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May 12th, 2008 11:22 AM by David W. Welch
Well, the official numbers are in as reported in the Orlando Sentinel this morning. You can link to the article "Orlando-area home sales see improvement". The numbers being reported are pretty consistent with those that I have been estimating in my recent Orlando Real Estate blogs.
The number of sales at 1,147 is up compared to March's 1,080. It is not a huge improvement, but it is headed in the right direction. The 1,147 is only down 25% from last April. We have been seeing sales down 40+% compared to year ago numbers. At this pace we still have a 22 month supply of homes on the market, but the sales pace is improving. Watch this number start to come down as sales continue to increase and the inventory begins to get sold down a bit.
The reason sales are picking up is two fold. First, and most importantly, price has come down considerably since last year. The median price in April was $211,000, which is down $9,000 from March. A couple of things are effecting this. Quite simply, foreclosures and new homes are bringing prices down. Banks and builders need to get rid of their inventories, and this is having an impact on the existing home prices.The second reason sales are picking up, is pent up demand. People have been waiting for nearly two years, and more will get tired of waiting purchase. Prices and interest rates are down, and a lot of buyers are taking advantage of this.
If you are still waiting, consider this. In another article in the Orlando Sentinel today the Center for Economic and Policy Research found that in many areas people are turning to rentals. The main reason is cost, but in Orlando the cost of ownership is not that much more than the cost to rent. In fact, the difference is $259 a month. This does not take into account future appreciation. It does not mention if it accounts for tax benefits either.