Orlando sees first year-over-year uptick in home prices since 2007
By Mary Shanklin, Orlando Sentinel
10:25 p.m. EDT, August 12, 2011
For the first time since Orlando's housing market began to tank four years ago, the area's median home price showed an increase from a year earlier, according to the July sales report released Friday by the Orlando Regional Realtor Association.
The median price for an existing, single-family home in July was $117,000, up from $110,000 the previous month. The local real-estate industry noted that prices have increased 23 percent from the beginning of the year.
Not only did prices increase from the previous month, they were 7 percent higher than a year ago, the first time since 2007 that local prices showed any gain from a year earlier, association data shows. The last time Orlando prices increased from a year earlier was in July of that year, when prices were more than double what they are now.
Prices have increased on a monthly basis occasionally in recent years, but the uptick from a year earlier is more significant in determining long-term trends, experts say.
The numbers defy national forecasts that have predicted declining Orlando home prices through early 2013, based on factors such as unemployment and homes in foreclosure or headed in that direction.
What some analysts don't take into consideration is that Orlando housing draws buyers beyond the local work force, said Roger Soderstrom, broker for Stirling Sotheby's International Realty.
"We're not gaining momentum by job creation but by informed buyers and investors," he said. "We're seeing some job relocations but it's not huge. We see more second-home buyers, pre-retirement buyers and investors. We're getting two and three referrals a week from Brazil. The Canadian dollar is strong, and the economic shakeout has put downward pressure on the dollar."
The Orlando area's price swing appears to be driven by an increase in the percentage of normal sales - transactions that are not distress properties. While those sales don't dominate the market, their numbers have grown for six straight months, with 42 percent of member sales fitting that category in July.
"With affordable prices and historically low mortgage interest rates, home buyer demand remains strong. A more rapid sales recovery is possible if banks return to normal and safe but sensible lending standards," said association Chairman of the Board of Directors Mike McGraw, owner of McGraw Realty Services PL of Apopka.
Even though prices are up, the market recovery continues to be slow because of short sales and foreclosures. The midpoint price for bank-owned sales in July was $80,000, and the median price for short sales was $98,000.
Overall, sales and listings are all down from a year earlier. The area had 2,147 sales in July, down 15 percent from a year earlier. Bank-owned sales dropped 49 percent from July 2010, and short sales increased 17 percent, indicating a possible shift on the part of lenders.
Rob Nunziata, president of FBC Mortgage, said the combination of relatively few houses on the market, affordable prices and low interest rates should continue to propel a recovery for the housing market.
"There's no reason the prices shouldn't continue to go up," Nunziata said. "They obviously are not going to spike. I think you'll see some slight appreciation."
At the current pace of sales, the area has a 4.8-month supply of homes in inventory. The number of homes available for purchase in the Orlando area declined in July by 210 homes and now rests at 10,349.
The area had 9,869 pending sales for July, less than half the pending contracts the market had a year earlier.
Homes are taking longer to sell than they did a year ago, with a median of 101 days on the market in July, up from 84 days a year earlier.
mshanklin@tribune.com or 407-420-5538
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