Market update 10/20/06

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My weekly update is all about you providing firsthand information from the trenches about the greater Orlando housing market and as it relates to you selling your home at maximum profit.

At first sight, the WDBO News sounded great, but you have been hearing my opinion for many months now and maybe you are as confused as I am regarding the housing market and the associated frustration and where we are going. My husband was at a meeting in Sacramento, California for just about 4 hours (long flight for just 4 hours) but is was about what to do for sellers in a declining real estate market. Here is the headline in the Wednesday Sacrament Newspaper:

House Prices Slump Deepens

I am sure you have heard about, what happens on the West Coast will come across the country. We followed the price appreciation of the West Coast and if this holds true we are going to follow the down turn.  Click Here there is a National Outlook by Kiplinger Forecasts

As I was driving to an appointment today I listened to talk radio 580 WDBO and as the announcer happily reported, Orlando’s home inventory decreased by 3% over prior month, suggesting the pressure on prices is over and we can continue the insanity of last year. Hold, not so fast, lets see what is really up. So, I looked at the MLS (the Multiple Listing Service of the Orlando Regional Realtor Association) to see what my numbers are saying.

So, here is the truth.

Active home listings in Seminole, Orange, Lake and Volusia County (the report you have been hearing about is about Orange, Lake, Seminole and Osceola Counties) have again increased over prior week by 200 units, pending units are up over prior week by 200 units, but shows a 100 unit decline over 2 weeks ago. Last year same period we closed 3271 units vs. 2159 units this year, so there is a 33% decline in sold units.  Still, a pretty grim outlook for people who want to sell. It is still my strong recommendation, if you must sell, price your home as the best value in your neighborhood and area. If you can rent your home, rent it out for the next 2 years and we will see an increase in demand.

Here is what the Orlando Sentinel reported today.

Supply of homes on market takes dip

But as you read further here is what one of the Winter Spring Coldwell Banker Agent had to say.

 “Agents are having to work harder or smarter in this slowing market, and successful sellers are definitely cutting prices, said Beth Goldstein, a Realtor with Coldwell Banker Residential Real Estate's Winter Springs office." If you really want to sell your house, you've got to price below appraisal and probably 10 percent below the last [comparable] sale in your neighborhood," she said. "A lot of sellers are still not accepting that change."

Here is what the Orlando Board of Realtors has to say about the market.

Home values hold steady;
pace slows for new inventory 

(October 19, 2006 – Orlando, FL) The value of homes in the Orlando area continues to hold steady despite a drop in the number of sales taking place, according to the Orlando Regional Realtor® Association. The median price of homes sold in September was $250,000, a 2.5 percent rise over September 2005’s $243,900 median, while the inventory of homes on the market went down for the first time since April 2005. A total of 1,965 existing homes changed hands in September, while the average mortgage interest rate in the Orlando area dropped again for the third month, to 6.09 percent. Racing home values, while delightful for homeowners who coincidentally were ready to sell last year, can actually be detrimental to the long-term health of a housing market. “Slow, steady increases in home values are favorably viewed by the relocating companies; relocating individuals; domestic and foreign second-home buyers; and retirees that drive sales in Orlando,” observes ORRA President Beverly Pindling. “Plus, Orlando in particular, with its large population of service-industry employees, needs housing values that do not price this segment out of homeownership.” A study by ORRA last year predicted that Orlando area home price appreciation would continue to rise at an above normal rate and that its market was in excellent shape for housing equity gains, particularly for homebuyers who plan to remain in their houses for the long run. Also indicated in the study: Price declines in the Orlando market are unlikely according to a “stress test” applied by the study’s researchers. In fact, a price decline of 5 percent will occur only under extremely unlikely scenarios. For example, mortgage rates rising to 10.5 percent in combination with local job losses totaling 64,000 could lead to a price decline of 5 percent.

Scenarios that could cause a decline are highly unlikely. Most credible forecasts predict the Orlando area will create at least 60,000 jobs over the next 24 months and mortgage rates will hover around 7 percent by the end of 2006, which bodes well for future price gains. Even in the unlikely event of prices declining by 5 percent, most homeowners will maintain equity build-up in their homes. Housing equity will most likely continue to accumulate to local homeowners. With credible inflation forecasts pegged at 2.5 percent, home prices can expect to rise by 4 percent per year under normal circumstances (year to date, Orlando’s median home price has increased by 6.93 percent). Year-to-date sales of homes — 21,617 — in the Orlando area have dipped below 2005’s red-hot record-breaking market, with 8.66 percent fewer homes sold through September. But Pindling notes that Orlando’s housing market is still on target to post its second-best year ever, behind 2005 and in front of 2004. The inventory of homes dropped by 3.3 percent — or 758 homes — from August to September for a total of 20,319 homes currently on the market. The pace of new inventory has also slowed, with 6,297 homes added to the Realtors® shared listings database last month. In August, 7,039 newly available homes were entered into the database. So far this year, 59,707 homes have gone on the market, compared to 33,730 this time in 2005. ned, these two categories accounted for 899 of the 2,336 transactions in September.

Here are some of my very simple selling rules.

• Not at least 10 showings in 30 days, your home price is being rejected.
• 10 showings in 30 days but no contract, your home is being rejected on price.
• No showings at all your home price is being rejected by buyers and agents.

 “NEW” Orange County Condo update:

The condo situation all over Orlando is not pretty, with a major bankruptcy being reported  by a large converter: MAIN STREET USA, INC.

 New Condo Website, Click here

The area marked in red shows inventory availability of over 12 month.