Market Pulse Report: April 2012

The Central Florida market has continued to make it difficult for buyers to find the home they want and actually get their contract accepted. Inventory is at an all time low with only 8,666 homes available for sale. It's an advantage to Seller's that have been wanting to sell their home because offers are being placed on those HOT properties at an alarming rate. I've personally experienced multiple offer scenarios at least in 5 cases just this month alone. 

I've even noticed an increase in offering above asking price just to attempt to make a more tempting offer to the seller; however, it seems the competition is thinking the same thing.

Here is the latest information on an accurate stance in today's market:

Sales

*Orlando home sales (all home types combined) in March 2012 were up 17.82 percent when compared to February of 2012 and down 10.95 percent when compared to March 2011.

*Of the 2,327 sales in March, 942 "normal” sales accounted for 40.48 percent of all sales, while 617 bank-owned and 768 short sales respectively made up 26.51 percent and 33.00 percent.

*The number of "normal” sales in March increased by 23.62 percent over March 2011, while short-sales increased 20.75 percent and foreclosures dropped 49.22 percent.

*The 9,748 homes pendings in March of this year is an increase of 2.50 percent compared to the 9,510 pendings in March of last year.

*Short sales made up 69.07 percent of pendings in March. Normal properties accounted for 17.90 percent and bank-owned properties accounted for 13.03 percent.

Median Price

*The median price of all existing homes combined sold in March 2012, $115,000, is a 12.94 percent increase from the $102,000 median price recorded in March 2011.

*The median price for "normal” existing homes sold in March is $155,000, is an increase of 3.33 percent from the median price of "normal” existing homes in March 2011.

*The median price for short sales decreased by 0.73 percent to $102,000, while the median price for bank-owned sales increased by 5.25 percent to $84,200.

Inventory

*There are currently 8,666 homes available for purchase through the MLS. The March 2012 overall inventory level is 30.85 percent lower than it was in March 2011.

*Single-family home inventory is down 31.95 percent; condo inventory is down 20.78 percent.

*The current pace of sales translates into 3.72 months of inventory supply.

*New contracts are down 15.93 percent compared March of 2011. New listings are down 18.45 percent.

Other


*Homes of all types spent an average of 97 days on the market before coming under contract in March 2012, and the average home sold for 94.83 percent of its listing price.

Renters spend 5% more than homeowners

NEW YORK – Oct. 27, 2011 – Rising rents are forcing renters to outspend homeowners on housing costs, according to a new study.

Since 2005, homeowners’ housing expenses have climbed from 31.9 percent of their household budget to 33.2 percent. In that same time period, renters’ expenses have jumped from 35.6 percent to 38.4 percent, according to the October CoreLogic U.S. Housing and Mortgage Trends.

In the last 26 years, homeowners have increased the amount they spend on household expenses by 12 percent while renters have increased it by 22 percent, according to the study.

Earlier this month, Capital Economics economists noted that for the first time in 30 years the median monthly mortgage payment is about the same – or less – than the median rental payment.

Yet, with the bleak job market, homeownership rates continue to fall in many parts of the country, particularly among younger generations. CoreLogic found in its report that the homeownership rate for the 25-to-34 age group dropped from 51.6 percent in 1980 to 42 percent in 2010. For the 35-to-44 age group, homeownership rates fell from 71.2 percent to 62.3 percent over that period.

Source: “Renters Outspend Owners on Housing,” RISMedia (Oct. 25, 2011) and Capital Economics

© Copyright 2011 INFORMATION, INC. Bethesda, MD

Market Pulse Report: September 2011

 

Orlando Market Overview

• Of the 2,342 sales in August, 968 “normal” sales accounted for 41.33 percent of all sales, while 610 bank-owned and 764 short sales made up 58.67 percent.
• The 9,502 homes pending closing in August of this year is an increase of 6.23 percent compared to the 8,945 pendings in August of last year.
• Condo sales in the Orlando area decreased by 41.43 percent in August when compared to August of last year. Duplex, town home, and villa sales increased 1.34 percent.
• The median price of all existing homes combined sold in August 2011, $115,000, is a 15.12 percent increase from the $99,900 median price recorded in August 2010.
• The median price for “normal” existing homes sold in August is $155,000, a decrease of 6.57 percent from the median price of “normal” existing homes in August 2010. The median price for bank-owned sales is $81,750 and the median price for short sales is $96,950.
• The Orlando affordability index increased to 247.95 percent in August. First-time homebuyer affordability in July increased to 176.32 percent.
• Homes of all types spent an average of 101 days on the market before coming under contract in August 2011, and the average home sold for 95.05 percent of its listing price.
• The current pace of sales translates into 4.29 months of supply.
• There are currently 10,055 homes available for purchase through the MLS. The August 2011 inventory level is 39.19 percent lower than it was in August 2010.
• Orlando’s condo inventory is 51.84 percent lower than it was in August 2010.

Now is a good time to buy a house in Orlando because…

• Although many try to forecast when prices will hit bottom, the truth is that no one can predict the bottom of any market until it has already happened.

• Even within the Orlando market, different areas will “bottom” out at different times. Price fluctuations within each area of the Orlando market also differ.

• Buyers who hold off purchasing a home because they are waiting for prices to fall further may miss out on the home that they really want. The inventory of homes available for purchase, especially condos, is on a steady decline.

• Home prices have moderated, interest rates are at 40-year lows and the supply of homes for sale is plentiful. However, inventory has decreased by almost 60 percent since this time three years ago.

• Currently, about 58 percent of Orlando homes sales are foreclosures and short sales, which are typically priced much lower than “normal” homes. These types of homes sales continue to put downward pressure on the reported median or average sales price.

• Low interest rates, coupled with price declines, give trade-up buyers a unique opportunity to take advantage of market conditions. What an owner may lose on the sell side can be more than recovered on the buy side.

Florida Market Overview

• Sales, existing single-family: 15,517 in July 2011 (12 percent increase compared to July 2010).

• Sales, existing condo: 6,619 in July 2011 (12 percent increase compared to July 2010).

• Median price, existing single-family: $136,500 in July 2011 (1.00 percent decrease compared to July 2010).

• Median price, existing condo: $90,000 in July 2011 (4 percent increase compared to June 2010).

National Market Overview

• Sales, existing single-family: 4.12 million in July 2011 (21.5 percent decrease compared to July 2010).

• Sales, existing condo: 550,000 in July 2011 (17.3 percent decrease compared to July 2010).

Rental market: Sweet spot in real estate

WASHINGTON – Sept. 8, 2011 – The rental market is continuing to heat up and can offer potentially big returns for buyers willing to jump into the landlord role.

For investors looking to take advantage of low record-reaching mortgage rates and big discounts on home prices, the opportunities are plenty. Rents are rising and demand is up too, partially due to the 4 million former homeowners who’ve faced a foreclosure and are now renters.

In response, more homes are turning into rentals: Nearly 35 percent of occupied homes were rented in 2010, which is a 33.8 percent increase from 2000, according to a recent study.

In more than 500 cities, demand for rentals has increased, with vacancies for rental housing reaching its lowest level since 2003, according to U.S. Census data. Plus, rents are on the rise too: Nationwide, rents increased 11.6 percent in 2010 to $1,320 a month, on average, according to Hotpads.com, a real estate research firm.

Investors are buying rental properties with the intention to hold onto it for a longer time too: On average, investors say they plan to hold onto the property for 10 years before selling, according to a survey by the National Association of Realtors®.

“Whereas leverage is dangerous when buying stocks, [buying a rental] can be a good long-term strategy with real estate,” real estate investor Marshall Sonenshine told Money Magazine.

Experts suggest the wisest move for investors is buying a property near their permanent residence and sticking to buildings with four units or fewer to avoid stricter financing requirements, such as larger downpayments and higher mortgage rates. Also, experts say rental income should cover at least the mortgage payments on the property as well as an extra 20 percent cushion to pay for any repairs, property management or get you through any vacancies.

Source: “Cashing in on Rental Property,” Money Magazine (Sept. 2, 2011)

© Copyright 2011 INFORMATION, INC. Bethesda, MD (301) 215-4688

Condo sales are up!

Florida’s existing home, condo sales up in 2Q 2011

NAR: Second quarter metro area prices mixed

ORLANDO, Fla. – Aug. 10, 2011 – Florida’s existing home and existing condo sales experienced an upswing in the second quarter of 2011 compared to the same period a year earlier, according to the latest housing statistics from Florida Realtors®. Existing home sales rose 1 percent in 2Q 2011 with a total of 52,421 homes sold statewide; during the same period the year before, a total of 51,973 homes changed hands according to Florida Realtors. Statewide sales of existing condos in the second quarter rose 14 percent compared to the year-ago sales figure.

Statewide home and condo sales in the second quarter also increased over 1Q 2011’s sales figures, Florida Realtors’ records show. For 2Q 2011, statewide sales of existing homes rose 17.7 percent over the previous quarter’s activity; statewide existing condo sales increased 8.1 percent over the 1Q 2011 level.

The statewide existing-home median sales price was $134,600 for the three-month period; in 2Q 2010, it was $141,500 for a decrease of 5 percent. However, the 2Q 2011 statewide existing-home median sales price was 8.9 percent higher than the 1Q 2011 figure. The median is a typical market price where half the homes sold for more, half for less.

Looking at Florida’s housing sector in the second quarter of 2011, Dr. Sean Snaith, director of the University of Central Florida’s Institute for Economic Competitiveness, noted positive signs for a strengthening recovery. “Florida Realtors second quarter housing data shows that momentum in sales of both single family homes and condominiums continues to build, while median sales prices have also increased from first quarter to the second,” Snaith said.

“The fate of the housing market in Florida is tightly bound to that of the labor market,” he said. “They are like economic conjoined twins – improvement in one will invariably help the other. More jobs and lower unemployment will slow foreclosures as well as build the pool of potential buyers; both of these will work to help support prices. As single-family home and condo prices stabilize, the wealth effect of this will make owners more willing to spend, which in turn could boost hiring.”

Snaith added, “This may sound like a classic ‘chicken and the egg’ scenario, but as far as Florida’s economy is concerned, it doesn’t matter which comes first.”

In the year-to-year quarterly comparison for existing condo sales, 25,263 units sold statewide in the second quarter compared to 22,137 units in 2Q 2010 for a 14 percent gain. The statewide existing-condo median sales price was $94,700 in the second quarter; a year earlier, it was $96,400 for a 2 percent decrease. However, the 2Q 2011 statewide existing-condo median sales price was 17.3 percent higher than the 1Q 2011 figure.

Low mortgage rates were another favorable influence on the housing sector. According to Freddie Mac, the national commitment rate for a 30-year conventional fixed-rate mortgage averaged 4.66 percent in 2Q 2011; one year earlier, it averaged 4.91 percent.

© 2011 Florida Realtors®

Housing expected to improve!

I know many people have concerns when it comes to the real estate market, but here’s an article that came out just yesterday. I know it’s been said many times this year, but interest rates are at historical lows and it has never been a better time to buy. When it comes down to it, purchasing a home is about stability, security, and/or investment.

Housing expected to improve over last year

WASHINGTON – July 19, 2011 – The U.S. housing market, aided by a recovering rental sector, is unlikely to experience a “double-dip” setback, Freddie Mac said Monday.

In its U.S. Economic and Housing Market Outlook for July, the Federal Home Loan Mortgage Corp. said housing likely will follow the performance of the overall economy for the rest of 2011. Additionally, home sales are projected to be above last year’s numbers by 3- to 5 percent.

The report also indicated that despite record levels of homebuyer affordability and historically low mortgage rates, households were concerned about their financial futures and were holding off making major purchases, notably homes.

The rental housing market showed the clearest signs of a turnaround with the apartment property price index showing a 15.2 percent gain over the year through the first quarter of 2011.

“Following June’s labor market report, households are naturally concerned about their financial futures, which is being reflected in the housing market,” said Frank Nothaft, Freddie Mac’s vice president and chief economist. “Yet, the single-family market will likely improve over the balance of 2011, in keeping with positive [gross domestic product] forecasts for the United States.”

Copyright © 2011 United Press International Inc.

Orlando Ranks #4 for Rentals

Wall Street Journal just released the following article:

July 11, 2011, 11:53 AM ET

The Top Markets for Rental-Home Investors

Housing markets that have seen the biggest plunges on home values have topped a new ranking of the best markets for rental-property investors.

Las Vegas, where home prices are down by more than 50% from their market peak, offers the best returns on homes maintained as rental properties, according to the report from HomeVestors of America, a property-investment firm, and Local Market Monitor, a real-estate data firm.

The ranking takes into account the potential home-price appreciation and gross rents to forecast the performance of rental properties, specifically single-family homes that are rented out.

Rounding out the top five markets are perennial economic trouble-spots Detroit and Warren, Mich. along with housing boom-to-bust cities Orlando, Fla., and Bakersfield, Calif. Home prices in those markets have fallen below their 2000 levels, creating opportunities for investors to compete with existing housing stock.

But those markets also carry sizeable risks for investors, including the prospect of continued home price weakness. Vacancies are also high—rental vacancies are at 12% in Las Vegas at 19% in Detroit—underscoring the need for job growth to pick up.

The survey comes amid fresh signs that the rental investor is increasingly dominating hard-hit markets. Home price declines first began attracting big investor activity two years ago. Many buyers looked to buy distressed homes at a discount in foreclosure auctions from banks before fixing them up and reselling them quickly.

But faced with increased competition from other home flippers, investors have increasingly turned to buying homes that they can rent out for a few years. Those sales are far more sensitive to price, requiring deeper discounts to ensure that the rental income can cover the cost of property upkeep.

Total Las Vegas home sales hit a five-year high in May, according to DataQuick, a real-estate data firm, with the market fueled by low-priced homes that can most easily be converted to rentals. Around four in 10 sales went for less than $100,000, up from three in 10 sales last year.

According to DataQuick, home re-sales activity hit a six-year high for the month of May in Phoenix, which ranked as the seventh best rental-return market in the HomeVestors analysis. Like Las Vegas, nearly 40% of sales went for less than $100,000, and absentee buyers accounted for around 45% of all purchases.

Other top rental markets, according to the survey, included Tampa, Fla.; Ft. Lauderdale, Fla.; Rochester, N.Y.; and Stockton, Calif.

Top 10 markets for rental-property investors

1. Las Vegas

2. Detroit, Mich.

3. Warren, Mich.

4. Orlando

5. Bakersfield, Calif.

6. Tampa-St. Petersburg

7. Phoenix

8. Ft. Lauderdale, Fla.

9. Rochester, N.Y.

10. Stockton, Calif.

(Source: HomeVestors/Local Market Monitor)