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May, 2007 Market Pulse Analysis and Commentary
I was hoping and actually willing to bet that there would be news of significant improvement this month after four slow sales months to start the year! It was expected that we'd begin to see the normal seasonal bump in sales in May but that did not happen. According to the latest Market Pulse Report, 1,550 homes sold in May, below the average of about 1,600 homes per month were sold in Orange and Seminole Counties in the first four months of 2007. The Market Pulse Report covering May 2006 to May 2007 real estate activity was released this week and is enclosed for your review. The report covers listings, sales, days on market and other critical statistics regarding real estate transactions in Orange and Seminole Counties comparing and showing trends for the past thirteen months.
The active listing numbers increased again to 25,463 homes for sale in the two county area. This is yet again the highest inventory level in the history of Central Florida real estate, and a record which has been broken monthly for five consecutive months. While homes for sale increased, homes sold during the month declined to only 1,550 homes closed in May, 2007. This is a 45% drop from last year's number when 2,842 home sales were recorded. The number of Realtors in our Association is still HIGHER than one year ago (12,157 members in 2007 compared to 11,821 in May, 2006). I'm thinking the number of agents will have to decline appreciably and soon. There are less than 8,000 homes sold split between 12,000+ agents over a five month period.
The number of homes on the market has increased by 40% (25,463 in May, 2007 compared to 18,179 in May, 2006). Prices have still remained fairly stable for the time being. The Absorption Rate (the number of homes for sale 2,435 divided by the monthly closed sales 1,469), which is a key indicator of overall market health, shows there is currently more than a 16.5 month supply of homes on the market! I'm seeing a lot of homes now that are vacant (which can cause insurance issues) and I'm seeing a lot of steep price reductions of $30,000 to $50,000 on some fairly low and moderately priced homes. Buyers are still standing on the sidelines and reading the news so each showing and buyer is critical in this market.
Combined with the property taxes and homeowners insurance costs, and the sub-prime loan crisis causing tightening of credit standards allowing fewer people to buy and refinance, it is quite honestly looking like at least another year and probably more before we get back to a balanced market. This is not to discourage anyone from making a decision to buy or sell a home, vacation home, or income/investment properties. I only want you to be aware of the actual numbers and trends to assist you in making the decisions that best meet your needs. On behalf of the entire Marty Hunt Team, we look forward to assisting you with any real estate needs throughout the Central Florida area! Feel free to contact me directly at (407) 869-7779 or toll-free at (888) 412-8681 with any real estate questions you may have. Have a great Summer!!!
Sincerely,
Marty Hunt
Marty Hunt, Realtor® ABR, CRS, GRI, e-PRO
Marketing Specialist and Real Estate Consultant
Realty Executives Orlando
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