I hate to sound like a broken record, but I am really encouraged by what I am seeing with the pending sales. This is the best indicator of where the Orlando real estate market is going. Up apparently! Every day I check the pending sales and the number is increasing. This is an indication of where closed sales will be at the end of the month. Right now pending sales are at 1,663. This number is up by about 140 compared to the beginning of January. If the pendings continue to rise like this, we could see closed sales in the 1,100 range for this month, and 1,200 for February.
If you look back at my blog davidwelch.com/myblog over the last couple of weeks, you will see my prediction for sales in the 1,400 range by summer. The rise in pendings is actually a little better than I expected, so we may see even better sales.
It's election day here in the sunshine state. Voter's are selecting Presidential, Mayoral and other local issues. One top ballot item is the property tax amendment. This should save homestead property and non-homestead (second home and investment) property owners a little money. It does require a 60% vote to pass, and that will be tough.
In the meantime, pending sale continue to climb up to nearly 1,750 as of this morning. The median sales price of the property that has already closed this month is down a bit from last month to $220,000. The inventory of homes on the market has pushed up a bit as well to nearly 27,000. www.davidwelch.com/orlandosellers.
My economic stimulus package involves people buying homes. Quite frankly the best way to stave off the possibility of a contracting economy involves selling some homes. I have been in Orlando real estate for over eleven years now, and every single year there were economists predicting a downturn in the market. Ten out of eleven years the economists quoted in the various media have been wrong. If you give the same prediction long enough, eventually you will be right. If you want to know the reason for our current economic woes look no further than your local paper. Bad news sells. My best friend reminded me recently that economists have predicted ten of the last three recessions correctly. That is a joke, so it is OK to laugh. I believe that if the buyers that are concerned about the market would get off the fence and buy a home, our inventory would drop by a third within three months. I honestly believe there is that much pent up demand. In the meantime, pending sales are continuing to climb. I would not wait too much longer, because eventually the market will improve despite all the doom and gloom in the news. www.davidwelch.com/orlandobuyers
Pending sales keep climbing. They are over 1,700 today, and that is a significant increase from where they were just three weeks ago. In fact, that is more than a 10% increase this year. Pending sales are the best indicator of where closed sales will be at the end of the month. I have found that the closings tend to be about 2/3 of the contracts pending. So, we should look for sales close to the 1,100 range for January which is up 10% from December. If this keeps up we could see close to 1,200 sales in February. I am looking for sales in the 1,400 range by April. This just confirms what I have been saying - Buy A Home - It's OK.
www.davidwelch.com/orlandobuyers
Three weeks in to 2008 and I am working on my third contract. Two of the three are dealing with short sales and foreclosures. I am showing a home for the second time to a couple I have been working with, and it too is a short sale situation. My business is not built around foreclosures or short sales, but they are certainly impacting me right now.
So far, pre-foreclosure, foreclosure, short sale and otherwise distress situations amount to just over 10% of the Orlando real estate market. According to the MLS there are 26,495 active listings as of this morning with 2,877 advertised as pre-foreclosure, foreclosure or bank owned. The good news is that the pending sales continue to rise with 1,634 properties under contract.
www.davidwelch.com
It's going to be OK. Really, it is. The number of pending sales is continuing to climb. Slowly, but surely buyers are getting the message that this is a fantastic opportunity to purchase Orlando Real Estate. The inventory is creeping back up to pre-Christmas levels, but that is expected. I just wish there was updated information on new home inventories in our market.
Go to www.yeson1florida.com and get the facts about the ammendment on the ballot. There are four main points this addresses. First, there is a doubling of the homestead exemption. This will save the average homestead property owner in Florida about $240.00 per year. This is not a big deal to a lot of people, but it is a step in the right direction. By the way, school taxes are not impacted by this at all.
Second, limited portability is created for Save Our Homes. This will allow you to take your tax savings benefit that you have accrued to your next property. There are some limits, so check the website for more details. It's retroactive to January 1, 2007 too.
Third, a cap of 10% is placed on property tax increases for non-homestead property. Anyone who says this only protects wealth land owners forgot that tenants pay the rent. In commercial leases the tenant often have taxes passed directly to them to pay. This makes Florida less attractive to business.
Fourth, the first $25,000 of tangible property is exempted from state tax. This affect virtually every small business owner. They are the backbone of our economy.
So Vote YES on ONE!
Pending sales are climbing they are back up to 1,600 today.
It may not be earth shattering, but the number of pending sales is going back in the right direction - up! We hit a low of just over 1,500 pending sales at the beginning of the month. Today in the MLS there are 1,578 pending sales including 47 homes over $1 Million. The highest is priced at $6,500,000. There were 24 sales over $1 Million in December. What do these people know? The market has probably hit rock bottom at this point. If pending sales continue to move upward, then I believe we have begun the turnaround.
I personally received more calls on the properties I have listed www.davidwelch.com/myfeaturedproperties this week than I have in the prior several weeks. I have two contracts pending in the first two weeks of this year. If you are selling your home, this does not mean that prices are going up just yet. The median list price of the pending sales right now is $239,900 compared to the median list price of the sales in December of $239,000.
See the City Here
Go back and check my blog over the last two weeks or so, and you will see that I already told you what was announced today. The number of homes sold was just over 1,000 with a median sales price of $223,900. That price represents a 10% drop from the median in December of 2006 or $250,000. The overall median price for 2007 was down only 1.2% from 2006 ending up at $245,000 compared to $248,000.
This is a really early projection for January 2008, but I see another month of just about 1,000 sales. I think the median may be slightly higher, but not much.
Economist Hank Fishkind, who specializes in the Florida real estate market sees Orlando's economy as the strongest in Florida. He expects prices to remain about where they are for some time as the inventory remains high. The stong and increasingly diverse local economy should help prop up the sagging real estate market. He sees flat new home starts for 2008 for Orange county with moderate increases in some of the surrounding counties, and a significant increase in Lake county where new construction has been off the most in 2007. Read the whole article at www.orlandosentinel.com in the business section.
Dr. Fishkind is a bit more optimistic than other economists, and that may be why I like his reports so much. He also is local and specializes in our market unlike many of the economists that get quoted in the national media. I believe that the inventory remains the biggest factor in our housing market here locally. At the current sales rate there is a 25 month supply of homes available for sale. Even if the sales rate were to rise to 1,800 per month, there is a 14 month supply of homes for sale. I believe 1,800 is where we should be with monthly sales in a "normal" market. I don't know that we will see that this year, but I do expect to see sales in the 1,400 range by summer. www.davidwelch.com
It is January 4th, and by this afternoon I will have my first contract of the year. If I can only sell a house every four days, WOW! Pending sales are down well below the 1,600 last month. Inventory is down about 2,000 from where it was a month ago, but it is still very high. Closed sales for December will be announced soon, and they probably won't break 1,000. The median price may actually be a little lower than I estimated last month. I am expecting a median of about $224,000 instead of the $225,000 I reported in my initial estimates.
Folks, FHA is getting very aggressive with their rates, and more sellers are willing to pay 6% towards closing costs and downpayment. That means you can get into a home with a government backed FHA mortgage with almost nothing out of pocket. Check out the FHA Loan link on my home page www.davidwelch.com
If you check out my blog from yesterday, you will see a new listing at 3573 Gatlin Place Cir. I am the owner of this beautiful home in Conway, and I have placed it on the market for sale. It has been a great investment property for me, but I am ready to take advantage of the appreciation the property has experienced over the last few years. Check it out at www.davidwelch.com/3573GatlinPlace
2007 is now behind us, and I am looking forward to a great start in 2008. Already, I have several prospects looking to get into either a first home or a new home this year. The property tax amendment will be voted on in just a few weeks, and that will be a step in the right direction. I am already seeing tax assessments coming down on homes that I own, as well as homes that I have been showing to buyers.
Go Gators in the Capital One Bowl today.