Orlando Condo Sales Decline Much Worse Than Homes

According to the most recent Orlando MSA statistics, the condo market is much worse here than the market for single family homes. The sale of condos dropped 63% in the past twelve months while the sale of single family homes have dropped only 43%. Don’t get me wrong they’re both bad but you can’t say condos aren’t worse off. The condo market in Orlando is also worse than the rest of the state of Florida. Condo sales have only declined 27% in the same period for the state as a whole. Perhaps the reason for this disparity is that Orlando drew in a lot more investors during the boom years between 2003-2006.

I can definitely attest to the fact that many of the condos for sale these days are vacant and investor owned.

August Real Estate Market Numbers Orlando

The latest real estate market numbers released today by the Orlando Regional Realtor Association reveal a rising inventory and mortgage rates alongside declining values and number of sales in Central Florida. The inventory as of the end of August stands at 26,313 homes on the market and average mortgage rates have jumped 40 basis points in the past 12 months to 6.6% vs. 6.2% 12 months ago. The median price has dropped from $250,000 12 months ago to $245,000 at the end of August. The more alarming number is that the number of sales sales have dropped more than 40% than a year ago. August 2006 recorded 2,249 sales while August 2007 sales were a mere 1,343. The inventory based on sales in the Orlando market is 19 months of supply. Jeepers Batman, that’s a lot of homes on the market. You can click on the thumbnails below to view a graphical picture of these stats.

Hovnanian Reports $80.5 Million Dollar Loss

The large national home building company Hovnanian reported a $80.5 million dollar loss for the third quarter of 2007. The president of the company, Ara K. Hovnanian, stated he expects the challenges in the housing market to persist throughout 2008. He attributes this decline to the tightening to the credit market reducing the number of qualified buyers, high inventory levels in many of the markets, and the psychology of the buyer being impacted by all the news & media coverage about the rate of foreclosures and mortgage availability. He also goes on to comment that the credit tightening of lenders has impacted the jumbo loan market since the beginning of the third quarter 2007.

Home Prices See Worst Decline Ever Recorded by the S&P’s Case Schiller Index

Home prices fell 3.2% in the second quarter of 2007 when compared to the same period in 2006. 15 out of the 20 cities tracked by Case Schiller saw declines. This decline for the nation is the largest ever recorded by the Case Schiller index in its 20 year history.For us in Central Florida, Tampa saw the second worst decline at 7.7% meaning we’re basically the worst market in the nation. Yikes! Another way to look at this situation is that it is a great time to buy at the bottom of the market. You can’t ever figure out the exact bottom but we’ve gotta be getting close.

What is more worrisome is that these figures ended in July before we really started hearing about the sub prime crisis with consumers. My guess it that the numbers will be even worse for this reason in Q3 and we’ll end up at levels similar to the real estate market following the savings & loan crisis in the early 90’s. Here is the link to the full report from Standard & Poor’s Case Schiller index.

NY Times online published an article by Robert Shiller entitled “A Time for Bold Thinking on Housing” that’s one of the best assessments of the current housing market.

Supply of Homes Reach a 16 Year High

Uugh! Home inventories are at its highest level since October of 1991 and sales levels are at its slowest pace in 5 years according to a report released today by the National Association of Realtors. We’re starting to see some similarities with the savings & loan scandal in 1989 that rocked the real estate market until about 1995. Busch was our president and lending institutions were going under left and right. Today, we still have a Busch as president and numerous mortgage companies are closing its doors. You can get a really good synopsis of the S&L scandal HERE to realize how many similarities there actually are.

Currently there are 4.59 million homes and condos for sale which represents a 9 month supply. What’s notable about this report is that the inventory of condos have been rising much more quickly than inventories of single family homes. While the inventory of single family homes rose 5%, condo inventory rose 20%. The entire report from the National Association of Realtors can be downloaded HERE.

Finally Some Good News about Housing

Woohoo! The sale of new single family homes rose 2.8% in July according to the Commerce Department today. Although this is probably the only good news about the real estate market in ages builders are still scaling back on their new projects so the bulls for housing are not running yet. According to the same report the supply of new homes is the lowest its been since January of 2006 and that there are 7.5 months of supply of new homes on the market. My guess is that the next report will show a slowing market but heck I’m glad we’re hearing some good news and hope for a turnaround or at least a stable market. You can download the entire report at www.census.gov/const/newressales.pdf

Real Estate Market Numbers for Celebration Florida

Celebration has seen an incredible rise in supply of homes alongside diminishing demand during the period between May 2006 and July 2007. Inventory has increased from 1,100 to 1,411 homes on the market in the past 15 months. There are 42.8 months of inventory based on home sale numbers and 28.2 months of inventory based on pending sale numbers. Either way, the numbers are much worse than the Orlando MSA. 85 properties sold in Celebration in May 2006 and only 33 properties sold in July of 2007. The average days on market increased 27% during the same period. The sale of condos were much weaker than single family homes just as in the rest of the region. The recent drop of the fed funds rate should help thing turn around but the supply needs to come down quite a bit for any significant changes to happen. Click this link to the National Association of Realtors forecast for 2008.

Real Estate Market Numbers for 32819 Zip Code: Dr. Phillips

Properties are taking longer to sell due to an oversupply and falling demand. As of July 7, 2007 the zip code which encompasses Bay Hill and the Sand Lake Road area has doubled in inventory of homes for sale with the number of homes selling declining at the same time. As a result there are 24 months of inventory on the market and the average price per foot has shown declining as well. The average days on market has also increased by 25% in the past year. It’s a great time to buy in this zip code as the National Association of Realtors predicts a rebound in 2008.

Real Estate Market Numbers for 32836 Zip Code: Dr. Phillips

Currently in this exclusive zip code, there are more than 18 months of inventory on the market and 64% more homes on the market than 12 months ago as of July 7, 2007. The statistics for avg. price per square foot has been volatile in the past year so this is probably not the best measure of a property’s value in this zip code. The number of sales have declined alongside a ballooning inventory. Single family homes accounted for most of the sales in this period and townhomes/condos struggled to sell in this period. So when will the market change for the better? The National Association of Realtors predicts a rebound in 2008.

Standard & Poor’s Case-Schiller Home Price Index

The Case-Schiller Home Price Index is a quarterly report that reflects the state of the residential housing market in 20 metropolitan regions across the United States. It is the most relied upon index to gauge the state of the real estate market as a whole but keep in mind that real estate markets are extremely localized and that the micro view will give a much more accurate picture. For example, many cities in the northeast are still seeing rising markets while the rest of the country has declined and numerous mortgage companies are shutting its doors. It’s still location, location, location and a little bit about the market conditions. You can download these quarterly reports for free at the Standard & Poor’s Case-Schiller Website.

On November 25, 2007, NY Times online published an article by Robert Shiller entitled “A Time for Bold Thinking on Housing” that’s one of the best assessments of the current housing market.