Orlando Home Prices Spike 16% in February as Inventory Decreases 31%

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(Orlando, FL) -- According to the Orlando Regional Realtor Association (ORRA), 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 9,253. In February 2012, total inventory was 31.36 percent less than it was in February 2011.

The inventories of single-family homes and condos are both down: single-family by 32.68 percent and condo by 18.46 percent.

The current inventory combined with the current pace of sales equates to a 4.99-month supply of homes in Orlando (down from a 6.21-month supply in February 2011 and down from a 5.35-month supply in January 2012).

"Economists consider a six-month supply of homes to be an indicator of a market that is balanced between buyers and sellers," explains ORRA Chairman Stephen Baker, RE/MAX Central Realty. "A pace of 4.99 tilts the favor slightly toward sellers, and at the same time buyers are going to be challenged finding suitable homes because of the low inventory."

Members of ORRA participated in 1,854 home sales in February 2012, a decrease of 14.56 percent compared to February 2011. Nearly 40 (39.81) percent of February 2012 sales were normal; short sales made up 33.33 percent and foreclosure sales made up 26.86 percent. By comparison, in February 2011 normal sales accounted for 26.36 percent while short sales accounted for 23.73 percent and foreclosures accounted for 49.91 percent.

"Sellers of normal homes should take heart," says Baker. "The sales of normal homes has really taken off; they are up 29.02 percent over this time last year and 17.14 percent over last month alone. This is an indicator that short sales and foreclosures are finally being flushed out of inventory and that more buyers are turning to normal homes."

"Nevertheless," continues Baker, "normal homes must be priced so that they are competitive with nearby foreclosure and short sales. Realtors -- with their in-depth knowledge and access to current and historical local market data -- are ideally suited to advise sellers on setting an appropriate price that will generate interest among buyers."

The overall median price of Orlando homes has jumped 15.79 percent over February 2011's median price of $95,000, to $110,000. In addition, that median price is 1.85 percent higher than that recorded in January.

The February 2012 median prices of both bank-owned sales and short sales increased in comparison to February 2011: bank-owned sales by 8.11 percent (from $74,000 to $80,000) and short sales by 5.26 percent (from $95,000 to $100,000). The median price of normal sales, however, decreased by 3.23 percent in February 2012 (from $155,000 to $150,000).

The average interest rate paid by Orlando homebuyers in February was 3.92 percent. This average interest rate is the lowest since ORRA began tracking the statistic in January of 1995. (The previous low was in December 2011, when it was 3.99 percent.) A year ago, homebuyers paid an average interest rate of 4.88 percent.

Homes of all types spent an average of 96 days on the market before coming under contract in February 2012, and the average home sold for 93.14 percent of its listing price. In February 2011 those numbers were 99 days and 94.57 percent, respectively.

Pendings

Pending sales - those under contract and awaiting closing - are currently at 9,348. The number of pending sales in February 2012 is 1.36 percent higher than it was in February 2011 (9,223) and 7.34 percent higher than it was in January 2012 (8,709).

Short sales, which take much longer to process from contract to close, made up 69.84 percent of pending sales in February 2012. "Normal" properties accounted for 17.02 percent of pendings, while bank-owned properties accounted for 13.14 percent.

Affordability

The uptick on median price has led to a decrease in Orlando's affordability index: the February index of 271.61 percent is almost 2 percentage points lower than January 2012's index of 273.32 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 $54,245 can qualify to purchase one of 5,382 homes in Orange and Seminole counties currently listed in the local multiple listing service for $298,770 or less.

First-time homebuyer affordability in February dipped a fraction to 193.14 percent from last month's 194.36 percent. First-time buyers who earn the reported median income of $36,887 can qualify to purchase one of the 4,099 homes in Orange and Seminole counties currently listed in the local multiple listing service for $180,590 or less.

Condos and Town Homes/Duplexes/Villas

The sales of condos in the Orlando area decreased by 34.27 percent in February when compared to February of 2011 (326 to 496)).

The most (116) condos in a single price category that changed hands in February were yet again in the $1 - $50,000 price range and account for 35.58 percent of all condo sales.

Orlando homebuyers purchased 173 duplexes, town homes, and villas in February 2012, which is a 27.31 percent decrease compared to February 2011. Most (25) fell within the $120,000 - $140,000 price range; another 24 properties fell into 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 February were down by 14.20 percent when compared to February of 2011. Throughout the MSA, 2,368 homes were sold in February 2012 compared with 2,760 in February 2011. To date, sales are down 15.32 percent for all counties combined.

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

• Lake: 17.14 percent above February 2011 (369 homes sold in February 2012 compared to 315 in February 2011);
• Orange: 15.54 percent below February 2011 (1,207 homes sold in February 2012 compared to 1,429 in February 2011);
• Osceola: 27.77 percent below February 2011 (398 homes sold in February 2012 compared to 551 in February 2011); and
• Seminole: 15.27 percent below February 2011 (394 sold in February 2012 compared to 465 in February 2011).