Orlando median home price increases 6 percent; foreclosure sales leap 30 percent
Monday, September 15, 2014
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Orlando home sales declined in August while the area’s median price continued its upward trend, albeit at a slower pace, reports the Orlando Regional REALTOR® Association.
According to ORRA Chairman Zola Szerences, RE/MAX Central Realty, the relative slowdown in median price increase can be attributed in part to a significant uptick in foreclosure sales. “Closings on foreclosures jumped 30 percent in August,” explains Szerencses. “Foreclosures tend to carry discounted price tags — great opportunities for buyers — so the cumulative effect of all these sales is a restraint on the median price.”
The overall median price for August is $165,000, a 6.45 percent increase over August 2013 and a 3.48 percent decrease compared to last month. Orlando’s overall median price has now recorded year-to-year gains for 38 consecutive months and has risen 42.86 percent since July 2011.
Short sales experienced the greatest jump in median price increase in August, coming in at 25.98 percent higher than in August 2013. The median for normal sales increased 5.56 percent, while that for foreclosures increased 9.00 percent.
The median price of single-family homes increased 6.05 percent when compared to August of last year, and the median price of condos increased 1.30 percent.
Members of ORRA participated in the sales of 2,449 homes (all home types and all sale types combined) that closed in August 2014, a decrease of 15.55 percent compared to August 2013 and a decrease of 3.66 percent compared to July 2014.
Szerencses says the decline in sales can be partly explained by a lag between gains in median family income and gains in median home price. “In addition, the first-time homebuyers who are so crucial to the market are still struggling with competition from cash buyers, plus difficulties in saving a down payment and in access to financing.”
Closing of foreclosures in Orlando increased by 30.10 percent in when compared to August 2013. “Normal” home sales in Orlando decreased by 14.25 percent when compared to August 2013 and made up 67.09 percent of the sales pie. Closings of short sales decreased by 64.93 percent.
Single-family home sales decreased 13.12 percent in August 2014 compared to August 2013, while condo sales decreased 16.41 percent. Compared to last month, single-family home sales decreased 5.98 percent and condo sales increased 6.43 percent.
Homes of all types spent an average of 68 days on the market before coming under contract in August 2014, and the average home sold for 96.82 percent of its listing price. In August 2013 those numbers were 67 days and 96.95 percent, respectively.
The average interest rate paid by Orlando homebuyers in August - 4.16 percent – decreased a fraction from July’s 4.17 percent. In August of last year, homebuyers paid an average interest rate of 4.64 percent.
Pending sales – those under contract and awaiting closing – are currently at 6,507. The number of pending sales in August 2014 is 13.46 percent lower than it was in August 2013 (7,519), and 3.86 percent lower than it was in July 2014 (6,768).
Short sales made up 34.44 percent of pending sales in August 2014. Normal properties accounted for 41.68 percent of pendings, while bank-owned properties accounted for 23.88 percent.
The number of existing homes (all sales types and all home types combined) that were available for purchase in August is 52.57 percent above that of August 2013 and now rests at 13,084. Inventory increased in number by 991 properties over last month.
The inventory of foreclosure sales increased by 86.39 percent in August 2014 compared to August 2013. The inventory of normal sales and short sales increased by 56.81 percent and 6.65 percent respectively.
The inventory of single-family homes is up by up by 55.25 percent when compared to August of 2013, while condo inventory is up by 37.23 percent. The inventory of duplexes, townhomes, and villas is up by 56.25 percent.
Current inventory combined with the current pace of sales created a 5.34-month supply of homes in Orlando for August. There was a 2.96-month supply in August 2013 and a 4.76-month supply last month.
The August affordability index is 181.44 percent, an increase from July’s index of 174.80. (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 $55,955 can qualify to purchase one of 6,117 homes in Orange and Seminole counties currently listed in the local multiple listing service for $299,369 or less.
First-time homebuyer affordability in August increased to 129.02 percent from last month’s 124.30 percent. First-time buyers who earn the reported median income of $38,049 can qualify to purchase one of the 3,532 homes in Orange and Seminole counties currently listed in the local multiple listing service for $180,952 or less.
Condos and Town Homes/Duplexes/Villas
The sales of condos in the Orlando area were down 16.41 percent in August, with 331 sales recorded in August 2014 compared to 396 in August 2013.
Orlando homebuyers purchased 217 duplexes, town homes, and villas in August 2014, which is a 31.33 percent decrease compared to the 316 purchased in August 2013.
Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in August were down by 6.99 percent when compared to August of 2013. Throughout the MSA, 3,209 homes were sold in August 2014 compared with 3,450 in August 2013. To date, MSA sales are down 4.52 percent.
*Each individual county’s monthly sales comparisons are as follows:
• Lake: 6.12 percent above August 2013;
• Orange: 7.39 percent below August 2013;
• Osceola: 17.59 percent below August 2013; and
• Seminole: 6.72 percent below August 2013.
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.