March 2012 Housing Market – Expanded Talking Points
Released April 16, 2012
*Orlando home sales (all home types combined) in March 2012 were up 17.82 percent when compared to February of 2012 and down 10.95 percent when compared to March 2011.
*Single-family home sales in the Orlando area decreased by 8.50 percent in March when compared to March of last year. Condo sales decreased by 23.20 percent; duplex, town home, and villa sales decreased by 4.53 percent.
*Of the 2,327 sales in March, 942 "normal” sales accounted for 40.48 percent of all sales, while 617 bank-owned and 768 short sales respectively made up 26.51 percent and 33.00 percent.
*The number of "normal” sales in March increased by 23.62 percent over March 2011, while short-sales increased 20.75 percent and foreclosures dropped 49.22 percent.
*The 9,748 homes pendings in March of this year is an increase of 2.50 percent compared to the 9,510 pendings in March of last year.
*Short sales made up 69.07 percent of pendings in March. Normal properties accounted for 17.90 percent and bank-owned properties accounted for 13.03 percent.
*Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in March were down by 10.12 percent when compared to March of 2011.
Each individual county’s monthly sales comparisons are as follows:
- Lake: 4.11 percent above March 2011 (431 homes sold in March 2012 compared to 414 in March 2011);
- Orange: 12.37 percent below March 2011 (1,509 homes sold in March 2012 compared to 1,722 in March 2011);
- Osceola: 18.46 percent below March 2011 (552 homes sold in March 2012 compared to 677 in March 2011); and
- Seminole: 3.09 percent below March 2011 (501 sold in March 2012 compared to 517 in March 2011).
*The median price of all existing homes combined sold in March 2012, $115,000, is a 12.94 percent increase from the $102,000 median price recorded in March 2011.
*The median price for "normal” existing homes sold in March is $155,000, is an increase of 3.33 percent from the median price of "normal” existing homes in March 2011.
*The median price for short sales decreased by 0.73 percent to $102,000, while the median price for bank-owned sales increased by 5.25 percent to $84,200.
*There are currently 8,666 homes available for purchase through the MLS. The March 2012 overall inventory level is 30.85 percent lower than it was in March 2011.
*Single-family home inventory is down 31.95 percent; condo inventory is down 20.78 percent.
*The current pace of sales translates into 3.72 months of inventory supply.
*New contracts are down 15.93 percent compared March of 2011. New listings are down 18.45 percent.
*The Orlando affordability index decreased to 257.88 percent in March. First-time homebuyer affordability in March decreased to 183.38 percent.
*Homes of all types spent an average of 97 days on the market before coming under contract in March 2012, and the average home sold for 94.83 percent of its listing price.
"This month’s increase in sales and median price indicate a shift toward favoring sellers, and the downward slide in inventory means a downward slide in the number of choices available to buyers. A great time for buyers to explore their options is during the REALTOR® Nationwide Open House, April 28 – 29, when REALTORS® will be opening scores of their listings to visitors.”
--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 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: 14,720 in February 2012 (4.80 percent decrease compared to February 2011).
*Sales, existing condo: 7,545 in February 2012 (16.00 percent decrease compared to February 2011).
*Median price, existing single-family: $134,000 in February 2012 (7.20 percent increase compared to February 2011).
*Median price, existing condo: $95,000 in February 2012 (15.90 percent increase compared to January 2011).
National Market Overview
*Sales, existing single-family: 251,000 in February 2012 (13.6 percent increase compared to February 2011).
*Sales, existing condo: 35,000 in February 2012 (9.4 percent increase compared to February 2011).
*Median price, existing single-family: $157,100 in February 2012 (0.10 percent increase compared to February 2011).
*Median price, existing condo: $153,000 in February 2012 (1.60 percent increase compared to February 2011).
"The market is trending up unevenly, with record high consumer buying power and sustained job gains giving buyers the confidence they need to get into the market. Although relatively unusual, there will be rising demand for both rental space and homeownership this year. The great suppression in household formation during the past four years was unsustainable, and a pent-up demand could burst forth from the improving economy.”
--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 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