ORLANDO MEDIAN HOME PRICE RISES AS APRIL NUMBERS REVEAL AN EXPECTED DECLINE IN CLOSINGS
April 2020 Recap
Orlando’s housing market in April saw its median home price increase 12%, while home sales dropped 28% in the first month to show an anticipated decline in activity as a result of the COVID-19 pandemic. Inventory experienced a year-over-year decline of 3%, reports the Orlando Regional REALTOR® Association.
“Our market — like those nationwide — is grappling with the coronavirus-induced slowdown,” says ORRA President Reese Stewart, RE/MAX Properties SW. “Orlando REALTORS® anticipate listings and buying activity will eventually resume, especially given our history of demand versus low supply along with the record low mortgage rates that increase buyers’ purchasing power.”
“Although the pandemic is a major disruption in regard to sales, Orlando home prices held up in April and even increased due to the ongoing housing shortage, continues Stewart. “However, while lack of inventory in the lower-price categories will likely safeguard prices, it’s possible the upper-end market segment could experience a decline in values.”
The overall median price of Orlando homes (all types combined) sold in April is $263,750, which is 12.2% above the April 2019 median price of $235,000 and 4.0% above the March 2020 median price of $253,500.
The median price for single-family homes that changed hands in April increased 9.0% over April 2019 and is now $278,000. The median price for condos increased 5.1% to $145,000 and townhomes/villas/duplexes increased 5.6% to $225,000.
The Orlando housing affordability index for April is 136.60, down from 137.63, down from last month. (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 over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.)
The first-time homebuyers affordability index decreased to 97.14 from 97.87 last month.
Sales and Inventory
Members of ORRA participated in 2,393 sales of all home types combined in April, which is 28.1% less than the 3,329 sales in April 2019 and 25.3% less than the 3,204 sales in March 2020.
Sales of single-family homes (1,926) in April 2020 decreased by 24.0% compared to April 2019, while condo sales (249) decreased 42.5% year over year. Duplexes, townhomes, and villas (218 combined) decreased 37.2% over April 2019.
Sales of distressed homes (foreclosures and short sales) reached 61 in April and are 41.9% less than the 105 distressed sales in April 2019. Distressed sales made up 2.6% of all Orlando-area transactions last month.
The overall inventory of homes that were available for purchase in April (7,659) represents a decrease of 2.9% when compared to April 2019, and a 4.3% increase compared to last month. There were 8.7% fewer single-family homes; 6.9% more condos; and 42.4% more duplexes/townhomes/villas, year over year.
Current inventory combined with the current pace of sales created a 3.2-month supply of homes in Orlando for April. There was a 2.4-month supply in April of last year and a 2.3-month supply last month.
The average interest rate paid by Orlando homebuyers in April was 3.20%, down from 3.45% the month prior.
Homes that closed in April took an average of 47 days to move from listing to pending and an average of 39 days between pending and closing, for an average total of 86 days from listing to closing (down from a total of 91 days the month prior).
Pending sales in April are down 36.3% compared to April of last year and are down 17.1% compared to last month.
Sales Details by County
Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in April were 32.4% lower than in April of 2019. To date, sales in the MSA are down by 7.2%.
Each individual county’s sales comparisons are as follows:
*Lake: 33.5% Below April 2019 *Orange: 35.8% Below April 2019 *Osceola: 30.8% Below April 2019 *Seminole: 23.5% Below April 2019 *Polk: 34.7% Below April 2019
Is a newly built home right for you? Do you want a home that you’ve helped design and that offers the latest in energy efficiency and design? Or a previously owned home that may need fix-ups, paint jobs, and walls moved around to create the types of open spaces that make sense today?
There are a number of reasons you might prefer a resale house, even if it needs work. For instance, you may have your heart set on moving to a specific neighborhood.
So it’s understandable that some buyers prefer an existing house in an older neighborhood. But have you seriously considered the potential advantages of buying new? Here’s a quick overview of some of the important pluses of new homes to think about:
Energy Consumption/Green Building: If you care about “green” — whether that means the money you spend on energy bills every month or your concern about the environment — a newly constructed home is virtually always the better option.
Flexibility for Space and Wiring Customization: When you buy a resale house, you get what’s already there. With a new home, by comparison, you can often participate in the design of interior spaces with the builder, in advance of actual construction.
Replacement Costs: By definition, with a new house everything is new, including costly components — such as the furnace, water heater, air conditioning unit, kitchen appliances and roof, — and doors, windows, and more. In a new home, most of these components come with a warranty, sometimes for up to 10 years. Bottom Line Here: Although you — and your budgetary resources — control what you improve and when, it’s highly likely that you’re going to spend money on at least several of these capital improvements in the early years following purchase of a resale house. They are the unadvertised costs of not buying new.
Safety Features (Especially from Fires): Newly-built homes come with modern fire retardants in materials such as carpeting and insulation, unlike most existing houses. Builders also hard-wire smoke and carbon monoxide detectors into their homes, making it unnecessary for new owners to install less-dependable battery-powered detectors. Many builders also back up their hard-wired detectors with battery power to handle electrical outages.
Mortgage Financing: Builders often have mortgage subsidiaries or affiliates, and are able to custom-tailor financing — down payments, “points,” other loan fees and even interest rates — to your specific situation. Many are also willing to work with you to help defray closing costs at settlement.
Resale Value: You may plan to live in your next home many years, but at some point, most people sell a given home for any of a myriad of reasons. While the home you sell will (by definition) no longer be new, a 5-year old home will often be more desirable — given all the features above — than a 25-year old home at resale.
The decision to buy a newly built or used home is ultimately best made by each home buyer. Now you know the questions to ask, and the relative costs involved, in order to make the best decision for you.
Contract to purchase a NEW CONSTRUCTION Residential Home through Florida Realty Marketplace before June 30, 2020 we will give the BUYER up to a $2,000 REBATE at closing. *Certain Restrictions Apply- Contact us for Details
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