Orlando Home Prices Uptick 9% in May, Fourth Consecutive Monthly Increase

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(Orlando, FL) -- According the Orlando Regional Realtor Association (ORRA), the year-to-year median sales price of Orlando area homes jumped more than 9 percent in May, marking the fourth consecutive monthly increase and a leap of 11.11 percent since January.

The overall median price of Orlando homes increased 9.09 percent over May 2011's median price of $110,000, to $120,000. In addition, the May 2012 overall median price is 2.56 percent higher than that recorded in April 2012 ($117,000).

The May 2012 median prices of homes of all sales types increased in comparison to May 2011: bank-owned sales by 4.31 percent (to $83,450 from $80,000); short sales by 5.88 percent (to $108,000 from $102,000); and normal sales by 3.23 percent (to $160,000 from $155,000).

The average interest rate paid by Orlando homebuyers in May was 3.89 percent, the lowest average interest rate since ORRA began tracking the statistic in 1989. A year ago, homebuyers paid an average interest rate of 4.66 percent.

Members of ORRA participated in 2,337 home sales in May 2012, a decrease of 5.88 percent compared to May 2011 and a decrease of 4.06 compared to April 2012. More than 47 percent of May 2012 sales were normal; short sales made up 27.47 percent and foreclosure sales made up 25.16 percent. By comparison, in May 2011 normal sales accounted for 37.29 percent while short sales accounted for 27.10 percent and foreclosures accounted for 35.60 percent.

"The small decrease in sales is directly attributed to the enormous decrease in inventory," notes ORRA Chairman Stephen Baker, RE/MAX Central Realty. "There are simply not enough quality homes on the market to meet the demand from buyers. Every day I hear reports from Realtors about multiple offers within days of a home coming on the market, offers above asking price, and even bidding wars."

"For further evidence of buyer demand for homes, keep an eye on the months-of-supply statistic," points out Baker. "We are now at a record low of 3.53 months, which is below the previous record of 3.58 months during the red-hot market of December 2005."

Homes of all types spent an average of 85 days on the market before coming under contract in May 2012, and the average home sold for 95.57 percent of its listing price. In May 2011 those numbers were 104 days and 95.05 percent, respectively.

Pendings

Pending sales - those under contract and awaiting closing - are currently at 10,291. The number of pending sales in May 2012 is a mere 0.79 percent higher than it was in May 2011 (10,210) and 2.11 percent higher than it was in April 2012 (10,078).

Short sales, which take much longer to process from contract to close, made up 67.00 percent of pending sales in May 2012. "Normal" properties accounted for 20.00 percent of pendings, while bank-owned properties accounted for 13.00 percent.

Inventory

The number of existing homes available for purchase in Orlando is continuing a steady decline that began in back in July 2010 at 16,563 and now rests at 8,243. In May 2012, inventory was 24.85 percent less than it was in May 2011.

The inventory of single-family homes is down by 28.22 percent when compared to May of 2011, while condo inventory has hatched a surprising increase of 1.18 percent.

The month-of-supply statistic has set a new record low. The current inventory combined with the current pace of sales equates to a 3.53-month supply of homes in Orlando, which is a rate not seen since December of 2005 when it was a 3.58-month supply.

Affordability

The steady increases in median price have led to steady decreases in Orlando's affordability index: the May index of 250.73 percent is two percentage points lower than April 2012's index of 252.51 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. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.)

Buyers who earn the reported median income of $54,416 can qualify to purchase one of 4,722 homes in Orange and Seminole counties currently listed in the local multiple listing service for $300,879 or less.

First-time homebuyer affordability in May dipped to 178.30 percent from last month's 179.57 percent. First-time buyers who earn the reported median income of $37,003 can qualify to purchase one of the 3,377 homes in Orange and Seminole counties currently listed in the local multiple listing service for $181,865 or less.

Condos and Town Homes/Duplexes/Villas

The sales of condos in the Orlando area decreased by 17.37 percent in May when compared to May of 2011 (371 to 448).

The most (122) condos in a single price category that changed hands in May were yet again in the $1 - $50,000 price range and accounted for 32.88 percent of all condo sales.

Orlando homebuyers purchased 206 duplexes, town homes, and villas in May 2012, which is a 8.44 percent decrease compared to May 2011. Most (29 each) fell within the $1 - $50,000 price range and the $100,000 - $120,000 price range.

MSA Numbers

Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in May were down by 1.78 percent when compared to May of 2011. Throughout the MSA, 3,028 homes were sold in May 2012 compared with 3,083 in May 2011. To date, sales are down 7.40 percent for all counties combined.

Each individual county's monthly sales comparisons are as follows:

• Lake: 24.73 percent above May 2011 (469 homes sold in May 2012 compared to 376 in May 2011);

• Orange: 8.20 percent below May 2011 (1,511 homes sold in May 2012 compared to 1,646 in May 2011);

• Osceola: 13.42 percent below May 2011 (484 homes sold in May 2012 compared to 559 in May 2011); and

• Seminole: 12.35 percent above May 2011 (564 sold in May 2012 compared to 502 in May 2011).