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Drop in foreclosures lifts overall median price up, but pulls overall sales numbers down

Thursday, February 16, 2012  
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For more information:
Laura Haag, ORRA Vice President of Marketing and Communications
407.513.7272 or
laurah@orlrealtor.com

A sharp decline in the sales of foreclosure homes contributed to a drop of 17.83 percent in Orlando's overall sales for January, despite increases in the number of both short sales and normal sales.

Foreclosure sales in January decreased by 57.61 percent when compared to January of 2011, while short sales increased 23.69 percent and normal sales increased 19.92 percent.

"The decrease in overall sales can also be attributed to a significant drop in condo sales, which are down 48.11 percent from January of last year,” says ORRA Chairman Stephen Baker, RE/MAX Central Realty. "Single-family homes, on the other hand, are down 5.26 percent.”

Members of the Orlando Regional REALTOR® Association participated in 1,677 home sales in January 2012. More than 36 percent of those were normal sales; short sales made up 37.98 percent and foreclosure sales made up 25.76 percent. By comparison, in January 2011 normal sales accounted for 24.84 percent while short sales accounted for 25.23 percent and foreclosures accounted for 49.93 percent.

The increase in short sales and normal sales — with the higher prices these sales types typically command — plus a nice increase in the median price of foreclosure sales, lifted Orlando’s overall median price 13.80 percent over that in January 2011 ($108,000 in January 2012 and $94,900 in January 2011).

However, the January 2012 overall median price is 9.24 percent lower than it was in December 2011. That decline is somewhat expected, says Baker. "There has been a five-year trend of median price decreases from December to January, starting back in December of 2007.”

The January 2012 median prices of both normal sales and short sales dropped in comparison to January 2011: normal sales by 2.10 percent (from $143,000 to $140,000) and short sales by 5.26 percent (from $95,000 to $90,000). The median price of foreclosure sales, however, increased by 13.33 percent in January 2012 (from $75,000 to $85,000).

The average interest rate paid by homebuyers in January was 4.01 percent. This rate average interest rate is just two-tenths of a percent higher than the rate in December 2011, which at 3.99 percent was the lowest since ORRA began tracking the statistic in January of 1995. A year ago, homebuyers paid an average interest rate of 4.84 percent.

Homes of all types spent an average of 96 days on the market before coming under contract in January 2012, and the average home sold for 95.19 percent of its listing price. In January 2011 those numbers were 96 days and 94.53 percent, respectively.

Pendings

Pending sales – those under contract and awaiting closing – are currently at 8,709. The number of pending sales in January 2012 is .77 percent lower than it was in January 2011 (8,777) and 7.58 percent higher than it was in December 2011 (8,095).

Short sales, which take much longer to process from contract to close, made up 71.99 percent of pending sales in January 2012. "Normal” properties accounted for 14.84 percent of pendings, while bank-owned properties accounted for 13.17 percent. In January 2011, short sales were 61.59 percent of all pendings while normal properties were 13.18 percent and bank-owned properties were 25.23 percent of the total.

Inventory

Current overall inventory (9,258) of homes for sale in Orlando is down 35.70 percent compared to January 2011, and down 4.87 percent compared to December 2011. Single-family home inventory is down 36.35 percent compared to January 2011, while current condo inventory is down 26.46 percent compared to January 2011.

At the current pace of sales, there is a 5.52-month supply of homes in Orlando’s inventory (down from a 7.05-month supply in January 2011 and up from a 4.40-month supply in December 2011).

Affordability

The drop in overall median price has led to an increase in Orlando’s affordability index: the January index of 273.32 percent is almost 23 percentage points higher than December 2011’s index of 250.44 percent. (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 $54,188 can qualify to purchase one of 5,600 homes in Orange and Seminole counties currently listed in the local multiple listing service for $295,188 or less. First-time homebuyer affordability in January increased to 194.36 percent from last month’s 178.09 percent.

First-time buyers who earn the reported median income of $36,848 can qualify to purchase one of the 4,113 homes in Orange and Seminole counties currently listed in the local multiple listing service for $178,425 or less.

Condos and Town Homes/Duplexes/Villas

The sales of condos in the Orlando area (275) decreased by 48.11 percent in January when compared to January of 2011 (530). The most (121) condos in a single price category that changed hands in January were yet again in the $1 - $50,000 price range and account for 44.00 percent of all condo sales. Orlando homebuyers purchased 160 duplexes, town homes, and villas in January 2011, which is a 20.00 percent decrease compared to January 2011. Most (25) fell within the $1 - $50,000 price range; this price range and the $100,000 - $120,000 price range shared the domination of sales in 2011.

MSA Numbers

Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in January were down by 19.67 percent when compared to January of 2011. Throughout the MSA, 2,087 homes were sold in January 2012 compared with 2,598 in January 2011.

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

  • Lake: 0.67 percent below January 2011 (297 homes sold in January 2012 compared to 299 in January 2011);
  • Orange: 24.47 percent below January 2011 (1,062 homes sold in January 2012 compared to 1,406 in January 2011);
  • Osceola: 28.12 percent below January 2011 (363 homes sold in January 2012 compared to 505 in January 2011); and
  • Seminole: 5.93 percent below January 2011 (365 sold in January 2012 compared to 388 in January 2011).

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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