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November 9th, 2009 9:13 AM by David W. Welch
Orlando real estate prices have been very stable for seven months now bouncing along the bottom between $125,000 and $135,000 since April. With the big push by first time home buyers to get into a home before the November 30th tax credit deadline, I am expecting prices to take a tumble this month. First time home buyers purchase less expensive homes for the most part, so I expect prices to be a bit lower in November and probably December. Looking at the pending inventory of nearly 9,000 homes, there are 3,775 that are expected to close this month with a median list price of $124,500. There are a couple of factors to consider though. First, 3,775 will not close this month. Looking at recent history, we can probably expect about 2,000 of them to close including the 250 or so that have already closed. The other consideration is the role short sales will play regarding prices. A lot of the ones that will not close are short sales which have much lower prices than "normal" sales. However, the short sale prices are typically much higher than the REO's. In the end it has typically been a wash with short sale prices hovering just below the overall median price.
With the list price running at $124,500, I expect our median sales price to be around $120,000 this month. While the impending end of the tax credit might have accounted for more lower priced sales this month, the extra competition for well priced homes likely pushed offers closer to the asking price. With the extension of the tax credit, I suspect many of these sales will end up closing in December as the urgency to close by November 30th wanes. With the extension and expansion of the tax credit, I am expecting the tremendous demand continuing well into next year. Until hiring picks up though, look for our prices here in Orlando to stay in a very affordable range. I do believe that we will see a slight tick up in hiring in the first quarter. I believe we may already be seeing a little improvement in hiring this quarter, but nothing to get too excited about yet.
By the way, watch for me on HGTV's House Hunters this Thursday November 12th at 9:00pm. Check your local listings.
Orlando Real Estate, David Welch Real Estate Optimist