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Rising prices, minimal inventory challenge buyers during spring home-buying season

Wednesday, May 15, 2013  
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Orlando traditionally experiences its biggest home-buying rush in the spring, but this year buyers are challenged by the double whammy of double-digit home price increases and a depleted inventory.

The median price of existing homes sold in Orlando during the month of April leapt nearly 24 percent under the influence of bidding wars, above-price offers, and rising listing prices, reports the Orlando Regional REALTOR® Association.

"Despite a 46 percent increase in the number of "normal” homes coming on to the market in April — which indicates that more homeowners are seeking to take advantage of the current sellers’ market — buyer demand is continuing to outweigh supply,” explains ORRA Chairman Steve Merchant, broker-owner of Global Realty International. "Buyer competition is so stiff that more than one in four of the homes that closed during April sold for more than original listing price.”

The April 2013 overall median price of $145,000 is 23.93 percent above that of April 2012 ($117,000) and 3.57 percent above that of March 2013 ($140,000). Orlando’s median price has risen more than 34 percent in the 16 months since January of 2012.

In addition to the overall median increase, each individual sales type experienced a year-to-year median price increase in April, with short sales leading the way with a 20.53 percent jump. The median price of foreclosures increased 12.25 percent; the median price of normal sales increased 10.56 percent.

Completed Sales

Members of ORRA participated in the sales of 2,689 homes (all types combined) that closed in April 2013, an increase of 10.39 percent compared to April 2012 and a decrease of 0.77 percent compared to March 2013.

Single-family home sales increased 15.00 percent in April 2013 compared to April 2012, while condo sales decreased 10.49 percent.

Compared to April of 2012, the number of short sales (570) decreased 20.17 percent and the number of foreclosures (553) decreased 10.37 percent. The number of completed traditional sales (1,566), however, is a 41.72 percent increase compared to last year.

In April, short sales and foreclosures made up 41.76 percent of the entire sales pie, while normal sales made up 58.24 percent. Last year in April, those percentages were 54.64 percent and 45.36 percent, respectively.

Homes of all types spent an average of 76 days on the market before coming under contract in April 2013, and the average home sold for 96.85 percent of its listing price. In April 2012 those numbers were 87 days and 95.46 percent, respectively.

The average interest rate paid by Orlando homebuyers in April was 3.49 percent. Last month, homebuyers paid an average interest rate of 3.65 percent; this month last year, homebuyers paid an average interest rate of 4.03 percent.

Pending Sales

Pending sales – those under contract and awaiting closing – are currently at 8,785. The number of pending sales in April 2013 is 12.83 percent lower than it was in April 2012 (10,078) and 0.16 percent lower than it was in March 2013 (8,799).

Short sales, which take much longer to process from contract to close, made up 59.10 percent of pending sales in April 2013. Normal properties accounted for 28.84 percent of pendings, while bank-owned properties accounted for 12.05 percent.

Inventory

The number of existing homes (all types combined) available for purchase in Orlando is 16.66 percent below that of April 2012 and now rests at 7,202. Inventory did increase by 265 properties over last month.

The inventory of single-family homes is down by 20.43 percent when compared to April of 2012, while condo inventory has decreased by 3.06 percent.

Current inventory combined with the current pace of sales created a 2.68-month supply of homes in Orlando in April. There was a 3.55-month supply in April 2012 and a 2.56-month supply last month.

Affordability

The April affordability index is 220.37 percent, a slight decrease of 3 percentage points from March’s index of 223.58. (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 $55,043 can qualify to purchase one of 3,750 homes in Orange and Seminole counties currently listed in the local multiple listing service for $319,531 or less.

First-time homebuyer affordability in April decreased to 156.70 percent from last month’s 158.99 percent. First-time buyers who earn the reported median income of $37,429 can qualify to purchase one of the 2,597 homes in Orange and Seminole counties currently listed in the local multiple listing service for $193,139 or less.

Condos and Town Homes/Duplexes/Villas

The sales of condos in the Orlando were down 10.49 percent in April, with 401 sales recorded in April 2013 compared to 448 in April 2012.

The most (90) condos in a single price category that changed hands in April were yet again in the $1 - $50,000 price range and accounted for 22.44 percent of all condo sales.

Orlando homebuyers purchased 272 duplexes, town homes, and villas in April 2013, which is a 15.74 percent increase compared to April 2012. Most (33) fell within the $100,000 - $120,000 price range category.

MSA Numbers

Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in April were up by 8.34 percent when compared to April of 2012. Throughout the MSA, 3,247 homes were sold in April 2013 compared with 2,997 in April 2012. To date, sales throughout the MSA are 8.96 percent above this time last year.

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

  • Lake: 27.23 percent above April 2012 (514 homes sold in April 2013 compared to 404 in April 2012);
  • Orange: 6.93 percent above April 2012 (1,604 homes sold in April 2013 compared to 1,500 in April 2012);
  • Osceola: 0.59 percent below April 2012 (507 homes sold in April 2013 compared to 510 in April 2012); and
  • Seminole: 6.69 percent above April 2012 (622 sold in April 2013 compared to 583 in April 2012).

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.

ORRA REALTOR® sales, referred to as the core market, represent all sales by members of the Orlando Regional REALTOR® Association, not necessarily those sales strictly in Orange and Seminole counties. Note that statistics released each month may be revised in the future as new data is received.

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.


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