Orlando home prices rise in May as sales and inventory tumble
The inventory of homes available for purchase in the Orlando area dropped to its lowest point this year in May, dampening sales at the time when buyers traditionally ramp up their efforts to secure and move into a new home in time for the start of school. That demand is continuing to squeeze prices upward.
The overall median price of Orlando homes (all types combined) sold May is $234,000, which is 7.3% above the May 2017 median price of $218,000 and 1.7 percent below the April 2018 median price of $238,000.
Year-over-year increases in median price have been recorded for the past 83 consecutive months; as of April 2018, the overall median price is 102.60 percent higher than it was back in July 2011.
The median price for single-family homes that changed hands in May increased 8.5 percent over May 2017 and is now $255,000. The median price for condos increased 6.1 percent to $125,250.
The Orlando housing affordability index for May is 126.45 percent, up a bit from 126.13 last month. (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.)
The first-time homebuyers affordability index increased to 89.92 percent, from 89.69 percent last month.
Sales and Inventory
Members of ORRA participated in 3,407 sales of all home types combined in May, which is 11.4 percent less than the 3,845 sales in May 2017 but 1.1 percent more than the 3,371 sales in April 2018.
We are experiencing an unusual market filled with buyers who want to buy but sellers who don’t want to sell out of concern that there is no place for them to go, Many would-be sellers aren’t moving because they worry about finding another home to buy in such a tight-inventory environment. In addition, the median length to stay in a home by recent sellers has now swelled to 10 years (historically, it was about six to eight years), which is further reducing inventory turnover.”
Homes of all types saw sales declines in May. Sales of single-family homes (2,657) in May 2018 decreased by 12.4 percent compared to May 2017, while condo sales (410) decreased 3.1 percent year over year but actually increased 12.6 percent compared to last month.
Sales of distressed homes (foreclosures and short sales) reached 120 in May and are 70 percent less than the 282 distressed sales in May 2017. Distressed sales made up just 3.5 percent of all Orlando-area transactions last month.
The overall inventory of homes that were available for purchase in May (7,486) represents a decrease of 14.7 percent when compared to May 2017, and a 3.3 percent decrease compared to last month. There were 10.5 percent fewer single-family homes and 25.4 percent fewer condos.
Current inventory combined with the current pace of sales created a 2.2-month supply of homes in Orlando for May. There was a 2.8-month supply in May 2017 and a 2.3-month supply last month.
The average interest rate paid by Orlando homebuyers in May was 4.64, up from 4.51 percent the month prior.
Pending sales in May are down 11.4 percent compared to May of last year and are down 7.4 percent compared to last month.
Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in May were down by 13.7 percent when compared to May of 2017. Year to date, MSA sales are down by 2.2 percent.
Each individual county’s sales comparisons are as follows:
*Lake: 10.6 percent below May 2017;
*Orange: 12.7 percent below May 2017;
*Osceola: 15.1 percent below May 2017; and
*Seminole: 17.1 percent below May 2017.