Orlando Home Prices Hit 13 Year Low

Orlando HousesPrices of homes in Florida are at their lowest for 13 years. Figures out this week from the Orlando Regional Realtor Association show that Orlando’s median home price in January 2011 sank to $94,950 – its lowest level since November 1997.

Cheap cash deals are driving more than half the sales. The Orlando Sentinel reports: “Usually a drop in prices means a boost in sales, but January’s total was down sharply from December, which is the historical pattern. Only 1,950 sales were recorded for the month by the local Realtors group, down 21 percent the previous month and the slowest month in a year.

“A record 75 percent of January’s closings were distress sales, either foreclosures (bank-owned properties) or short sales (with prices less than the mortgage owed). That was the highest proportion of cut-rate properties since January 2010, when 72 percent of all sales involved distress properties. Since the Orlando association began tracking distress sales in May 2009, the core market’s distress-sale low was 42 percent in July 2009.

Bill Cowie, director of Anglo/USA realtors British Homes Group which specialises in helping Florida property buyers from the UK says: “We keep saying that Florida prices are at or near rock bottom but these figures show that prices have continued to fall. For the cash-rich investor, it is all about whether it will be possible to accurately predict the absolute bottom of the market and when to re-enter it. To have a situation where house prices are back to 1997 levels is in itself unprecedented and a superb opportunity to buy into some quality real estate in superb locations.

“The number of houses on the market actually declined slightly from December to January and has now shrunk for six months in a row. This is a good indication that the supply is tailing off.

“Tourism is still flourishing and the rental market is still strong and we are finding that overseas buyers who want to let their properties to holidaymakers keen to experience the Orlando theme parks and Florida beaches can often cover their costs of ownership.

“Therefore canny investors and lifestyle purchasers need to only do the numbers to see that much of this cut-price real estate in Florida is at a level which makes sense financially on all levels. Don’t wait too long only to find rock bottom has already been and gone and prices are once more moving upwards to reflect the real value of these beautiful homes.”

Orlando Home Price Graph
The Orlando area’s median home price in January was less than $95,000 — the lowest midpoint for sales in more than 13 years. (KAREN BELLVILLE BEAMAN, ORLANDO SENTINEL / February 14, 2011)

The Orlando Sentinal continues: “For homebuilders, the foreclosure-driven bleeding in median price continues to pressure the new-home market, said Brad Hunter, an economist for MetroStudy Inc.

“The inventory of foreclosure homes definitely remains a problem, both in terms of price pressure and builders’ sales paces,” he said. “Most builders I talk to say that their main competition comes from homes being sold off by banks, instead of [by] other builders.”

Hunter said he expects the price pressure to continue defining the market through 2011, with some “pockets of strength” where homebuilders will be able to gradually raise prices and sell homes.

Within the larger, four-county Orlando metropolitan area, the number of existing-home sales in January was up everywhere from a year earlier except Lake County: Orange was up 10 percent, Osceola was up 32 percent and Seminole was up 27 percent, while Lake was down 6 percent.

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