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February 16th, 2010 8:35 AM by David W. Welch
CNN Money looked at 330 metro areas and compared their values today with where they were back in 2006. Some people might be surprised to find Orlando in the undervalued column, but I am not. CNN Money found Orlando to be undervalued by 17.1% at $141,200. Again, I agree with their assessment that we are currently a bargain, but I have no idea where the value came from. It says they are looking at 2010, but we are only in mid February. I am not writing this is to argue about their numbers, just disclosing that I have no idea what their methods were in deriving them. The report was actually compiled by IHS Global Insight and PNC Financial Services using median prices, local interest rate, income, population density and "historical premiums or discounts." Our median price in Orlando in January was about $102,000 and for all of 2009 it was around $125,000, so I still am unsure where the $141,200 came from.
Based upon their suggestion that Orlando is 17.1% undervalued, our true value should be around $170,000. I don't believe it is any coincidence that the median price of our "normal" sales is in the $170's. This supports one of my thoughts that prices could take a pretty good swing upward once employment begins improving. Don't get too excited yet. There are currently over 6,000 short sales and about 1,700 REO's active right now, plus another 7,500 pending distressed sales. About 70% of the closed sales so far in January and February have been distressed properties. As long as there are bargains available, they will sell first. That does not mean you can sit and wait, because interest rates play a big part in overall affordability, and they are very likely to go up. I hope lots of people read this article, and take a look down the list to see what a bargain Orlando is.
Orlando Real Estate, David Welch Real Estate Optimist, As Seen on HGTV's House Hunters