May 2013 Housing Market – Expanded Talking Points
Released June 17, 2013
Orlando Market Overview
*Orlando home sales (all home types combined) in May 2013 were up 15.63 percent when compared to May of 2012 and up 3.14 percent when compared to May 2013.
*Single-family home sales in the Orlando area increased by 16.64 percent in May when compared to May of last year. Villa sales increased by 21.08 percent; condo sales increased 7.85 percent.
*Of the 2,855 sales in May, 1,696 normal sales accounted for 59.40 percent of all sales, while 539 bank-owned and 620 short sales respectively made up 18.88 percent and 21.72 percent.
*The number of normal sales in May increased by 44.96 percent compared to May 2012, while short-sales decreased 8.96 percent and foreclosures decreased by 12.78 percent.
*The 8,631 pendings in May of this year is a decrease of 16.13 percent compared to the 10,291 pendings in May of last year (and a 1.75 percent decrease compared to the 8,785 pendings last month).
*Short sales made up 57.31 percent of pendings in May. Normal properties accounted for 29.58 percent and bank-owned properties accounted for 13.12 percent.
*Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in May were up by 8.32 percent when compared to May of 2012. Throughout the MSA, 3,464 homes were sold in May 2013 compared with 3,198 in May 2012.
To date, sales throughout the MSA are 9.48 percent above this time last year. Each individual county’s monthly sales comparisons are as follows:
- Lake: 14.37 percent above May 2012 (565 homes sold in May 2013 compared to 494 in May 2012);
- Orange: 6.48 percent above May 2012 (1,709 homes sold in May 2013 compared to 1,605 in May 2012);
- Osceola: 5.87 percent above May 2012 (541 homes sold in May 2013 compared to 511 in May 2012); and
- Seminole: 10.37 percent above May 2012 (649 sold in May 2013 compared to 588 in May 2012).
*The median price of all existing homes combined sold in May 2013 — $148,000 — is a 23.33 percent increase from the $120,000 median price recorded in May 2012.
*The median price for "normal” existing homes sold in May is $180,000, an increase of 12.50 percent from the median price of "normal” existing homes in May 2012.
*The year-to-year median price for short sales increased by 14.00 percent to $119,700 in May, while the median price for bank-owned sales increased by 18.07 percent to $98,000.
*There are currently 7,272 homes available for purchase through the MLS. The May 2013 overall inventory level is 11.78 percent lower than it was in May 2012.
*Single-family home inventory is down 14.93 percent; condo inventory is down 1.42 percent.
*The current pace of sales translates into 2.55 months of inventory supply.
*New contracts are down 4.24 percent compared to May of 2012. New listings are up 10.66 percent.
*The Orlando affordability index decreased to 212.25 percent in May. First-time homebuyer affordability in May decreased to 150.93 percent.
*Homes of all types spent an average of 68 days on the market before coming under contract in May 2013, and the average home sold for 96.70 percent of its listing price.
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 65 percent since this time three years ago.
*Currently, about 64 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: 20,662 in April 2013 (17.40 percent increase compared to April 2012).
*Sales, existing condo: 11,183 in April 2013 (13.60 percent increase compared to April 2012).
*Median price, existing single-family: $165,000 in April 2013 (14.20 percent increase compared to April 2012).
*Median price, existing condo: $128,000 in April 2013 (16.40 percent increase compared to March 2012).
National Market Overview
*Sales, existing single-family: 454,000 in April 2013 (13.50 percent increase compared to April 2012).
*Sales, existing condo: 53,000 in April 2013 (17.80 percent increase compared to April 2011).
*Median price, existing single-family: $192,800 in April 2013 (11.00 percent increase compared to April 2012).
*Median price, existing condo: $189,000 in April 2013 (11.30 percent increase compared to April 2012).
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 10 percent of all home sales in 2011 and 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.
*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