Central Florida Real Estate Blog

On April 11, 2011, the MFRMLS - My Florida Regional Multiple Listing Service (http://www.mfrmls.com/) which covers most of the Central Florida market released the March Real Estate Sales & Inventory Report for the Orlando, FL Region. While 2011 property value are trending upward, the Central Florida market it still extremely depressed.

“Short sales and foreclosures continue to dominate and account for 70.50 percent of sales in March,” says ORRA (http://www.orlrealtor.com) Chairman of the Board Mike McGraw, McGraw Real Estate Services, PL. “A consistently high percentage of these sales types is something that we want to see; the sooner they flush through the system the sooner we can get back to a market based on normal sales.” The lower median price of foreclosures and short sales drags down the overall median price. The median price for bank-owned sales in March is $80,000 and the median price for short sales is $102,500. The median price for “normal” existing homes sold in March is $152,500.

While inventory is slowly being absorbed, there is still over 13,200 active homes available in the marketplace. MFRMLS currently shows a 5.2 month supply of inventory. While inventory "may" appear to be evaporating, 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 number of single family home sales that closed in the month of March increased dramatically to 2,559 units, or an increase of 12.8% from February.

The current average list price of a home is virtually unchanged from February to March, but still down 8.2% from March 2010.

In regards to the average sale price of a home, again we saw a slight increase of 1.2% from February to March. While not very exciting on a month-to-month basis, during the last 12 months that number is still down 7.7%. Consider the dynamic between Sellers and Buyers during the negotiating process. As of March'10, Buyers were negotiating an average of 6% off the asking price. A year later, that percentage decreased to 5%. It appears Sellers are finally getting more realistic with their asking price.   

The number #1 selling price range is still the $1.00-$49,999, making up a whopping 23.05% of the year-to-date sales. In this category alone last month there was over 500 units sold. Furthermore, year-to-date the $0.00-$99,999 range accounted for 51.45% of the sales, while the $100,000-$199,999 range accounted for 32.12%. Lastly, the $200,000-$250,000 range accounted for another 6.75% of sales. Collectively year-to-date, the $0-$250K price range makes up over 90% 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. If you are a potential Buyer in the $250K range and up, you should be smiling. Year to date in the $250K-$1+ million range, Buyer are negotiating an average about 8% off the asking price of a property.   

Where is the market heading from here? As reported in the December issue of DSNews (http://www.dsnews.com), the November figures released by Fitch Ratings (http://www.fitchratings.com) put the industry's shadow inventory at 7 million homes. The agency defines the shadow supply of properties as loans that are delinquent, in foreclosure, or real-estate-owned by the servicers, and Fitch says based on recent liquidation trends, it will take more than 40 months to clear the existing distressed inventory.

According to the ratings agency, the number of months between the date of the borrower's last payment and the date of liquidation has steadily increased over the past several years and is now at more than 18 months on average. Fitch says that is the highest figure on record. While the volume of newly delinquent mortgages has begun to improve in recent quarters, Fitch says liquidation rates of existing distressed properties have been constrained by weak demand and expanded initiatives to modify loans for troubled borrowers.

On top of that, the agency's analysts believe the recent discovery of defects in the residential mortgage foreclosure process will further extend liquidation timelines, slowing the resolution of distressed properties in the shadow inventory and preventing home prices from finding a floor.

"While the reduced volume of distressed sales since 2009 has temporarily helped home prices, Fitch believes that the extension in foreclosure and liquidation timelines is simply prolonging the housing correction under way", the agency said in its report. The total number of troubled loans reached a peak in early 2010 and has begun to show some improvement prior to the most recent foreclosure moratoriums resulting from documentation issues, Fitch said.

According to the ratings agency's analysis, the latest industry trends indicate that it will take more than three years to sell the properties of loans that are currently seriously delinquent, in foreclosure, or REO. Fitch says for judicial foreclosure states, such as Florida, it is expected to take longer than the national average of 40 months to resolve the distressed loans, while for nonjudicial foreclosure states, like California, the inventory will likely be resolved faster. 

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