The Florida Association of Realtors posted July's performance numbers last week. Here are my thoughts,opinions and observations about them.
Now before I freak you out with my headline, here is what Daren Blomquist, VP with RealtyTrac, said about the Orlando real estate market in a recent article:
"There's not bad news there for Orlando," Blomquist said. "The affordability levels are still below their historical average, and that indicates there's still room for price growth, even if interest rates go up a point."-Daren Blomquist, VP of RealtyTrac
That's right! The Orlando area is still one of the most affordable areas in the country to purchase a home (yeah!) BUT one of the LEAST affordable areas for renters (boo!).
Now not everyone seems to be paying attention: (Name is withheld to protect the guilty) in a local news article in June: "I think in the next 12 months, we're going to be pretty much flat," said real-estate agent. "With some good things happening in the Orlando area, we could see prices increase 3 percent, but we will likely see the median price soften at the end of the summer."
Now July posted numbers tied for the highest median price ($171,000) for the year, almost a 13% increase from this past January and the highest average price ($214,000) for the year which is an 8% increase from January. Interest rates were at 4.17%. Twelve months earlier they were 4.51%.
Another article I read said that sales are sliding too. Hmmm, if my math is right, which a teller at my bank is smirking right now, 1,889 sales in January to 2,431 in July is a 22% increase. Now did sales slide from this time last year? Yes, of course. It's called market recovery. The big boy cash buyers like Blackstone, Colony Capital and Waypoint are slowing their (cash)roll due to pricing themselves out of their ROI and meeting their saturation levels. Did they shut out mom and pop investors and first time home buyers during this spend? Yes...BUT...they also helped increase market value. Sellers, you're welcome!
So to answer my article title, no, the end is not nigh or tomorrow nigh or next month. Will the big investors be missed? Sort of. Are lending restrictions too tight right now? Please, I'm a real estate broker! That's like asking Willy Wonka if the world needs more candy? Seriously though, maybe they could lighten up a little, but programs are there for first time home buyers and qualified home buyers. And another thing, don't think doom and gloom if you did a short sale on your last home or had a bankruptcy discharged. There are recovery programs and lending options that you will be qualified for quicker than you think AND you may even qualify for them now. E-mail me if you'd like to discuss this more.
So what's my predictions for Orlando real estate? Continued recovery through the "slow and steady wins the race" method. Hiccups here and there but Orlando, in my humble but biased opinion, is the place to be. Just look around at all the new and future building plans and community projects.
Buyers just need to understand that the $50,000 almost new homes have gone the way of the Yugo (remember those?). Communities are stabilizing, new construction can be seen in once abandoned shell communities. Home values are rising but the quality of life and community is improving as well. More conventional sellers with well cared for homes are listing their homes for sale now. Which, in turn, creates a larger pool of qualified buyers. So getting a 'deal' is more of a change in paradigm than it is a thing of the past me thinks! Now finding a deal, making a deal and closing a deal...well...those are the things that require trained,proven and experienced professional on your side. They're called Realtors and I happen to be one. Just sayin'.
But enough about my opinion. What do you think?
Thanks for reading! Stop by my website: www.SimplicityRE.com and say hi or hit me up on Facebook,Twitter, Pinterest, Tumblr, Active Rain, Word Press, Swarm, Google Plus, Instagram or LinkedIn. Wow! I need to get out more. :)
Kudos to Orange County for having the largest percentage of residential properties valued at $500,000 and above. 14 of the top 20 zip codes reside in Orange County. CLICK HERE for the list of zip code rankings. The report also has Seminole County and Osceola County with three and two zip codes in the top twenty respectively.
The report, done by Esri and reported by the Orlando Business Journal, also breaks down the zip codes by demographics. Here is the chart of demographic definitions as used and defined by Esri: CLICK HERE
Now this report is all fine and dandy but recently I was chatting with another broker over coffee and the question was posed about the inventory of #HomesForSaleInOrlando now and in the immediate future: If a seller has an attractive mortgage rate on their current home (say, obtained in the Great Recession), why would they want to sell and finance the purchase of another home at a higher interest rate? A fair question for sure and one that got me to do some thinking and research.
Recent studies by NAR (National Association of Realtors) suggests that only a small fraction of people who sell their home (approx. 10%) factor in the gain or loss of financing rates in the process of selling their home and buying another. I also found out that a third of all home owners do not have a mortgage at all!
The primary reasons why people move have everything to do with family, job and quality of life. Upsizing or downsizing because of family, a change of job location or status or just looking for a change in community and/or neighborhood, climate, etc. are the primary factors for buying a new home.
However, a new phenomena that is having somewhat of a factor on homeowners retaining their current homes is the dramatic increase in rental income. Homeowners are finding that it may be more financially beneficial to retain their old home and rent it out than it would be to sell the property out right. It should be noted that if this is an option for you, that you have an understanding of landlord/tenant responsibilities and obligations in the state of Florida or have a qualified property management company assist you. CLICK HERE for more information.
So it's a sunny day in #OrlandoRealEstate in terms of overall home values, renting properties and buying homes. Especially if you're buying new construction! Yes, we specialize in that!
If you have questions about buying or selling a home in Orlando or require property management solutions for your rental properties please CLICK HERE or call us at 866-642-2052.
Simplicity: A Real Estate Brokerage Company is a full service residential and property management company servicing the Greater Orlando Real Estate market.
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Remember your last car purchase? For most of us the response to that question is “Remember?! How can I forget?! Many times it seems like your playing poker against the house with the cards stacked against you! But what if you had to opportunity to bring into the negotiations your own auto-sales professional who knows what you want and what you can afford and protects your best interests? How much easier and less stressful would that be?! Having an advocate in your corner is a great feeling. More people might actually like to go car shopping if that was the case. Now unfortunately, as far as I know, this is not available in auto-sales but these buyer advocates are available in #RealEstate where, on average, the deals are more complicated and expensive. Yet some people still choose not to use them! Why you ask? Because for some buyers, they feel they can get a better deal if they don’t have an experienced representative protecting their interests. I know, right?
Now “ A fox in the hen house” may be too drastic an analogy but keep in mind the first word in listing agent; “listing”. That is what the agent represents as well as the seller behind the listing. Even in a transactional agent situation, where the agent has limited representation to both sides as it pertains to the transaction, the agent still has a primary familiarity with the seller that may cause some challenging relationship dynamics during the negotiations no matter how professional the agent or broker may be.
Here are some reasons why should have your own agent representing you when buying a home in #Orlando or anywhere for that matter.
Looking for a beautiful Lake Baldwin area residential community? Look no further. Baldwin Cove is offering beautiful, new construction Bungalow and Estate style homes starting at $236,00! Yes, I said $236,000!!! Enjoy luxurious master suites, 10' high 1st floor ceilings, granite countertops and spacious kitchens. Just minutes from downtown Baldwin Park and located in the much desired Winter Park school zone, this community has it all. If you're looking for that Baldwin Park feel but not the price, this community has what you're looking for. What's the catch, there's only 42 total lots and they won't last long! Contact us for details! Pictures coming soon!
OK, I'm pro-SunRail (there, I said it). I think it will keep more cars off the road and it also moves us one step closer to new jobs and new growth and opportunities, especially in the Orlando Real Estate market, but I'm a little biased. :) There are some annoyances with the system but that should be expected. How quickly SunRail corrects these issues will ultimately determine public opinion and public use. Until then, the Bungalower offers some workarounds to make your SunRail use (and eventually mine) more enjoyable.
The Orlando Regional Realtors Association (ORRA) has released the April performance numbers for Central Florida and the numbers are promising.
Total inventory of homes for sale increased slightly from March totaling out at 10,647. 4,401 new properties hit the Orlando area real estate market for April.
The average mortgage rate dropped from 4.43% in March to 4.39% in April. The median and average sold home prices stayed about that same at $163,000 and $204,000 respectively.
The average days on market also remained steady at 77 days.
The most impressive number for me was the days to close average which was 46 days. This is the average time it takes a property to close once it goes under contract. Why do I feel this is so important? Because it is an indicator of a shifting market from a pre-foreclosure market (aka: short sales) to a more conventional market. Cash buyers are still major players in the market but even cash deals are subject to long delays when dealing with short sales. This shortened time frame, almost 20 days shorter than the same time last year and the lowest in the last three years, shows signs of a recovering market in my opinion. This with the addition to the increasing inventory of new homes for sale in the Orlando market also shows me that sellers are finding the market more palatable in terms of what fair market value is for their homes.
A recovering market means recovering communities, conventional sales bring back the days of well kept, move in ready homes, home warranties and negotiations no longer on “As Is” contracts. Its a win for the seller, the buyer and the community at large. The next big hurdle, as I see it, is having the banks relax their credit restrictions a bit so that financed buyers can get back in the game. Cash buyers won’t last forever and if we want to continue our positive strides back to a healthy Orlando real estate market, financed buyers must be allowed back in to the game.
*for more information on the orlando real estate market or assistance with financing, please e-mail Rob: Rob@SimplicityRE.com
Many industry experts believe it is. Initially thought to be an anomaly, the current housing market recovery seems to be sustainable. In a recent article in DSNews, analysts for Capital Economics feel the current uptick in the housing market will remain sustainable for the foreseeable future. Though this rapid recovery took many analysts by surprise,there are several major indicators that suggest the current recovery is more than a flash in the pan.
Sustained rises in demand, home prices and homebuilding activity along with new and existing home sales demonstrate lasting recovery. These same analysts are also predicting a price growth of 5% for 2014. According to CoreLogic, the Orlando residential real estate market saw a residential median price increase of 10% in the last twelve months. The biggest threats to this continued growth, according to analysts, is the country falling in to another recession or the release of the current shadow inventory (currently estimated at 3.8 million properties, 1.5 times larger than the current number of active properties for sale) both of which seem unlikely. Concerning the shadow inventory, it would not be beneficial to the banks owning them. A flood of properties on the market and a dramatic drop in property values would not benefit anyone.
Though these major threats do not seem likely, there are larger issues to consider. The current real estate market is being sustained primarily by investors and cash buyers. According to the Florida Association of Realtors, more than half the homes purchased in Florida were cash deals. The concern here, especially with the large investors, is when property values increase, so do the deep discount opportunities that investors look for. ROI is the name of the game and when those deep gains evaporate, so does investor interest. Florida does benefit in being the most popular state for foreign investors which almost always pay cash. Financed buyers, on the other hand,have been a very small player in the national market and in the Orlando real estate market as well. Increased financed transactions and loosened credit restrictions go hand in hand. To allow the financed buyer back in the market, relaxed credit restrictions must inevitably occur.
My own personal experience for the last four years, both the Orlando and Tampa Bay markets, leads me to believe that property values and market recovery will be slow but positive. I initially was in agreement that this was just an positive hiccup in the market and when the large investors began to slow their buying pace, the market will slow as well. However, I have not seen this. What I have seen is increased buyer activity, receiving multiple offers at asking price or higher on many of my listings and an increased interest in new construction. Don’t get me wrong, there are still deals to be had out there, especially for cash buyers but they are significantly more scarce than they were two years ago.
All in all, I agree with the analysts that the market is recovering and will continue to recover. I don’t see any dramatic rise in property values in the near future but rather a more slow and steady rise to recovery.
What are your thoughts on the analysts forecast?
-Rob Sassos is the Broker/President of Simplicity: A Real Estate Brokerage Company. Simplicity specializes in residential real estate and property management in the Orlando and Tampa Bay markets.
As the new SunRail system opens, participation numbers are much larger than anticipated. How will this impact homeowners, residents and real estate investors in Central Florida?
If you have interests in Meadow Woods and you are pro-SunRail, good news is coming your way! Meadow Woods is one of the most popular communities in Orlando according to Zillow search numbers. It is also one of the best values in terms of community, location and property value in my opinion. I also feel that with the addition of the SunRail station, this community's property value will only go up. The article link is below for more information.