Central Florida Real Estate Blog

On October 11, 2010, the MFRMLS-My Florida Regional Multiple Listing Service (http://www.mfrmls.com/) which covers most of the Central Florida market released the September Real Estate Sales & Inventory Report for the Orlando, FL Region. While an upward value trend appeared over the summer months, it looks like the Orlando market is unlikely to recover anytime soon. Since June, we have seen a continual erosion in the average sales price on a month-to-month basis through the end of September for an average depreciation rate of 11.8%. With most major banks halting foreclosure proceeding nationwide and the likelihood of additional government interventions, in my opinion we are unlikely to see the bottom of this real estate market anytime soon. Let's look at the numbers before you draw your own conclusion.

The number of single family home sales that closed in the month of September decreased significantly to 2,315 units, or -10.3% from August.  Of those September sales, almost 71% percent were distressed, being either REO's-bank owned foreclosures (47%) or short sales (24%). The remaining “arms-length” transactions made up the balance of the September sales. While inventory is slowly being absorbed, there still is over 17,000 active homes available in the marketplace. MFRMLS currently shows a 7.4 month supply of inventory. While inventory "may" appear to be absorbed, these numbers are significantly distorted due to the significant number 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 decreased 3.9% from August to September and is down 15.2% over the last 12 month. 

In regards to the average sale price of a home, we saw a decrease of another 3.9% from August to September. During the last 12 months that number is also down 14.4%. 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 September, 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 500 units sold. Furthermore, the $0.00-$99,999 range accounted for 46.43% of the sales, while the $100,000-$199,999 range accounted for 34.71%. Lastly, the $200,000-$250,000 range accounted for another 7.42% 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 more negotiating power. As predicted, sales volume and values have continued to drop-off following the expiration of the homebuyer tax credit. It appears rumors are 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 elected officials, or 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 erode additional 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....

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