Central Florida Real Estate Blog

On November 9, 2010, the MFRMLS-My Florida Regional Multiple Listing Service (http://www.mfrmls.com/) which covers most of the Central Florida market released the October Real Estate Sales & Inventory Report for the Orlando, FL Region. While a downward value trend appeared over the summer and early fall months, the Orlando market saw a significant increase in the average sale price during the October reporting period. Since June, we have seen a continual erosion in the average sales price on a month-to-month basis through the end of September. Could we be getting close to the bottom? Or is this just another hiccup in the current cycle. Let's take a look at the stats before you make any conclusion.  

The number of single family home sales that closed in the month of October decreased again significantly to 1,872 units, or -28.3% from September. Of those October sales, 67% percent were distressed, being either REO's-bank owned foreclosures (41%) or short sales (26%). The remaining “arms-length” transactions made up the balance of the October sales. While inventory is slowly being absorbed, there is almost 16,000 active homes available in the marketplace. MFRMLS currently shows a 8.5 month supply of inventory. While inventory "may" appear to be absorbed, these numbers are significantly distorted due to the significant amount of pending short sales which most likely will re enter the active inventory, or end up in foreclosure.

The current average list price of a home has increased 8.7% from September to October, but is still down 10.5% over the last 12 month. 

In regards to the average sale price of a home, we saw a sharp increase of another 8.4% from September to October. While an impressive month-to-month stat, during the last 12 months that number is still down 10%. Consider the dynamic between Sellers and Buyers during the negotiating process. As of the January'10 report, Buyers were negotiating an average of 6% off the asking price. As of October, that percentage had narrowed to 5%. It appears Sellers are beginning to get more realistic regarding their asking price, thus creating a more narrow negotiating margin.

The number #1 selling price range is still the $1.00-$49,999, making up over 21% of the year-to-date sales. In this category alone last month, there was over 400 units sold. Furthermore, the $0.00-$99,999 range accounted for 46.49% of the sales, while the $100,000-$199,999 range accounted for 34.57%. Lastly, the $200,000-$250,000 range accounted for another 7.39% of sales. Collectively year-to-date, the $0-$250K price range makes up over 88% of all sales in the region. In comparison to the rest of the market, Sellers above the $250,000 range must be very realistic regarding price & marketing strategies.

On the flip side, Buyers have a huge advantage in negotiating on luxury and higher-end price ranges. With lower demand comes much more negotiating power. As predicted, sales volume and values have continued to drop-off following the expiration of the homebuyer tax credit. Recent news reports mentioned rumors floating around Washington, DC that Congress is considering reinstating some form of the tax credit to add additional stimulus to the real estate market. Hopefully our newly elected officials will act sooner than later.

For all you Buyers and Investors...according to the October edition of DSNews-Default Servicing News (http://www.dsnews.com), Florida is still ranked #1 in foreclosure and loan delinquency rates in the country. As of the last reporting cycle in June, the foreclosure rate stood at 11%, while the 90+day loan delinquency rate was at 18.3%. Lastly, the REO (real estate owned) rate stood at 1.2%. In my opinion, these stats continue to support the opinion that Central and South Florida markets are going to offer great buying and investment opportunities for months, if not years to come.

Where is the market heading from here? Industry Analysts are talking more and more about the "Shadow Inventory" of foreclosure lurking behind the scenes potentially creating another significant round of residential foreclosures hitting the marketplace. If these concerns come true, we could see further erosion of home values in the near term. Also, don't forget about the looming commercial marketplace which could further devistate our hopes of a speedy recovery. Lastly, with many of the nations largest bank halting foreclosure proceeding nationwide, what impact will this have on inventory levels and values? Stayed tuned, I'm predicting a roller coaster ride over the next 12 months....

On a special note, for those out there who would like to get further insight into the financial crisis, I've just read an article by Matt Taibbi of Rolling Stones Magazine. The title of the article is "Courts Helping Banks Screw Over Homeowners" and will be published in the November 21, 2010 issue. You can click on the link below and read the article now. But, please have your bottle of Mallox ready because Mr. Taibbi takes us into the court room of the foreclosure courts in Jacksonville, FL for a mind-numbing reality into how the courts, lawyers, banks, servicers...to name a few...are giving us the royal shaft. Pucker Up!

If you would like a full copy of the Orlando Regional Sale & Inventory Report, please email joe@rockspringsrealty.net and a copy will be emailed to you at no charge. 

Rock Springs Realty is a full-service Real Estate Brokerage working with Buyers, Sellers and Investors throughout the Central Florida Area. We cover all areas of Lake, Sumter, Orange, Seminole, Osceola, and Volusia Counties. Our sales staff has extensive experience Buying and Selling normal, REO (Bank Owned Foreclosures), and investment properties. We welcome the opportunity to confidentially discuss your real estate needs. You can reach us toll free at (877) 333-2811 or on the web at www.rockspringsrealty.net

P.S. - If you would like a list of bank-owned foreclosure properties in your area, please contact me at the toll free number above.

Best Regards,
Joe Bornstein, Broker/Owner
Rock Springs Realty, LLC
3780 Rochelle Lane
Apopka, FL 32712