Central Florida Real Estate Blog

On May 12, 2011, the MFRMLS - My Florida Regional Multiple Listing Service (http://www.mfrmls.com/) which covers most of the Central Florida market released the April 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. In addition, this week has brought multiple industry analyst reports showing we may be in-store for more turmoil in the foreclosure sector. To start, I'll include some current statistics from the Orlando Regional Realty Association (http://www.orlrealtor.com)

“In addition to sales, inventory level is affected by the steadily decreasing number of homes going on the market each month since March of 2010,” explains ORRA Chairman of the Board Mike McGraw, McGraw Real Estate Services, PL. “New listings are down by 26 percent for the year and as a result, Orlando is resting on a market-healthy rate of 4.81 months of inventory.”

Orlando’s median price experienced its third month-over-month gain, with area homes selling for a median of $105,000. That median price is 8.70 percent lower than April 2010’s median price of $115,000.

The lower median price of foreclosures and short sales — which at 65.49 percent of all sales in April actually represents a 5 percent drop from last month — continues to drag down the overall median price.The median price for bank-owned sales in April is $80,000 and the median price for short sales is $91,000. The median price for “normal” existing homes sold in April is $160,000.

While inventory "is" slowly being absorbed, there is still over 12,200 active homes available in the marketplace. MFRMLS currently shows a 4.9 month supply of inventory but 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 April decreased to 2,488 units, or a decrease of 5.8% from March.

The current average list price of a home was up 6% from March to April, but still down 7.4% from April 2010.

In regards to the average sale price of a home, again we saw a modest increase of 5.4% from March. While we have seem a three month reporting upward trend, the jury is still out in regards to the future of this cycle.  Consider the dynamic between Sellers and Buyers during the negotiating process. As of April'10, Buyers were negotiating an average of 5% off the asking price. A year later, that percentage has increased to 6%. It appears Buyers are still in command during the negotiating process.    

The number #1 selling price range is still the $1.00-$49,999, making up a whopping 21.98% of the year-to-date sales. In this category alone last month there was over 470 units sold. Furthermore, year-to-date the $0.00-$99,999 range accounted for 50.74% of the sales, while the $100,000-$199,999 range accounted for 32.77%. Lastly, the $200,000-$250,000 range accounted for another 6.44% of sales. Collectively year-to-date, the $0-$250K price range makes up almost 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 mentioned above, more trouble is brewing in the default and foreclosure sectors. As reported on Housingwire (http://www.housingwire.com) yesterday, Mortgages 30 or more days delinquent or in foreclosure totaled 6.38 million in April, a 2.3% increase from the previous month, according to Lender Processing Services (http://www.lpsvcs.com/).

The LPS "first look" monthly mortgage performance report showed a sudden increase in troubled loans in April after an 11% monthly drop in March. However, delinquencies are still 16.3% below levels seen one year ago. Overall, 7.97% of all loans in the LPS database are 30 or more days delinquent.

Of the 6.38 million properties in 30-day delinquency or worse, 4.2 million are not in foreclosure. There are also 1.9 million loans 90 days or more delinquent but not in foreclosure.

These mortgages are the exact ones making up the shadow inventory of foreclosures that are keeping downward pressure on home prices and stalling out a recovery. According to another data provider, CoreLogic (http://www.corelogic.com), the shadow inventory has declined slightly over the past year.

CoreLogic defines the shadow inventory as mortgages in at least 90-day delinquency and currently transitioning from foreclosure to REO. This supply of properties currently not on MLS systems but winding through the foreclosure process fell to 1.8 million in January 2011, down from 2 million the year before.

But this inventory will continue to see incoming loans for some time.

"In addition to the current shadow supply, there are nearly 2 million nondelinquent or current negative equity loans that are more than 50% upside down that will likely become shadow supply in the near future," CoreLogic said. 

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