Median Price Of Homes Jumps 12%
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Jeff Singletary's Blog
Jeff Singletary
Blog
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ORLANDO FLORIDA TOP 10 CITIES
Top 10 cities targeted by foreign investors
ORLANDO, Fla. – Dec. 19, 2011 – From Chinese investors flocking to California to Canadian snowbirds heading to Arizona, international homebuyers are offering a growing niche for more real estate professionals.
But which places are international investors targeting in their home search? Point2Homes.com evaluated where buyers from overseas are looking online to gauge possible current and future home-purchasing patterns.
Canadian investors have a growing appetite for U.S. real estate, Point 2 finds. Canadian investors made up 91.89 percent of the overall international traffic to Arizona listings, 75.90 percent to Hawaii, 73.92 percent to Michigan, 70.55 percent to Nevada, and 65.05 percent to California.
Las Vegas had the highest overall international traffic online among U.S. cities, with Canadians serving as the leading source of traffic there at 70.47 percent, followed by 5.28 percent of the traffic coming from U.K. residents and 2.19 percent from France.
The top 10 cities for international traffic online by international buyers in the third quarter are:
1. Las Vegas, Nev.
2. Orlando, Fla.
3. Kissimmee, Fla.
4. Detroit, Mich.
5. Pompano-Beach, Fla.
6. Miami, Fla.
7. Mesa, Ariz.
8. Davenport, Fla.
9. Phoenix, Ariz.
10. Indio, Calif.
Overall, Florida emerged as the top state attracting international traffic online for the third-quarter, according to Point2.
Source: Point2
ORLANDO FLORIDA SEPTEMBER MARKET TRENDS
Market Statistics
Orlando area "normal" and short-sales both increase as sales of foreclosures drop more than 50 percent
(October 13, 2011 – Orlando, FL) Sales of foreclosed homes declined 52.66 percent in September of this year compared to last, while “normal” sales and short-sales both increased (by 18.44 percent and 25.82 percent, respectively), reports the Orlando Regional REALTOR® Association. All together, the 2,054 sales transactions involving ORRA members in September 2011 are 13.48 percent lower than in September 2010.
ORRA’s housing activity report for the month of September follows just days after an announcement by Freddie Mac that the national average rate on a 30-year fixed mortgage had fallen below 4 percent for the first time ever, to 3.94 percent.
Locally, buyers who purchased an Orlando area home in September are paying the lowest average interest rate – 4.19 percent – since the Orlando Regional REALTOR® Association began tracking the statistic in January of 1995.
“For those who can qualify, it’s an extraordinary time to buy,” says ORRA Chairman of the Board Mike McGraw, McGraw Real Estate Services, Inc. “Although Orlando’s inventory is shrinking and the median price is rising, there are still plenty of available options and the median price is comparable to that back in 2001, when the interest rates were more than 7 percent.”
The Orlando area’s overall median price is $115,000 for the month of September, a 9.52 percent increase over September 2010. Since January of this year, Orlando’s median price has increased by 21.18 percent.
The median price of “normal” sales closing in September 2011 was $153,500, and normal sales accounted for 38.46 percent of all transactions. These two steadily improving factors have been helping to keep overall median prices hovering above those recorded in 2010.
But the lower median price of foreclosures and short sales (which combined account for 61.54 percent of all sales in September) does continue to negatively influence the overall median price.The median price for bank-owned sales in September is $82,000 and the median price for short sales is $100,000.
Homes of all types spent an average of 100 days on the market before coming under contract in September 2011, and the average home sold for 93.80 percent of its listing price. In September 2010 those numbers were 87 days and 95.19 percent, respectively.
At the current pace of sales, there is a 4.83-month supply of homes in Orlando’s inventory. The number of homes available for purchase in the Orlando area declined in September by 124 homes and now rests at 9,931. Overall inventory is down 39.29 percent from September of last year; single family home inventory is down 36.12 percent while condo inventory is down 50.16 percent.
Pending sales – those under contract and awaiting closing – are currently at 9,369. The number of pending sales in September 2011 is 7.53 percent greater than in September 2010.
Affordability
The Orlando affordability index increased to 250.11 percent in September. (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 $53,960 can qualify to purchase one of 5,455 homes in Orange and Seminole counties currently listed in the local multiple listing service for $287,628 or less.
First-time homebuyer affordability in September increased a bit to 177.86 percent from last month’s 176.78 percent. First-time buyers who earn the reported median income of $36,693 can qualify to purchase one of the 3,831 homes in Orange and Seminole counties currently listed in the local multiple listing service for $173,855 or less.
Condos and Town Homes/Duplexes/Villas
The sales of condos in the Orlando area (298) decreased by 47.16 percent in September when compared to September of 2010 (564).
The most (140) condos in a single price category that changed hands in September were yet again in the $1 - $50,000 price range and account for 46.98 percent of all condo sales. Low-priced units have overwhelmingly dominated condo sales since March of 2009; this year alone, low-priced sales have made up 48.63 percent of all sales.
Orlando homebuyers purchased 220 duplexes, town homes, and villas in September 2011, which is a 5.98 percent decrease from September 2010, when 234 of these alternative housing types were purchased. Most sales (36) were between $100,000 and $120,000.
MSA Numbers
Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in September were down by 13.75 percent when compared to September of 2010. Throughout the MSA, 2,541 homes were sold in September 2011 compared with 2,946 in September 2010. To date, sales in the MSA are down 2.55 percent.
Each individual county’s monthly sales comparisons are as follows:
Lake: 6.77 percent above September 2010 (331 homes sold in September 2011 compared to 310 in September 2010);
Orange: 17.48 percent below September 2010 (1,317 homes sold in September 2011 compared to 1,596 in September 2010);
Osceola: 25.09 percent below September 2010 (436 homes sold in September 2011 compared to 582 in September 2010); and
Seminole: 0.22 percent below September 2010 (457 sold in September 2011 compared to 458 in September 2010).
Let's take a look at some of the opportunities and positive indicators for the future of Florida's real estate market.
Let's take a look at some of the opportunities and positive indicators for the future of Florida's real estate market.
1. Great prices. Statewide, home prices have fallen about 20 percent in the past year. Florida Association of Realtors® statistics show the existing-home median sales price was $185,400 in the third quarter of 2008, compared with $233,200 in third quarter 2007. By the way, those numbers are still significantly higher than in the early years of the decade. In 2003, the third-quarter sales price was $163,700, which reflects an increase of about 13.3 percent over the five-year period. (The median is a typical market price where half the homes sold for more, half for less.)
2. The time is right. Home sales volumes are rising again -- a signal that the market recovery may be underway. In third quarter 2008, statewide sales of existing single-family homes were up 5 percent compared to the same period last year, according to FAR statistics.
3. High inventory levels. Conditions are ideal for buyers to find their dream home. Inventory is plentiful in all price ranges. But as sales volumes increase, inventory levels are likely to shrink. That reality translates into this advice for buyers: Don't wait, now is the time to buy!
5. Incentives to buy. Federal, state and local housing programs can help buyers make that big purchase. The American Recovery and Reinvestment Act has increased the First-Time Homebuyer Tax Credit from $7,500 to $8,000 for purchases on or after Jan. 1, 2009, and before Dec. 1, 2009. Talk to a local mortgage lender about state and federal incentive programs.
6. A long-term-growth state. Long-term economic and demographic trends continue to favor Florida. By 2010, economists forecast that Florida will be the third-most-populated state in the country. Florida has been one of the 10-fastest-growing states in the U.S. for each of the past seven decades, and often the state has been in the top four, according to Census data. Population growth will continue to provide a foundation for other economic development, such as new jobs and growing incomes. All of these trends are positive indicators for real estate growth.
7. A migration magnet. Even with a slowdown in economic growth nationally, projections call for Florida's population to return to more normal growth levels of about 317,000 a year between 2010 and 2020, similar to the 1980s and 1990s, said Stan Smith, director of the University of Florida's Bureau of Economic and Business Research. That's a lot of new buyers coming into the market.
8. A favored retirement destination. Over the long term, Florida stands to benefit from the migration of the aging Baby Boomer generation, roughly 80 million strong. Demographic studies show that the Sunshine State's mild climate and outdoor amenities continue to make Florida a favorite retirement destination.
9. A diverse economy. Florida's economy, like the rest of the nation, is impacted by the recession. Some business sectors, though, appear promising for the Florida economy. The healthcare and technology sectors are quickly becoming an important economic force in South and Central Florida. The Milken Institute/Greenstreet Real Estate Partners ranked five Florida communities on its "Best Performing Cities Index 2008," which ranks U.S. metropolitan areas by how well they are creating and sustaining jobs and economic growth. Florida's business climate ranked fourth among executives and sixth overall on Site Selection magazine's 2008 Top State Business Climate rankings.
10. Investment outlook. Every quarter, the University of Florida's Bergstrom Center for Real Estate Studies conducts a survey of industry executives, market research economists, real estate scholars and other experts. In the fourth quarter 2008 survey, the investment outlook for various types of Florida properties declined from the third quarter of 2008, although it is noted that the investment outlook remains higher than it was at times in 2006 and 2007. "We have 40 pages of comments from our respondents, and although the dominant theme is the disruption of financing, perhaps the second theme, as one person put it, is people being on the sidelines with full pads and helmets just waiting to jump back in," says Director Dr. Wayne Archer, when referencing the 2008 third quarter results.
11. Homeownership has value. Realtors® believe -- and research supports the belief -- that homeownership provides a variety of tangible and intangible benefits to the community and homeowners. Studies show that home equity is still the largest single source of household wealth.
12. Greater sense of well-being. Owning a home leads to increased personal well-being. Research shows that people who own their own homes tend to show higher levels of personal self-esteem and life satisfaction, which in turn helps to make homeowners and their children more productive members of society.
13. Beneficial for kids. Studies show that children raised in homes owned by their families are more likely to stay in school and graduate high school. They're also shown to have a higher lifetime annual income.
14. Community involvement. People who own homes have a strong financial stake in what happens to their community and tend to become more involved in community and civic affairs. Studies show that homeowners also interact more with their neighbors and communities. Compared to renters, homeowners join up to 41 percent more civic and/or nonprofessional organizations, such as the PTA or Scouts; vote in local elections 15 percent more often; enhance their neighborhoods with gardens 12 percent more often; attend church about 10 percent more often; and have a 3 percent greater chance of being interested in public affairs.
15. An unsurpassed lifestyle. Finally, let's not forget the things that brought people to Florida in the first place, and will continue to attract them -- beautiful beaches, fabulous weather and a friendly business climate, with no state income tax. It's no wonder that Florida's combination of temperate climate, outstanding recreational amenities and economic opportunity has consistently put the Sunshine State in the top three of Harris Poll's "Most Desirable Places to Live"
Is Now A Good Time To Buy a Home?
The answer is YES!!!! Here is why…… Let's assume prices continue to drop. If you bought a $200,000 dollar home (and for the purpose of illustration obtained a $200,000 loan), and that house drops 10% in the next year the math is easy, you just lost $20,000 BUT - and this is a big BUT - if you obtained a loan today for that house at 4.25%, and if that same loan in one year costs 6% then the difference in payment is a lot LESS if you buy the house now. ($200k @ 4.25% = $984 / $200k @ 6.0% = $1,199) for a difference of $215 every month Over 30 years that difference is a whopping $77,400! One thing we have been assured of is that interest rates have to and eventually will be going up as the economy improves.
As real estate history has shown over the last 100 years prices will go up, and have always gone up, especially after a correction. We can all agree The Greater Orlando real estate market has definitely had a correction in value. In most cases at least a 50% correction in value.
Please feel free to contact me at anytime if I can be of further assistance. It would be my pleasure to serve you.
Should I Buy a Home Now?
I'm often asked if this is a good time to buy a home. Some clients are concerned that home prices may fall further than they have already. They are assuming that the best course of action is to wait for the bottom in the market and then buy. The problem with this approach is that you don't know where the bottom is until you see it in the rear view mirror, meaning until you've missed it!
Home prices are one factor in determining your cost of ownership, but so are interest rates and financing availability. Even though interest rates have gone up in the last six months, they are still near historic lows. Since your monthly mortgage payment is a combination of paying down your principal and paying the interest owed, if home prices come down a little further but interest rates up, it could cost you even more to service a mortgage on an identical home!
While a home is a major investment, it is also the center of your personal life. It's important to live in a home that reflects your taste and values, yet is within your financial "comfort zone." To that end, it may be more important to lock in today's relatively low interest rates and low home prices, rather than to hope for a further break in prices in the future.
Please give me a call if I can be of any assistance in determining how much home you can afford in today's market.
Displaying blog entries 1-6 of 6
