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March 31st, 2011 11:03 AM by David W. Welch
Today is the end of the month, and we have already closed neary 2,100 sales with a median sales price of $100,000. Both of those numbers represent an improving trend in Orlando real estate. More telling is the continued decline in both bank owned and short sale listings, and the overall decline in the number of homes for sale in Orlando. There were over 15,000 homes for sale at the end of 2010 three short months ago, and today there are fewer than 12,800. The median sales price at the end of 2010 was around $95,000 which is now up over 5%, and we have not gotten into prime selling season yet. Census numbers show that Florida and especially Orlando has continued to grow over the last decade. The most recent employment numbers show job growth has returned to Florida with Orlando leading the way with 75% of the new jobs.
Every one of my listings is now under contract, and the investors I am working with are finding it more difficult to identify and contract properties. I expect cap rates to begin dropping from 10% to 9% or even 8% over the next few months. There is always talk of the shadow inventory, but I don't know that the shadow is so hard to spot here in Orlando. A lot of the potential future foreclosures are already on the market as short sales. Between active and pending sales there are about 11,000 short sales. Many of these will close as we are closing between 500 and 600 each month. Many more are likely to become foreclosures sometime down the road. However, with jobs beginning to come back, we are already seeing a drop in foreclosure filings. If the inventory continues to go down, we could also see prices begin to rise possibly pulling some owners back into positive equity positions. We still have a way to go, but I am confident now that Orlando has turned the corner.
David Welch Real Estate Optimist, Orlando Real Estate, Any Home-Any Phone