August, 2007 Market Pulse Analysis and
Commentary
The overall market has continued to "drag along
the bottom" but sales are staying in a narrow range as they have all year. We have not yet experienced a drop-off like we
usually do when school starts each fall so that is encouraging. It might be that there are always a certain minimum number
of people who need to buy a home regardless of the market conditions. This bottom threshold appears to have been reached,
or at least we are close to the bottom and appear to be holding fairly level.
Sales (unadjusted) for the month were 1,343 homes
sold, down 40.2% compared to last years 2,249 sales in August, 2006 according to the latest Market Pulse Report. This
report includes homes sold in Orange and Seminole Counties and compares August 2006 to August 2007 real estate activity.
The report covers listings, sales, days on market & important statistics regarding real estate transactions in Orange
and Seminole Counties comparing and showing trends for the past thirteen months.
Here's a link to this month's full
report: www.orlrealtor.com/Pages/marketpulse/Market-Pulse-9-07.pdf
The active listing numbers (homes for sale) increased slightly to
26,313 homes for sale in the two county area. This is another new record high inventory level in Central Florida real
estate, and a record which has been broken monthly for eight consecutive months. While homes for sale increased, homes
sold during the month again declined. The number of Realtors in our Association is higher than one year ago (12,501
members in 2007 compared to 12,114 in August, 2006). There are about 12,455 sales on this report which sold in 2007 year
to date. When divided between 12,501 agents that's an average of one home sold per agent in eight months!
The Absorption Rate (the number of homes for sale 26,313 divided by
the monthly closed sales 1,343), which is a key indicator of overall market health, shows there is currently a 19.6 month
(over a year and a half) supply of homes on the market! This is again the highest ratio I've seen in the years I've been
calculating this market indicator. Another concern is that "New Contracts" (a predictor of closed sales for the next month
or two) fell dramatically again to the lowest number in the thirteen month period.
We are starting to see more homes being rented (but there's a major
oversupply of rentals too) and more "short sales" (sellers who need debt forgiveness from their lender to reduce the loan
pay-off to make the sale work). Also, the price reductions are still very prevalent and the number of vacant homes is
substantial. Buyers are entering the market to buy at the lower prices, and the trend continues that the lowest priced
homes or the nicest homes in the neighborhood at near the lowest prices are selling.
I believe we are going to see a sluggish market during the last
quarter of 2007 and well into 2008. It might well be late 2008 before we see any significant jump in sales, and
realistically into 2009 before we have a balance in the market. It's a tough market for sure but some homes ARE selling.
It's a matter of time and price, and keeping your home in absolute move-in condition to attract the buyers that are in the
market today. 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 (888) 412-8681 with any real
estate questions you may have.
Marty Hunt, Realtor®, ABR, CRS, GRI, e-PRO
Realty Executives Orlando
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