December 2011 and Year-end Housing Market – Expanded Talking Points
Released January 16, 2012
*Orlando home sales (all home types combined) in December 2011 were down 13.86 percent over December 2010.
*Single-family home sales in the Orlando area decreased by 7.78 percent in December when compared to December of last year. Condo sales decreased by 35.62 percent; duplex, town home, and villa sales decreased by 9.44 percent.
*Of the 2,125 sales in December, 871 "normal” sales accounted for 40.99 percent of all sales, while 469 bank-owned and 785 short sales respectively made up 22.07 percent and 36.94 percent.
*The number of "normal” sales in December increased by 14.15 percent over December 2010, while short-sales increased 24.41 percent and foreclosures dropped 56.29 percent.
*The 8,095 homes pending closing in December of this year is a decrease of 3.2 percent compared to the 8,363 pendings in December of last year.
*Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in December were down by 10.30 percent when compared to December of 2010. For all of 2011, sales in the MSA are down 1.34 percent.
*The sales comparison for each county’s within the Orlando MSA are as follows:
- Lake: 4.63 percent above December 2010 (384 homes sold in December 2011 compared to 367 in December 2010);
- Orange: 14.96 percent below December 2010 (1,359 homes sold in December 2011 compared to 1,598 in December 2010);
- Osceola: 12.87 percent below December 2010 (467 homes sold in December 2011 compared to 536 in December 2010); and
- Seminole: 3.98 percent below December 2010 (507 sold in December 2011 compared to 528 in December 2010).
*The median price of all existing homes combined sold in December 2011, $118,000, is a 12.38 percent increase from the $105,000 median price recorded in December 2010.
*The median price for "normal” existing homes sold in December is $159,000, a decrease of 0.06 percent from the median price of "normal” existing homes in December 2010. The median price for bank-owned sales is $80,000 and the median price for short sales is $105,000.
*There are currently 9,732 homes available for purchase through the MLS. The December 2011 overall inventory level is 35.09 percent lower than it was in December 2010, and 3.99 percent lower than it was in November 2011.
*Single-family home inventory is down 34.50 percent; condo inventory is down 32.14 percent.
*The current pace of sales translates into 4.58 months of inventory supply.
*New contracts are down 12.39 percent compared December of 2010
*The Orlando affordability index decreased to 250.44 percent in December. First-time homebuyer affordability in December decreased to 178.09 percent.
*Homes of all types spent an average of 103 days on the market before coming under contract in December 2011, and the average home sold for 92.40 percent of its listing price.
2011 Year-end Recap
*Sales in 2011 were down by 3.48 percent over 2010. A total of 27,703 homes were sold in 2011 compared to 28,701 the previous year.
*Sales of normal homes in 2011 increased 12.15 percent over 2010. Short sales increased by 20.93 percent while bank-owned sales declined by 27.35 percent.
*The 2011 year-end year-to-date median price increased 1.29 percent to $109,900 compared 2010’s $108,500.
*By year’s end in 2011, 34,670 homes were sold in the Orlando MSA while 35,140 homes had been sold by year’s end in 2010 (for a 1.34 percent decrease). Each county’s 2011 year-end sales comparisons are as follows:
- Lake: 3.26 percent above 2010 (4,343 homes sold in 2011 compared to 4,206 in 2010);
- Orange: 4.92 percent below 2010 (17,965 homes sold in 2011 compared to 18,894 in 2010);
- Osceola: 1.03 percent above 2010 (6,401 homes sold in 2011 compared to 6,336 in 2010); and
- Seminole: 4.51 percent above 2010 (5,961 sold in 2011 compared to 5,704 in 2010).
"I am pleased to see a year-end sales tally that is very similar to 2010, which offered the homebuyer tax credit incentives to stimulate sales. Buyers are taking note of Orlando’s historic affordability conditions, consistent increases in prices, and dramatically declining inventory and taking action. In addition, I expect to see even more sales activity once the problem of contract failures – estimated by the National Association of REALTORS® to be as much as 33 percent nationwide – is resolved by an easing of unnecessarily restrictive lending standards.”
--ORRA Chairman Stephen Baker
Now is a good time to buy a house in Orlando because…
*Although many try to forecast when prices will hit bottom, the truth is that no one can predict the bottom of any market until it has already happened.
*Even within the Orlando market, different areas will "bottom” out at different times. Price fluctuations within each area of the Orlando market also differ.
*Buyers who hold off purchasing a home because they are waiting for prices to fall further may miss out on the home that they really want. The inventory of homes available for purchase, especially condos, is on a steady decline.
*Home prices have moderated, interest rates are at 40-year lows and the supply of homes for sale is plentiful. However, inventory has decreased by almost 60 percent since this time three years ago.
*Currently, about 58 percent of Orlando homes sales are foreclosures and short sales, which are typically priced much lower than "normal” homes. These types of homes sales continue to put downward pressure on the reported median or average sales price.
*Low interest rates, coupled with price declines, give trade-up buyers a unique opportunity to take advantage of market conditions. What an owner may lose on the sell side can be more than recovered on the buy side.
Florida Market Overview
*Sales, existing single-family: 12,993 in November 2011 (11.00 percent increase compared to November 2010).
*Sales, existing condo: 5,590 in November 2011 (2 percent increase compared to November 2010).
*Median price, existing single-family: $130,000 in November 2011 (0.00 percent change compared to November 2010).
*Median price, existing condo: $86,700 in November 2011 (4 percent increase compared to November 2010).
National Market Overview
*Sales, existing single-family: 305,000 in November 2011 (11.30 percent increase compared to November 2010).
*Sales, existing condo: 32,000 in November 2011 (6.70 percent increase compared to November 2010).
*Median price, existing single-family: $164,000 in November 2011 (4.00 percent decrease compared to November 2010).
*Median price, existing condo: $164,600 in November 2011 (0.20 percent decrease compared to November 2010).
"Sales reached the highest mark in 10 months and are 34 percent above the cyclical low point in mid-2010 – a genuine sustained sales recovery appears to be developing. We’ve seen healthy gains in contract activity, so it looks like more people are realizing the great opportunity that exists in today’s market for buyers with long-term plans.”
--NAR Economist Lawrence Young
Persuasive Points Overview
*Homeownership is an investment in your well-being and future.
*Homeownership offers immediate benefits and long-term value.
*Today’s market offers great opportunities for buyers and sellers.
*The supply and choice of homes for sale is plentiful in most markets.
Mortgage interest rates are low.
*Home prices are affordable.
*REALTORS® add value to the real estate transaction.
*REALTORS® are the most trusted resource for real estate information.
Economic and social benefits of homeownership
*Homeowners benefit from the power of leverage. Buyers typically use their own money for just a portion of the home price, but the appreciation they realize is based on the property’s total value.
*Given the leverage in purchasing a home, the average return on a 5 percent down payment over 10 years is usually three to five times greater than stock market returns.
*The typical homeowner’s net worth ($205,200) was 49 times that of the typical renter ($4,200) in 2008, according to NAR calculations using the latest statistics from the Federal Reserve Board.
*Homeownership offers "pride of ownership” — giving you control over your surroundings.
*Homeownership strengthens communities. Homeowners are more likely to be involved and engaged in local issues, and they move less frequently than renters. This helps to prevent crime, improve childhood education, and support neighborhood upkeep.
Owning a home is one of the best ways to build long-term wealth, providing both equity accumulation and tax benefits over time.
Buyer discussion topics
*Home prices have moderated, interest rates are at all-time lows, and the supply of homes for sale is plentiful. However, in some markets, the supply of unsold homes is beginning to diminish.
*Foreclosures are selling quickly in most places, especially in the lower price ranges that are attractive to first-time buyers.
*There are a number of attractive and safe mortgage products available now, providing additional reasons for buyers to get off the fence and into the market.
*The FHA single-family loan program is alive and well. As specialty mortgages have faded away, FHA is stepping in. In fact, the FHA market share is up to more than 30 percent, from just 6 percent in 2007.
Seller discussion topics
*Low interest rates, coupled with price declines give trade-up buyers a unique opportunity to take advantage of market conditions. What an owner may lose on the sell side can be more than recovered on the buy side.
*In some markets, prices have begun to rise, however, sellers should not expect explosive growth in home values.
*A return to the traditional 3-5 percent annual home price appreciation rate is likely in 2011. However, this is a national average and local markets vary widely. It’s best to consult a REALTOR® for the most accurate local market conditions and to help you set the right selling price.
*To sell quickly, make sure your home carries a compelling price, not just a comparable one.
Use a REALTOR® discussion topics
*It has never been more important than now to work with a REALTOR®, the local market professional, to properly gauge local neighborhood conditions.
*A growing number of consumers understand the importance of working with a REALTOR®. The level of "For Sale By Owner” properties (FSBOs) was a record low 9 percent of all home sales in 2010, down from 11 percent in 2009. The share of homes sold without professional representation has trended down since reaching a cyclical peak of 18 percent in 1997.
*Nearly half of all FSBOs in 2010 were private sales between parties who know each other. Only 5 percent of all sales actually were between unrepresented sellers in private transaction.
*Distressed sales — foreclosures and short sales — account for more than a third of all transactions nationwide. This varies widely from market to market — sometimes even from neighborhood to neighborhood. Distressed homes typically are selling at a 15 percent discount, but this varies widely by market, as well.
*REALTORS® have access to the most up-to-date and comprehensive property listing and sales information, making them a buyer’s best resource in finding the home that is right for each customer.
*Many markets have two levels of pricing: distressed sales and traditional sales. Foreclosures and short-sales tend to carry prices as much as of 20 percent below traditional homes in the same area. REALTORS® can help both buyers and sellers navigate today’s tricky market conditions.
Source: NAR Surround Sound Campaign
Why homeownership matters…
*Homeowners are happier and healthier and enjoy a greater feeling of control over their lives.
*Owning a home is one of the best ways to build long-term wealth. Historically, a homeowner’s net worth has ranged from 31 to 46 times that of a renter.
*Homeowners are free to redecorate, renovate, and modify their homes as they wish.
*Most home owners enjoy stable housing costs — a fixed-rate mortgage payment might not change for 15 to 30 years while rent typically increases 3 percent a year.
*Homeowners can typically deduct mortgage interest and property taxes on their federal individual income tax return.
*People who own homes vote more, volunteer more and contribute more to their neighborhoods.
*Homeowners do not move as frequently as renters, providing more neighborhood stability. In turn, this stability helps reduce crime and supports neighborhood upkeep.
*Children of homeowners do better in school, stay in school longer, are more likely to participate in organized activities and spend less time in front of the television.
To the United States
*Sixty-seven percent of American households are owner-occupied. America is a nation of homeowners.
*Homeowners pay 80 to 90 percent of federal individual income taxes, contributing to federal programs that benefit all Americans.
*Every home purchased pumps $60,000 into the economy for furniture, home improvements, and related items.
*Housing accounts for more than 15 percent of the national Gross Domestic Product, a key driver of our national economy.
Source: NAR Homeownership Matters Campaign