuyer affordability index held steady in March, at 72.78.

The number of sales in the Orlando area declined by 39.29 percent in March 2008 compared to March of last year (1,080 to 1,779), but the number of sales that took place in March 2008 increased by 13.56 percent compared to the number of sales that occurred in February 2008 (951).

There are currently 2,398 homes in the MLS with pending sales contracts (an indicator of future sales activity), up from 1,731 in January and 2,175 in February. The number of homes newly under contract increased by 142 in March, and the increase from January to February was 298.

The area’s average interest rate was 5.94 percent in March 2008, up from 5.87 percent in February but down from 2007’s high of 6.60 percent in August.

Homes of all types spent an average of 130 days on the market before being sold in March 2008; the average home sold for 93.53 percent of its original asking price. In March 2007 those numbers were 90 and 95.87 percent, respectively.

The majority of single-family homes (223) that changed hands in March 2008 were sold for between $200,000 and $250,000. Another 129 homes sold in March for between $250,000 and $300,000. Two hundred eighty-four homes sold for less than $200,000 in March, and 260 sold for more than $300,000. On the far ends of the scale, 31 homes were sold for $1 million or more (double the number sold in February) while only 10 homes sold for less than $50,000.

Inventory

There are currently 25,472 homes available for purchase through the MLS. Inventory decreased by 512 homes in March 2008, which means that 512 more homes left the market than entered the market. Compared to last year, the March 2008 inventory level (25,472) is 8.18 percent higher than it was in March 2007 (23,547).

The current inventory level reflects a 23.59-month supply at the current pace of sales, which is down from February 2008’s 27.32-month supply

There are 19,197 single-family homes currently listed in the MLS. Most (6,489) are listed in the $200,000 to $300,000 price range. Condos currently make up 4,175 offerings in the MLS, while duplexes/town homes/villas make up the remaining 2,100. Most condos (552) are priced at $120,000 to $140,000, but nearly equal numbers are posted in both the $140,000 to $160,000 and the $200,000 to $250,000 ranges. The majority of duplexes/town homes/villas (447) are listed in the $200,000 to $250,000 range.

Condos and Town homes/Duplexes/Villas

The sales of condos in the Orlando area declined by 65.57 percent in March: A total of 84 condos changed hands in March 2008 compared to 244 in March 2007. In a month-to-month comparison, March 2008 condo sales (84) decreased by 26.32 percent from February 2008 (114).

The most (18) condos that changed hands in March 2008 fell into the $120,000 to $140,000 range; last month, most condos sold in the $160,000 to $180,000 range.

Orlando homebuyers purchased 100 duplexes, town homes, and villas in March 2008, which is a 31.97 percent decline from March 2007 when 147 of these alternative housing types were purchased. However, duplex, town home, and villa sales in March 2008 were up by 26.58 percent compared to the number of sales that took place in February 2008 (79), the second month-over-month increase already this year. The majority (20) of duplexes, town homes, and villas sold in March 2008 fell into the $140,000 to $160,000 category.

MSA Numbers

Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in March were down by 38.65 percent when compared to March of last year. Throughout the entire MSA, 1,319 homes were sold in March 2008 compared with 2,150 in March 2007. Year-to-date, the MSA is down by 40.91 percent, with 3,429 homes sold far in 2008 compared to 5,803 sold through March 2007.

Seminole County’s March 2008 sales dropped 41.26 percent below that of March 2007 (252 to 429), while Orange County fell 41.99 percent (637 to 1,098). Lake County saw a 24.09 percent decline in the number of sales in March 2008 compared to March 2007 (249 to 328), and Osceola County experienced a 38.64 percent drop (181 to 295).

Each county’s year-to-date sales comparisons are as follows:

Lake: 23.57 percent below 2007 (655 homes sold to date in 2008 compared to 857 in 2007);
Orange: 44.93 percent below 2007 (1,647 homes sold to date in 2008 compared to 2,991 in 2007);
Osceola: 43.14 percent below 2007 (460 homes sold to date in 2008 compared to 809 in 2007); and
Seminole: 41.80 percent below 2007 (667 sold to date in 2008 compared to 1,146 in 2007).