Factors Indicate Swing Toward Market Balance

According to ORRA (Orlando Regional Realtor Assoc.), potential homebuyers who are waiting for just the right time to buy a home may need to act now because the current buyer’s market conditions probably won’t be lasting much longer. "Indicators such as the slowing pace of newly added inventory and a rising median price suggest that the real estate market is headed toward equilibrium," explains ORRA President Randy Martin, GRI. "In addition, buyers would be smart to get a jump on the spring selling season, which traditionally takes place between March and June."

The median price of homes sold by ORRA members in February was $255,000, a 6.3 percent rise over the February 2006 median of $240,000 despite a much greater level of inventory and a continued decrease in the number of homes sold. The median price in February is up from $249,900 in January of this year.

The inventory of homes available for purchase increased by a slower-paced 789 homes in February (compared to an increase of 1,729 in January) to a total of 22,055. The total inventory for February is 70 percent above that of February 2006 and reflects a 15.9-month supply at the current pace of sales. A total of 1,386 single-family exiting homes sold last month, a decline of 38.9 percent from February 2006.

Interest rates may also play a big part in a buyer’s decision to move with haste. While mortgage interest rates drifted lower during the last week of February "on the basis of new economic information suggesting a slower economy and lower inflation," according to Frank Nothaft, Freddie Mac vice president and chief economist, rates on average did nudge up from 5.91 percent in January to 5.92 percent in February.

There were 3,848 condos for sale through the local multiple listing service in February. Duplexes, townhomes, and villas accounted for 2,002 of the listings in Orlando’s inventory, while single-family homes took up the remaining 16,205.

The existing condo market is continuing its weakening trend: sales in February declined by 52 percent (from 425 in February 2006 to 206 in February 2007). The largest percentage of those condos sold last month (15.6 percent) fell within the $160,000 - $180,000 range, and another 15.4 percent fell within the $140,000 - $160,000 range.

The sales of duplexes, townhomes, and villas dropped 42 percent in February, from 197 in February 2006 to 115. Most homes of these types (26.7 percent) were sold for between $200,000 and $250,000. MSA numbers

Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) mirror that of Orlando’s core market: down by 37.2 percent when compared to February of last year. Throughout the entire MSA, 1,725 homes were sold in February 2007 compared with 2,747 in 2006.

Seminole County’s February 2007 sales dropped 42.5 percent below that of February 2006 (330 to 574), while Orange County fell 32.8 percent (898 to 1,337). Lake County saw a 34.9 percent decline in the number of sales in February 2007 compared to February 2006 (267 to 410), and Osceola County experienced a 46.0 percent drop (230 to 426).

*Information, from ORRA Monthly News