Orlando median price rises as home sales slow in July

The median price of Orlando homes sold during the month of July increased almost 7 percent while sales decreased 0.2 percent compared to July 2016, reports the Orlando Regional REALTOR® Association. Inventory continued its year-over-year slide.

Orlando’s overall median home price (all home types combined) is $220,000, which is 6.8 percent above the July 2016 median price of $206,000. Year-over-year increases in median price have been recorded for the past 72 consecutive months; as of July 2017, the overall median price has more than doubled since July 2010.

The median price for single-family homes that changed hands in July increased 4.7 percent over July 2016 and is now $240,000. The median price for condos increased 21.0 percent to $115,000.

The overall average home price for July 2017 is $263,877, an increase of 8.3 percent over the average home price in July 2016. The average home listed for $271,002 in July and sold for 97.4 percent of its listing price (97.3 percent in July 2016).

Sales 

Members of ORRA participated in 3,347 sales of all home types combined in July, which is 0.2 percent less than the 3,353 sales in July 2016 and 13.8 percent less than the 3,882 sales in June 2017.

ORRA President Bruce Elliott, Regal R.E. Professionals LLC, explains that demand for homes is strong, but the supply of homes, especially those under $250,000, remains low.

“Would-be first-time homebuyers are being kept on the sidelines by limited inventory and rising prices,” says Elliott. “However, rising prices have slowed some of the investor activity, which could mean slightly less competition for homes at the lower end of the market.”

Sales of single-family homes (2,634) in July 2017 decreased by 0.9 percent compared to July 2016, while condo sales (383) increased 6.1 percent.

Sales of distressed homes (foreclosures and short sales) reached only 202 in July and is 46.0 percent less than in July 2016. Distressed sales made up 6.0 percent of all Orlando-area transactions last month.

The average interest rate paid by Orlando homebuyers in July was 4.01 percent, up from 3.98 percent the month prior.

The overall inventory of homes that were available for purchase in July (9,051) represents a decrease of 15.0 percent when compared to July 2016, and a 1.0 percent decrease compared to last month. There were 13.3 percent fewer single family homes and 25.5 percent fewer condos.

Current inventory combined with the current pace of sales created a 2.7-month supply of homes in Orlando for July. There was a 3.2-month supply in July 2016 and a 2.4-month supply last month.

MSA Numbers

Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in July were down by 0.1 percent when compared to July of 2016. Year to date, MSA sales are up 5.2 percent

Each individual county’s sales comparisons are as follows:

•Lake: 12.2 percent above July 2016;
•Orange: 0.5 percent below July 2016;
•Osceola: 0.7 percent above July 2016; and
•Seminole: 8.7 percent below July 2016.

This representation is based in whole or in part on data supplied by the Orlando Regional REALTOR® Association and the My Florida Regional Multiple Listing Service. Neither the association nor MFRMLS guarantees or is in any way responsible for its accuracy. Data maintained by the association or MFRMLS may not reflect all real estate activity in the market. Due to late closings, an adjustment is necessary to record those closings posted after our reporting date.

Orlando MSA numbers reflect sales of homes located in Orange, Seminole, Osceola, and Lake counties by members of any REALTOR® association, not just members of ORRA.

ORLANDO, Fla. – Aug. 4, 2016 – “Are we experiencing a real estate bubble?” This is a question we’re being asked more and more by customers, investors, media and even our team members.

Dr. Lawrence Yun, chief economist for the National Association of Realtors^® doesn’t see a bubble at the present for three reasons:

1.A shortage of supply in both new and resale housing. Bubbles are usually the result of oversupply.

2.Interest rates are lower now than in the bubble years of the mid-2000s resulting in better affordability.

3.There is no sub-prime lending causing people who are unqualified to buy housing and then default.

But real estate markets are local and cyclical. A local market can experience a bubble while the national market is cruising along just fine. Even sub-markets such as condos, apartments, office or retail can experience bubbles within a strong overall real estate market.

Do you know how to forecast the real estate cycle in your market? There are four fundamentals you should be tracking. As a leader, you need to be the first to spot the changes so you can put your team and your customers in a position to exploit the inevitable. Here they are:

1.Employment. Employment is a leading indicator of a real estate market cycle by 12 to 18 months. This is your earliest warning signal of change. Contact your state employment office and get on their mailing list to receive the monthly employment numbers for your county (or go to their website). Watch for a change in employment (either up or down). Compare the number of people employed last month to the same month a year ago. Is the number rising or falling? This is your best crystal ball, giving you a 12- to 18-month head start.

2.Appreciation. Go to the government website www.fhfa.gov and download their quarterly “House Price Index” report. This is a long report (usually 75 pages), so scroll down to the charts that give you “House Price Appreciation by State” and 300 individual metropolitan markets. These charts show the house price appreciation for the last year, the last quarter, the last five years and since 1991. Want to see if a market is speeding up or slowing down? Take the quarterly change in prices for a market and annualize it (multiply times four). Then, compare this number to the annual price change. Some markets are seasonal, so be careful about jumping to conclusions based on just one quarter. Start tracking each quarter and you will spot the trends.

3.Affordability. The three components of affordability are house price, household income and interest rates. Ultimately, home prices and real estate activity are a function of people’s ability to pay. Track these components to see if the median household income can afford the median-priced home.

4.Supply and demand ratios. Tracking supply and demand for your various sub-markets will also give you a clue as to whether a sub-market is overheated and a bubble is building. Here are two examples: A six-month supply of homes is considered a balanced market. In our market right now, the price range under $400,000 has a 1.8-month supply (seller’s market) while the price range over $700,000 has a 13.3-month supply (buyer’s market). We have both a seller’s market and a buyer’s market at the same time depending on the price range. Here’s the second example: Apartments are experiencing a 1 percent vacancy rate and double-digit rent increases, making apartments one of the hottest segments. To get to a balanced market (5 percent vacancy) we need to add about 1,500 apartments in our market. There are currently 1,739 under construction with another 2,165 approved for construction. We see a bubble in apartments a year from now and are warning our investors.

Real estate is a cyclical industry. Knowing where you are in the market cycle is a critical skill. Track the four fundamentals, and you will keep your customers and your team out of bubble trouble.

© 2016 Real Trends

The year ended on a positive note. A 15 percent increase in annual sales and a 9 percent increase in median price. Prices are definitely moving up at a good rate.

The median price of all existing homes combined sold in December 2015 — $185,000 — is a 9.47 percent increase from the $169,000 median price recorded in December 2014, and a 0.54 percent increase compared to November 2015.

Each individual county’s monthly sales comparisons are as follows:

• Lake: 5.54 percent below December 2014;
• Orange: 1.61 percent below December 2014;
• Osceola: 11.91 percent below December 2014; and
• Seminole: 15.69 percent above December 2014.

Each county’s 2015 year-end sales comparisons are as follows:

• Lake: 8.93 percent above 2014;
• Orange: 15.58 percent above 2014;
• Osceola: 10.19 percent above 2014; and
• Seminole: 14.69 percent above 2014.

Overall, things are looking up for Real Estate in 2016 and considering the turmoil in the world with elections, oil crisis, stock market volatility, real estate is looking even better as an investment.