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2007 Central FL Real Estate: From the Rear View Mirror!
It's that time of year when we close the books, pack away the files, and reflect on the happenings of the past year. It's a look back which hopefully will give us some insight about what lies ahead for 2008.
The median sales price of a single-family home in the Orlando area in December 2007 dropped in one month by $11,000 to $223,900, reports the Orlando Regional Realtor® Association. The median sales price for December 2007 is 10.44% below that of December 2006 ($250,000). HERE'S AN INTERESTING FACT YOU DON'T SEE IN THE NEWSPAPER: The AVERAGE sales price has remained relatively stable changing very slightly from $295,300 in December 2006 to $290,300 in December 2007, a difference of only 1.7%. Median price is what is reported regularly. My opinion is that this simply shows that the market is strongest in the lower price ranges (the starter homes) so more sales are occurring at the bottom price ranges which brings down the median price. I consider the average price more important and a better indicator of the overall market. Although average price can be more volatile on a month to month basis if a few really expensive homes close, it's a reliable number when we have a history and can see trends.
The decrease in the median home price to $223,900 means that the area's affordability index has improved tremendously - in December 2007 the index jumped to 100.3 percent. (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.) Buyers who earn the reported median income of $51,335 can qualify to purchase one of 6,936 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $230,617 or less.
SALES: The number of sales in the Orlando area declined by 48.33 percent in December 2007 compared to December of last year (1,005 to 1,945), and the number of sales that took place in December 2007 also decreased over the number of sales that occurred in November 2007 (1,029, which is revised from 963 as reported last month). Total year-end sales for 2007 (16, 673) were down by 39.50 percent over 2006 (27,559). Is everyone glad 2007 is behind us?
Homes of all types spent an average of 116 days on the market before being sold in December 2007; and the average home sold for 92.52 percent of its original asking price. In November, those numbers were 114 and 93.77 percent, respectively. The days on market calculation is hugely misunderstood and is very misleading. The only homes used to calculate days on market are the homes that SELL! There were 1005 sales but there were a whopping 4,619 homes taken off the market unsold (expired or withdrawn). So the nearly 80% of homes that did NOT sell aren't calculated into the days on market. We really need to change how that number is calculated and reported!
The majority of single-family homes (183) that changed hands in December 2007 were sold for between $200,000 and $250,000, a trend that was evident throughout 2007 (3,006 of the 13,181 single family homes that were sold in 2007 fell into this price category). Another 105 homes were sold in December 2007 for between $250,000 and $300,000. Two hundred fifty-five homes sold for less than $200,000 in December, and 262 sold for more than $300,000. On the far ends of the scale, 22 homes were sold for $1 million or more while only three homes sold for less than $50,000. By year's end, 354 homes in the Orlando area sold for more than $1 million.
Inventory
There are currently 24,298 homes active listings (includes single family, town homes and condos) in December. Inventory decreased by 1,874 homes in December 2007, which means that 1,874 fewer homes entered the market than left the market. A large decrease is generally expected in December due to the holidays and people waiting to list or re-list their homes until the new year. Compared to last year, the December 2007 inventory level (24,298) is 24.4 percent higher than it was in December 2006 (19,537).
The inventory level reflects a 24.18-month supply at the current pace of sales. So consider the two year supply when talking about the average of 116 days on market!
There are 18,328 single-family homes currently listed in the MLS. Most (6,673) are listed in the $200,000 - $300,000 price range. Condos currently make up 3,887 offerings in the MLS, while duplexes/town homes/villas make up the remaining 2,083. Most condos (559) are priced at $200,000 to $250,000; most duplexes/town homes/villas (521) also fall into the $200,000 - $250,000 range.
Condos and Townhomes/Duplexes/Villas
The sales of condos in the Orlando area declined by 77.0 percent in December: A total of 84 condos changed hands in December 2007 compared to 361 in December 2006. In a month-to-month comparison, December 2007 condo sales (84) decreased by 27.6 percent from November 2007 (116). Year-end condo sales are down by 58.0 percent (2,101 condos were sold in all of 2007 compared to 5,003 in 2006). At year's end, the majority of condos (342) had sold in the $140,000 to $160,000 range.
Orlando home buyers purchased 116 duplexes, town homes, and villas in December 2007, which is a 30.9 percent decline over December 2006 when 168 of these alternative housing types were purchased. Duplex, town home, and villa sales in December 2007 were up by 30.3 percent compared to the number of sales that took place in November 2007 (89). Overall, duplex, town home, and villa sales were down in 2007 (1,391) by 39.0 percent (2,264 sales in 2006).
The majority (32) of duplexes, town homes, and villas sold in December 2007 fell into the $200,000 to 250,000 category. That pattern was consistent throughout the entire year, which saw the majority (403) of duplexes, town homes, and villas sold within the $200,000 t0 $250,000 range.
MSA Numbers
Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in December were down by 42.1 percent when compared to December of last year. Throughout the entire MSA, 1,213 homes were sold in December 2007 compared with 2,096 in December 2006. By year's end, 19,976 homes were sold in the Orlando MSA while 33,106 homes were sold by year's end last year (a 39.7 percent decline).
Seminole County's December 2007 sales dropped 40.0 percent below that of December 2006 (281 to 468), while Orange County fell 49.4 percent (541 to 1,069). Lake County saw a 27.5 percent decline in the number of sales in December 2007 compared to December 2006 (221 to 305), and Osceola County experienced a 33.1 percent drop (170 to 254).
Each county's year-end sales comparisons are as follows:
Lake: 31.3 percent below 2006 (3,139 homes sold in 2007 compared to 4,571 in 2006);
Orange: 41.6 percent below 2006 (9,847 homes sold in 2007 compared to 16,848 in 2006);
Osceola: 45.6 percent below 2006 (2,702 homes sold in 2007 compared to 4,966 in 2006); and
Seminole: 36.2 percent below 2006 (4,288 homes sold in 2007 compared to 6,721 in 2006).
The above statistics are from the Orlando Regional Realtor Association and may not reflect all activity in the local housing market. It will be interesting to come back next year and see how things stack up! It looks like a slow start but I'm confident we'll pick up steam as the year progresses and that 2008 will be a better year when we calculate the final numbers. The only thing that could choke the market, big time, is if financing guidelines over-correct (which they currently have) and qualified buyers are not able to get financing that should be available to them. Many lenders are requiring higher down payments from buyers and there's uncertainty that even "good" buyers will be turned down for financing. Hopefully this will correct quickly and the real recovery can begin!
Marty Hunt, Realtor®, ABR, CRS, GRI, e-PRO
Realty Executives Orlando
Office: (407) 869-7779 Cell: (407) 619-2640
Toll Free: (888) 412-8681 Fax: (407) 478-1351
Email: mailto:marty@martyhunt.com
Web Site: http://www.martyhunt.com
BLOG: http://FloridaRealtorBlog.com
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