Orlando Real Estate News

U.S. existing home sales were up slightly in May, due in part to higher home affordability levels for buyers.
 

Existing home sales – including single-family, townhomes, condominiums and co-ops – increased 2.0 percent to a seasonally adjusted annual rate 1 of 4.99 million units in May from a level of 4.89 million in April, but are 15.9 percent below the 5.93 million-unit pace in May 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said buyers are seeing value in the current housing market. “Home buyers are starting to get off the fence and into the market, drawn by drops in home prices in many areas and armed with greater access to affordable mortgages,” he said. “Today’s buyer plans to stay in a home for 10 years, which is a good strategy for building long-term wealth.”

The national median existing-home price2 for all housing types was $208,600 in May, down 6.3 percent from a year ago when the median was $222,700.

Lawrence Yun, NAR chief economist, said there’s still a lot of inventory in the market. “The large supply of homes on the market clearly favors buyers, and it should take several months to draw the inventory down,” he said. “Stabilization in home prices can only occur with buyers returning to the market, so we are encouraged by rising home sales, particularly in distressed markets. Foreclosures and short sales appear to be a larger part of the market, particularly in California, and are creating a drag on current home prices.”

Total housing inventory at the end of May fell 1.4 percent to 4.49 million existing homes available for sale, which represents a 10.8-month supply3 at the current sales pace, down from a 11.2-month supply in April.

Although conditions remain mixed around the country, unpublished snapshot data shows a number of areas are experiencing much higher sales activity than May 2007, including Sacramento, the San Fernando Valley and Monterey County in California; Sarasota, Fla.; and Battle Creek, Mich.

“Keep in mind that the volume of home sales is the primary driver of economic activity that is tied to housing,” Yun said. “It’d be premature to say the improvement marks a turnaround. The market is fragile, so a first-time home buyer tax credit and a permanent raise in loan limits would be important steps to get the housing engine humming.”

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage rose to 6.04 percent in May from 5.92 percent in April; the rate was 6.26 percent in May 2007.

Single-family home sales rose 1.6 percent to a seasonally adjusted annual rate of 4.41 million in May from 4.34 million in April, but are 14.5 percent below the 5.16 million-unit pace in May 2007. The median existing single-family home price was $206,700 in May, which is 6.8 percent below a year ago.

Existing condominium and co-op sales increased 5.5 percent to a seasonally adjusted annual rate of 580,000 units in May from 550,000 in April, but are 24.6 percent lower than the 769,000-unit level a year ago. The median existing condo price4 was $223,400 in May, down 2.1 percent from May 2007.

Regionally, existing-home sales in the Midwest rose 5.5 percent in May to a pace of 1.16 million but are 16.5 percent lower than a year ago. The median price in the Midwest was $165,300, which is 0.7 percent below May 2007.

In the Northeast, existing-home sales rose 4.6 percent to an annual rate of 910,000 in May, but are 15.0 percent below May 2007. The median price in the Northeast was $278,000, down 2.4 percent from a year ago.

Existing-home sales in the West increased 2.0 percent to an annual pace of 1.02 million in May, but are 12.8 percent below a year ago. The median price in the West was $286,600, which is 16.0 percent lower than May 2007.

In the South, existing-home sales slipped 0.5 percent to an annual rate of 1.91 million in May, and are 17.0 percent below May 2007. The median price in the South was $175,000, down 4.3 percent from May 2007.

May closed sales increase for the 4th straight month – Orlando Florida’s housing market appears to be stabilizing a bit, and moving towards a more balanced market between home buyers and sellers.

For the forth month in a row, the Orlando Regional Realtor Association reported a month over month increase in the number of closed home sales. Also, an increase in the number of contracts pending, and a decrease in the amount of inventory all point to some positive moves in the market.

The Orlando Regional Realtors Associations’ (ORRA) members sold 1,276 homes in May 2008, which is a 3.66 percent increase over the 1,231 sales in April 2008. The 1,276 home sales this May is still 26.88 percent below the 1,745 homes sold in May 2007.

There was a slight increase in Orlando home prices this May. May’s median price rose to $214,000, a 1.42 percent increase over the April 2008 median price of $211,000. The $214,000 median price this year is down from $250,000 or 14.40 percent from May 2007.

The increase in the median home price to $214,000 means that the area’s affordability index dropped a fraction in May to 105.45 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.) Home buyers who earn the reported median income of $48,952 can qualify to purchase one of 9,294 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $225,663 or less.

The first time homebuyer affordability index decreased to 74.99 percent from April’s 77.38 percent.

There are currently 3,225 homes in the MLS with pending sales contracts (an indicator of increasing sales activity), up from 2,853 in April and 2,398 in March. The number of homes that came newly under contract in May decreased slightly to 2,010; there were 2,012 homes newly under contract in April and 1,679 in March.

The area’s average interest rate was 5.94 percent in May 2008, up from 5.77 percent in April.

Homes of all types spent an average of 121 days on the market before being sold in May 2008; the average home sold for 93.79 percent of its listing price. In May 2007 those numbers were 94 and 95.43 percent, respectively.

The majority of single-family homes (243) that changed hands in May 2008 were sold in the $200,000 - $250,000 price range. Another 137 homes sold in May for between $250,000 and $300,000. Three hundred seventy-five homes sold for less than $200,000 in May, and 284 sold for more than $300,000. On the far ends of the scale, 25 homes were sold for $1 million or more while 11 homes sold for less than $50,000.

Orlando Housing Inventory

There are currently 25,015 homes available for purchase through the MLS. Inventory decreased by 421 homes in May 2008, which means that 421 more homes left the market than entered the market. Compared to last year, the May 2008 inventory level (25,015) is 1.76 percent lower than it was in May 2007 (25,463).

The current inventory level reflects a 19.60-month supply at the current pace of sales, which is down from April 2008’s 20.66-month supply and March’s 22.74-month supply.

There are 18,665 single-family homes currently listed in the MLS. Most (3,310) are listed in the $200,000 - $250,000 price range. Condos currently make up 4,283 offerings in the MLS, while duplexes/town homes/villas make up the remaining 2,067. Most condos (591) are priced at $120,000 - $140,000, but nearly as many are posted in the $140,000 - $160,000 range (513). The majority of duplexes/town homes/villas (413) are listed in the $200,000 - $250,000 price category.

Condos and Town homes/Duplexes/Villas

The sales of condos in the Orlando area declined by 30.16 percent in May: A total of 132 condos changed hands in May 2008 compared to 189 in May 2007. In a month-to-month comparison, May 2008 condo sales (132) increased by 12.82 percent from April 2008 (117).

In May, the most (22) condos that changed hands were the $100,000 - $120,000 price category. In April there were 21 condos fell into both the $100,000 - $120,000 and the $120,000 - $140,000 categories, while in March most (20) fell in the $120,000 - $140,000 category.

Orlando homebuyers purchased 105 duplexes, town homes, and villas in May 2008, which is a 31.82 percent decline from May 2007 when 154 of these alternative housing types were purchased. Duplex, town home, and villa sales in May 2008 were down by 12.50 percent compared to the number of sales that took place in April 2008 (120), a month that saw a 9.09 percent increase over March. In addition, March sales increased by 39.24 percent over February.

The majority (21) of duplexes, town homes, and villas sold in May 2008 fell into the $140,000 - $160,000 price category.

Orlando MSA Numbers

Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in May were down by 20.77 percent when compared to May of last year.
Throughout the entire MSA, 1,583 homes were sold in May 2008 compared with 1,998 in May 2007. Year-to-date, the MSA is down by 32.36 percent, with 6,516 homes sold far in 2008 compared to 9,633 sold through May 2007.

Seminole County’s May 2008 sales dropped 29.16 percent below that of May 2007 (328 to 463), while Orange County fell 21.03 percent (766 to 970). Lake County saw a 12.82 percent decline in the number of sales in May 2008 compared to May 2007 (272 to 312), and Osceola County experienced a 14.23 percent drop (217 to 253).

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

Lake: 17.96 percent below 2007 (1,188 homes sold to date in 2008 compared to 1,448 in 2007);
Orange: 35.66 percent below 2007 (3,132 homes sold to date in 2008 compared to 4,868 in 2007);
Osceola: 31.38 percent below 2007 (903 homes sold to date in 2008 compared to 1,316 in 2007); and
Seminole: 35.38 percent below 2007 (1,293 sold to date in 2008 compared to 2,001 in 2007).

A temporary tax credit would be the best incentive to move hesitant home buyers into the market, the NATIONAL ASSOCIATION OF REALTORS® told Congress on Thursday.

NAR said the tactic has been successful before; A 1975 temporary tax credit helped to “clear an over-supply of newly constructed homes during an economic downturn.”

“We urge Congress to move quickly to conference and final passage of this tax incentive,” said Jim Helsel, NAR treasurer and a partner in RSR, REALTORS®, in Lemoyne, Penn. “Failure to act quickly could further stall the housing market, hurting many of our members, who are predominantly small businesses owners and self-employed individuals.”

Testifying for NAR before the House Committee on Small Business, Helsel said there are “three critical features for an optimal home buyer tax credit.”
The credit should apply to all residential real estate — not solely foreclosed properties.
It should be temporary and only apply for a short period of time.
It should provide higher income limits than those the House has imposed, particularly for single individuals.

“If these measures are put in place, many individuals who are sitting on the fence will take steps to buy a home. This would not only help homeowners, buyers and sellers, but also it could expand activity as individuals furnish, paint and improve their homes. This would help boost the nation’s economy,” Helsel said.

NAR also discussed the importance of updating the “passive loss” rules that were enacted in 1986 to bring small investors back to real estate. The passive loss rules were not indexed for inflation, making the tax incentive irrelevant in most cases, Helsel said.

Source: NAR

U.S. existing home sales were down slightly in April, due in part to restrictive lending which hampered home buyers. At the same time, a number of areas are showing sales gains over last year. A recent reversal in mortgage policies should better position the market for a turnaround.

Existing home sales – including single-family, townhomes, condominiums and co-ops – declined 1.0 percent to a seasonally adjusted annual rate 1 of 4.89 million units in April from an upwardly pace of 4.94 million in March, and are 17.5 percent below the 5.93 million-unit level in April 2007.

NAR President Richard F. Gaylord, a broker with RE/MAX Real Estate Specialists in Long Beach, Calif., said the good news is that mortgage restrictions have just been eased. “In the past week, Freddie Mac and Fannie Mae announced that they were eliminating their ‘declining market’ policies, effective June 1,” he said. “This means consumers across the country will have access to safe, affordable financing with downpayments of only 5 percent on most mortgages, with 100 percent financing available on some loan products, and we could see an upturn in home sales this summer.”

Lawrence Yun, NAR chief economist, said eliminating restrictive policies should be a big help to home buyers. “I would encourage buyers who were disappointed by poor mortgage options to take another look at the market because the lending changes are significant,” he said. “Also, a recent notable drop in interest rates on conforming jumbo loans will help consumers in high-cost markets like California and New York.”

The unusual mix of market conditions around the country continues, but areas showing healthy price gains include Greenville, S.C., and Springfield, Mo., both with solid local economies. “On the other hand, some markets like San Diego, Calif., and Fort Myers, Fla., are experiencing rising sales after sudden double-digit drops in local home prices, so lower prices and low interest rates are starting to generate results,” Yun said.

The national median existing home price for all housing types was $202,300 in April, which is 8.0 percent below a year ago when the median was $219,900. Because the slowdown in sales from a year ago is greatest in high-cost areas, there is a downward distortion to the national median with relatively more sales in low and moderate priced markets.

Total housing inventory at the end of April rose 10.5 percent to 4.55 million existing homes available for sale, which represents an 11.2 month supply at the current sales pace, up from a 10.0 month supply in March.

According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage slipped to 5.92 percent in April from 5.97 percent in March; the rate was 6.18 percent in April 2007.

Single-family home sales slipped 0.5 percent to a seasonally adjusted annual rate of 4.34 million in April from 4.36 million in March, and are 16.1 percent below the 5.17 million-unit level recorded one year ago. The median existing single-family home price was $200,700 in April, down 8.5 percent from April 2007.

Existing condominium and co-op sales fell 5.2 percent to a seasonally adjusted annual rate of 550,000 units in April from 580,000 in March, and are 27.9 percent below the 763,000-unit pace in April 2007. The median existing condo price4 was $214,900 in April, which is 3.7 percent below a year ago.

Regionally, existing-home sales in the West rose 6.4 percent in April to a level of 1.00 million but are 15.3 percent below a year ago. The median price in the West was $285,700, which is 16.7 percent lower than April 2007.

In the South, existing-home sales were unchanged from March at an annual rate of 1.92 million in April, but are 18.6 percent below April 2007. The median price in the South was $170,800, down 5.1 percent from a year ago.

Existing-home sales in the Northeast fell 4.4 percent to an annual pace of 870,000 in April, and are 14.7 percent below a year ago. The median price in the Northeast was $262,000, which is 7.7 percent below April 2007.

In the Midwest, existing-home sales were at an annual rate of 1.10 million in April, which is 6.0 below March and 19.7 percent lower than April 2007. The median price in the Midwest was $159,100, down 2.9 percent from April 2007.