Prices for Homes in Orlando See Steeper Price Declines than the Rest of the Florida Housing Market

Statewide sales of existing single-family homes and condominiums continued to slide, as did the home values, the Florida Association of Realtors reported Wednesday.

Existing Florida single-family homes sales totaled 12,954 in June, a 30 percent decrease from the 18,607 homes sold in June 2006. Florida condo sales, meanwhile, fell by 28 percent, from 5,532 in June 2006 to 4,004 in June of this year.

Florida’s median sales price for existing single-family homes dropped by 5 percent last month, from $256,200 in June of last year to $243,200 last month. The median is the midpoint; half the homes sold for more, half for less.

But sales in the Orlando area saw a steeper decline. The Orlando market saw existing single-family home sales drop by 43 percent, from 2,800 in June 2006 to 1,595 last month. Existing condo sales plummeted by 63 percent – from 502 to 188 — between June of last year and this year.

Median sales prices, meanwhile, saw a 3 percent decrease, as existing single-family homes went from $266,300 last June to $258,100 this June, and existing condo prices slid from $161,600 to $156,900 in the same period.

The state and the Orlando market are both still reporting significantly fewer home sales than the rest of the United States, according to the latest National Association of Realtors report. Nationwide total home sales declined 11 percent, from 6.49 million in June 2006 to 5.75 million last month.

The national median existing-home price in June, meanwhile, was $230,100, a slight increase from June 2006’s $229,300.

Real Estate Activity by Price Range in Orlando

So which price ranges have been seeing the most activity in the Orlando real estate market? For single family homes the price range with the most activity are $200,000 to $500,000. For condos the most active price range is between $140,000 and $300,000. For townhomes the range is $160,000 - $300,000. For a complete list of all the stats posted by the Orlando Regional Realtor Association for this category please click on on the pdf attachment on this post. Orlando Housing Stats by Price Range

Median home price rises to $253,000 in July according to the Orlando Regional Realtor Assocation Data

The median price of a home purchased in Orlando in June of this year increased to $253,000, a 1.61 percent increase over June 2006’s median price of $249,000. (Last month, the median price rose to $250,000 after experiencing a drop in April to $242,100.) In addition the latest data revealed that inventory growth slowed from 1,028 in May to 460 in June.The number of sales in the Orlando area declined by 49.63 percent in June 2007 when compared to June of last year (1,431 to 2,841). The number of sales that took place in June 2007 also declined over the number of sales that occurred in May 2007 (1,745).

Year-to-date sales for 2007 (9,495 through June) are down by 37.59 percent over the same period in 2006 (15,214). The Orlando Housing Affordability Index and the First-time Homebuyers Affordability Index both dipped in June: the prior from 89.0 percent in May to 83.8 percent in Juneand the latter from 63.3 percent in May to 59.6 percent. An affordability index of 83.8 percent means that buyers earning the state-reported median income are 16.2 percent short of the income necessary to purchase a median-priced home.

The area’s average interest rate of 6.40 percent, a tick above last month’s rate of 5.94 percent, is nearly identical to the June 2006 average interest rate of 6.45 percent

Inventory

The inventory of homes available for purchase through the MLS increased by just 460 homes in June 2007 (compared to a 1,028 increase in May) to a total of 25,923, which equates to a 40.6 percent increase over June 2006’s number of 18,437. The inventory level reflects a 18.12-month supply at the current pace of sales.

There are 4,398 condos in the multiple listing service, the majority of which (826) fall into the $200,000 - $250,000 price range. The inventory tally for duplexes, townhomes, and villas sits at 2,233; most (595) are also priced between $200,000 and $250,000.

Homes of all types spent an average of 97 days on the market before being sold; and the average home sold for 94.97 percent of its original asking price.

Condos and Townhomes/Duplexes/Villas

The sales of condos in the Orlando area declined by 68 percent in June; a total of 161 condos changed hands in June 2007 compared to 509 in June 2006. In a month-to-month comparison, June 2007 condo sales decreased from May 2007 (161 to 189). Most condos (34) that changed hands in June 2007 were sold for between $140,000 and $160,000. Year-to-date condo sales are down by 55 percent (1,308 condos have been sold so far in 2007 compared to 2,885 by this time last year).

Orlando homebuyers purchased 108 duplexes, townhomes, and villas in June 2007, which is a 53 percent decline over June 2006 when 232 of these alternative housing types were purchased. Duplex, townhome, and villa sales in June 2007 were nearly equal to that in May 2007 (154). The majority (35) of duplexes, townhomes, and villas sold in June 2007 cost between $200,000 and $250,000.

MSA Numbers

Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in June were down by 49.4 percent when compared to June of last year. Throughout the entire MSA, 1,728 homes were sold in June 2007 compared with 3,417 in June 2006. To date, 11,361 homes have been sold this year while 18,592 homes had been sold as of this time last year (a 38.9 percent decline).

Seminole County’s June 2007 sales dropped 43.1 percent below that of June 2006 (407 to 715), while Orange County fell 50.8 percent (828 to 1,684). Lake County saw a 44.5 percent decline in the number of sales in June 2007 compared to June 2006 (263 to 474), and Osceola County experienced a 57.7 percent drop (230 to 544).

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

Lake: 34.0 percent below 2006 (1,711 homes sold in 2007 compared to 2,591 in 2006);
Orange: 39.6 percent below 2006 (5,696 homes sold in 2007 compared to 9,425 in 2006);
Osceola: 46.3 percent below 2006 (1,546 homes sold in 2007 compared to 2,879 in 2006); and
Seminole: 34.9 percent below 2006 (2,408 homes sold in 2007 compared to 3,697 in 2006).

Foreclosures drift to Sun Belt from Rust Belt according to CNN June 19, 2007

For sheer volume, housing foreclosures across the nation appear to be moving from the Rust Belt to the Sun Belt.

A study for CNNMoney.com by RealtyTrac, an online marketer of foreclosure properties, showed that 139 of California’s ZIP codes fell within the top 500 for total foreclosure filings in the United States. The next highest count for any state is less than half that at 72 and is in another sun-belt state - Florida.

The geographic shift shows up in the mix of properties listed by the auction web site RealtyBid.com, which mainly features foreclosed homes.

RealtyBid spokeswoman, Daphne Shannon, said, “The Midwest has always been very solid for us, but the properties we’re seeing are moving across the country - they’re from California, Arizona and Nevada.”

The three stages of foreclosures

The number one ZIP code in the nation for foreclosures is still, however, in the Rust Belt. It’s Cleveland, 44105, with a total of 784 filings during the three months ended June 15, according to the RealtyTrac study.

The hardest hit ZIP in California was Sacramento, 95823, where there were 634 default notices, repossessions and auction notices. It had the sixth most foreclosure filings for any zip code in the nation.

California boasts a vibrant economy and a fast growing population. According to Doug Duncan, chief economist for the Mortgage Bankers Association (MBA), foreclosures, overwhelmingly, used to come courtesy of serious underlying economic problems such as job layoffs or plant closings.

But the California foreclosure spike, as well as those in Florida, Arizona and Nevada, was set up by runaway appreciation that boosted home prices beyond affordability.

Double-digit price increases had attracted hordes of investors, who added to swiftly rising values. Developers bid up land prices in a scramble to get product to market. When markets cooled, speculators added to downward price pressure by unloading their properties onto already lengthening inventories.

“In many of these markets,” said Duncan, “prices fell below what investors paid. Many have simply walked into their banks’ offices and handed in their keys.”

Many Sun-Belt buyers bought their high-priced houses using 2/28 adjustable rate mortgages (ARMs) which featured very low initial, or “teaser,” rates that reset much higher after the first two years of fixed payments.

But ARMs are best used, according to Duncan, as credit-repair products. They’re set up for borrowers to show they can keep up mortgage payments and then refinance out into affordable fixed-rate loans after two years.

Many buyers used ARMs to get into a house with little regard for whether they could afford the payments, betting that rising prices could build enough home equity they could tap for cash.

When prices stabilized or fell, that safety valve disappeared. Owners couldn’t pay monthly bills, and they had no equity to draw on.

Housing: Not out of the woods, yet

In the Rust Belt, it was the ripple effects of a dying industrial economy instead of rampant speculation that crushed the finances of many borrowers in states like Michigan, Ohio and Indiana.

Neighborhoods of Cleveland 44105 were once filled with Eastern European immigrants and their descendents. Residents worked in nearby woolen factories and steel mills.

Today it’s a mixed-race area with lower than average income, higher than average unemployment and a large stock of older, single-family homes. Many of them sell for less than $100,000, some for under $30,000.

According to Cleveland city councilman, Tony Branchatelli, who represents the district, more than 600 homes in the neighborhood are vacant and boarded up. Many have little value because the rehabilitation costs would exceed their selling prices. Some have had their plumbing, wiring and other hardware stripped.

bargain hunting for condos

In Sacramento, 95823, by contrast, residents depend more on government jobs and service industries for employment, although wages are still below average for the state.

Homes there are more modern and more valuable than in 44105; even modest three-bed/two bath houses go for several hundred thousand dollars.

Neither the Rust Belt nor Sun Belt are likely to see easier conditions any time soon. In the Sun Belt, the subprime mortgage mess will take many months to work through as the many borrowers who took out 2/28 and 3/27 ARMs during 2005 and 2006 will hit their reset points this year and next.

And the rust belt appears likely to endure more economic trouble before conditions turn around in heavy industry.

“Delinquencies,” said Duncan, “will probably peak by the end of the year and foreclosures in 2008.” 

Orlando Real Estate Makes S&P List of Top 50 Markets for Dropping Values in the Next 2 Years

A new report projects home-price declines for the next two years. The riskiest markets are in Florida, California, Nevada and Arizona. Here’s how to ride out the hard times.

As if the housing market isn’t bleak enough. The Standard & Poor’s Schiller Case Home Price Index reported in late June that home prices dropped more in the first quarter of this year than at any other quarter in the last 17 years. Now, a report from PMI Mortgage Insurance says home values could decline across much of the country for at least two more years.

There’s a 34.6% chance on average that home prices will drop in the nation’s top 50 markets in the next couple of years, according to PMI Mortgage Insurance’s new U.S. Market Risk Index, which heavily factors in recent price volatility.

How far and how fast prices actually fall remains to be seen. But the report underscores the fact that today’s market is decidedly different from that of recent years, when homeowners could bank on rapid home-value appreciation.

Not surprisingly, the riskiest markets identified by the index are located in areas that saw rapid price appreciation, a reduction in affordability followed by a rapid decrease in the rate of price appreciation. Of the 15 biggest cities with the greatest risk for price decline — with more than a 50% chance of lower home values by mid-2009 — five were in California and four were in Florida.

At the highest end of the spectrum, the following major markets all have a greater than 60% chance of declines, according to PMI:

• Riverside-San Bernardino-Ontario, Calif. (65.2%);

• Phoenix-Mesa-Scottsdale, Ariz. (64.6%);

• Las Vegas-Paradise, Nev. (61.4%);

• West Palm Beach-Boca Raton-Boynton Beach, Fla. (60.7%).

“There’s no question that our housing prices are declining here,” says Jay Thompson, an agent with Century 21 Aware near Phoenix. “Our appreciation rate was 54% average at one point in mid-2005-2006, so it is no surprise to anybody here … that prices were going to go down.”The inventory numbers tell the story: In January 2005, Thompson’s multiple listing service showed 3,500 homes for sale. Today: about 54,000.

The next-riskiest top 50 metro areas on the PMI index, with a 50% or greater chance of dropping values in two years, are:

• Los Angeles-Long Beach-Glendale, Calif. (58.6%);

• Santa Ana-Anaheim-Irvine, Calif. (57.7%);

• Oakland-Fremont-Hayward, Calif. (57.2%);

• Orlando-Kissimmee, Fla. (56.3%);

• Sacramento-Arden-Arcade-Roseville, Calif. (56.0%);

• San Diego-Carlsbad-San Marcos, Calif. (55.5%);

• Fort Lauderdale-Pompano Beach-Deerfield Beach, Fla. (54.2%);

• Miami-Miami Beach-Kendall, Fla. (52.4%);

• Tampa-St. Petersburg-Clearwater, Fla. (50.6%);

• Boston-Quincy, Mass. (50.1%)

• Washington, D.C.-Arlington-Alexandria, Va.-W.Va. (50%).

What does all this mean to buyers and sellers? In short, says one agent, forget what you thought you knew about real estate.

For buyers

• Consider whether and where to leap. For buyers, the changing market may mean it’s time to think about buying if homeownership previously was too costly. “Yes, there are affordability problems in California, the Southwest and Florida,” says PMI’s Milner. “But there are also huge swaths of the country where housing is still very affordable, and in some cases more affordable (in percentage of income spent on housing) than it was 10 years ago.” The most affordable regions are the South and Midwest. Just be certain you can weather the storm if home values drop after you buy.

• Realize it’s a home, not a cash machine. Think of your home as a place to live, not as a way to make quick money. “Instead of a stock, which is just a piece of paper, you get to consume shelter,” says Milner. Your home probably will appreciate, but slowly. Historically, homes appreciate at a rate of about 4% to 6% a year, on average, over any given 10-year period, he says.

• Choose a mortgage by interest rate, not payment amount. Proceed cautiously when shopping for a mortgage. Consider a traditional fixed-rate loan so you’ll know exactly what your payment will be for the entire life of the loan. You may find adjustable-rate mortgages (ARM) with lower payments that later adjust up, but don’t gamble that you can make a higher payment when the introductory period is over or when interest rates rise, as they are likely to do.

• Don’t bet on house appreciation. Don’t make financial plans or take on debts that bank on the near-term rising value of real estate. In the post-bubble world, the risk to your financial stability is just too great. A number of the 176,137 foreclosures filed in May — a 90% increase from last year at this time, according to RealtyTrac — were by borrowers who’d gambled they could refinance a risky mortgage once their home had appreciated. Buyers “are going to need to be very prudent because they are not going to be bailed out by an appreciating home,” says Milner.

For sellers

• Sweeten a sale by helping a buyer with closing costs. Potential buyers may be sitting on the sidelines because, although they can make monthly payments, they haven’t got a down payment saved up, says Steven Schafer, an agent with Boca Executive Realty in Boca Raton, Fla., one of the riskiest markets identified by the PMI study. Consider contributing up to 3% of closing costs. (Just be aware that states and lenders often limit seller contributions.)

• Exploit the Internet. Open houses, while still an important sales tool, are being eclipsed by the Internet. Buyers now use Web research to learn what’s for sale locally before stepping a foot out of their homes. With scads of homes on the market, you must figure out how to distinguish your home from others like it on the Internet. Schafer and Thompson, the Phoenix-area agents, create a Web site for each house they represent, usually using the home’s address as the site address. If your agent can’t register the link for you, do it yourself. You can also set up a Web page yourself with a modicum of computer skills or pay a Web site creation company to do it for around $30, says Schafer.

• Load your listing with pictures. Schafer advises “visually communicating” with buyers by choosing an agent with an outstanding Web site and contributing plenty of great photos of the house.

• Use a “virtual” tour. Sophisticated real-estate sites use panoramic photo features or streaming video so buyers can get a 360-degree view of the property from a single vantage. With virtual tours, buyers in other states and other countries can get a good feel for your home without actually stepping foot inside.

Just remember, even this tough market will pass. Time is needed for wages to catch up to prices so more people can afford to buy homes. “It takes time to adjust back to affordability,” says PMI’s economist Henry.