Wave of pipeline sales buoys Orlando market

ORLANDO - Members of the Orlando Regional Realtor Association in May sold nearly 38% more homes than in May of last year, contributing to the area’s year-to-date sales increase of 44%.

There were 1,854 closings in May, which brings the year’s total to 7,834; a total of 5,462 homes had changed hands by this time last year. Of those May sales, 50.97% of the homes were either bank-owned (795) or distressed (150). The remaining (909) “normal” sales made up 49.03%.

Bank-owned and distressed home sales have an influence on Orlando’s reported median price. The median price of all Orlando homes sold in May is $130,000 (a 38.51% decrease compared to May 2008), but the median price for normal sales is $165,000. The median price for bank-owned sales is $82,000, and the median price for distressed sales is $140,000.

“There are two levels of pricing in the current market,” explains ORRA President Les Simmonds, L.G. Simmonds Real Estate Corp. “Traditional homes in good condition have held their value much better, so owners shouldn’t be overly concerned about median prices. Most sellers can expect a good return if they’ve been in their homes for a normal period of homeownership and haven’t excessively tapped their equity.”

In addition to an increase in completed sales in Orlando, there is more than double the number of homes currently awaiting closings (6,603) than in May of last year (3,225). Those pending sales, of which 3,455 are homes that came under contract in the month of May alone (the most in one month this year), are forward-looking indicators of an improving market.

The area’s average interest rate increased in May to 4.90%, up from 4.86% in April and 4.67% in March. This historically low interest rate contributes to Orlando’s affordability index, which continues to hover near the 200% mark, 197.65% to be exact.

An affordability index of 99% means that buyers earning the state-reported median income are 1% short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is more than 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 $52,364 can qualify to purchase one of 10,609 homes in Orange and Seminole counties currently listed in the local multiple listing service for $256,939 or less.

The first-time homebuyer affordability in Orlando is currently 140.55%. First-time buyers who earn the reported median income of $35,608 can qualify to purchase one of 6,517 homes in Orange and Seminole counties currently listed in the local multiple listing service for $155,306 or less.

Homes of all types spent an average of 104 days on the market before being sold in May 2009, and the average home sold for 94.19% of its listing price. In May 2008 those numbers were 115 and 93.83%, respectively.

An equal number (149) of single-family homes sold in three price categories in May 2009: $120,000-$140,000, $140,000-$160,000, and $200,000-$250,000, which is the price range where most sales traditionally fall. On the far ends of the scale, seven homes were sold for $1 million or more while 97 homes sold for less than $50,000.

Inventory

There are currently 19,123 homes available for purchase through the MLS. Inventory decreased by 1,071 homes from April 2009, which means that 1,071 more homes left the market than entered the market. Compared to last year, the May 2009 inventory level is 23.55% lower than it was in May 2008 (25,015).

The inventory level reflects a 10.31-month supply at the current pace of sales, which is down a bit from the 10.89-month supply recorded in April 2009 down significantly from the 18.57-month supply recorded in May of last year. Altogether, inventory months-of-supply has declined 52.14% since January 2009.