Increase in "normal" home sales drives increase in median price
Posted by
at 10:23 AM on Monday, July 11, 2011
Increase in "normal" home sales drives increase in median price
(June 13, 2011 – Orlando, FL) The percentage of “normal” sales — those that are neither bank-owned nor short sales — has risen for the fourth month in a row and in May made up 37.47 percent of all transactions involving members of the Orlando Regional REALTOR® Association.
ORRA began separating “normal” sales from bank-owned and short sales in May of 2009. Since that time, “normal” sales were at their highest point in July 2009 (58.00 percent) and their lowest point in January 2011 (24.84 percent).
The higher selling prices of “normal” homes are helping to boost Orlando’s overall median price, which in May increased 4.76 percent to $110,000 from the $105,000 posted in April. The overall median price has increased each month since January 2011; the May 2011 median is now only 4.35 percent lower than it was in May 2010 ($115,000).
The lower median price of foreclosures and short sales — which made up 62.53 percent of all sales in May — does continue to negatively influence the overall median price. The median price for bank-owned sales in May is $80,000 and the median price for short sales is $102,900. The median price for “normal” existing homes sold in May is $155,000.
The 2,367 sales transactions that were completed in May 2011 is 14.95 percent less than were completed in May 2010, which was on the heels of the federal homebuyer tax credit. At the current pace of sales, there is a 4.63-month supply of homes (lowest since December 2005).
The number of sales transactions, plus a decrease in the number of new listings, has resulted in yet another drop in the inventory of homes available for purchase. Inventory declined by 511 homes (4.45 percent) during the month of May and now rests at 10,969. (Year to date, overall inventory is down 31.28 percent from this time last year; single family home inventory is down 24.99 percent; and condo inventory is down 55.10 percent.)
Pending sales – those under contract and awaiting closing – are at currently their highest point (10,210) since May of 2010 (10,351).
“Our market indicators are pointing toward the existence of pent-up demand, which is caused in part by the current difficulties in securing a mortgage,” explains ORRA Chairman of the Board of Directors Mike McGraw, McGraw Realty Services, PL. “Lenders and bank regulators need to be mindful of the historically low default rates among mortgage borrowers of the past two years. We simply have to get back to sound, common-sense lending standards to provide mortgages to creditworthy borrowers who are buying homes well within their means.”
Homes of all types spent an average of 104 days on the market before coming under contract in May 2011, and the average home sold for 94.95 percent of its listing price. In May 2010 those numbers were 83 days and 94.75 percent, respectively.
The area’s average interest rate decreased in May 2011 to 4.66 percent, from the 4.89 percent posted in April 2011.
Affordability
The Orlando affordability index decreased to 246.47 percent in May. (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 $53,732 can qualify to purchase one of 8,061 homes in Orange and Seminole counties currently listed in the local multiple listing service for $271,115 or less.
First-time homebuyer affordability in May decreased to 175.27 percent from last month’s 178.61 percent, which can be attributed in part to the increase in median price. First-time buyers who earn the reported median income of $36,538 can qualify to purchase one of the 5,677 homes in Orange and Seminole counties currently listed in the local multiple listing service for $163,874 or less.
Condos and Town Homes/Duplexes/Villas
The sales of condos in the Orlando area (428) decreased by 33.23 percent in May when compared to May of 2010 (641).
The most (195) condos in a single price category that changed hands in May were yet again in the $1 - $50,000 price range and account for 45.56 percent of all condo sales. Low-priced units have overwhelmingly dominated condo sales since March of 2009, although the number of sales in this category has decreased each month since January.
Orlando homebuyers purchased 212 duplexes, town homes, and villas in May 2011, which is a 17.83 percent decrease from May 2010, when 258 of these alternative housing types were purchased. Most sales (34) were $50,000 or below.
MSA Numbers
Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in May were down by 12.82 percent when compared to May of 2010. Throughout the MSA, 2,925 homes were sold in May 2011 compared with 3,355 in May 2010. To date, sales in the MSA are up 2.30 percent.
Each individual county’s monthly sales comparisons are as follows:
Lake: 14.73 percent below May 2010 (359 homes sold in May 2011 compared to 421 in May 2010); Orange: 14.99 percent below May 2010 (1,560 homes sold in May 2011 compared to 1,835 in May 2010); Osceola: 4.93 percent below May 2010 (521 homes sold in May 2011 compared to 548 in May 2010); and Seminole: 11.98 percent below May 2010 (485 sold in May 2011 compared to 551 in May 2010).
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The source of the listing data is as follows:
My Florida Regional MLS (updated 5/22/12)
