I always like to remind everybody that these are not the official stats. When I report the official numbers, the title will indicate that they are official. So far there are 26,500 active listings in the tri-county area of Orange, Seminole and Osceola. I measure this number slightly differently than the official statistics that are reported, but the do reflect an increase in the inventory of available homes. There are currently 3,523 contracts pending which is slightly down but relatively close to what we have been seeing. Of the active listings 22.4% or 5,932 are properties listed in distress, such as pre-foreclosure, foreclosure or bank owned status. More than 41% or 1,467 of the pending contracts are distressed properties.
Of the 1,100 closed sales 335 are distressed representing 30% of the closed transactions. Speaking of the closed sales, the median asking price was $194,995 which I usually don't report. The median sales price, which is more relavent, fell 7.5% to $185,000. The average time on market for these closed sales was 111 days. Distressed properties are having a greater impact on our market each month. While the percentage of listings has not risen so much in the last six months or so, the percentage of closed sales has increased pretty dramatically. At the same time they have had an impact on prices which are off their highs in the $250's.
Earlier I said I would have something about reverse mortgages, so here it is. Last week at the Florida Association of Realtors conference, here in Orlando, I met a gentleman with MetLife. His name is Dennis Loxton, and he is the area manager for MetLife. He said that they are getting into reverse mortgages in a big way to offer an alternative form of financing. This is another creative way to get into a second/vacation/retirement home here in Florida. This could really help out those baby boomers who want to take advantage of the lower prices here in the sunshine state, but may not be ready to move just yet. It could be more difficult to get financing on the purchase than to take out a reverse mortgage on your existing home. Check with Dennis for details. Then contact David Welch, so he can help you find you a home here in Orlando.
www.DavidWelch.com, Orlando Real Estate Blog
The median price has continued to drop as bank foreclosures and short sales become a larger piece of the real estate pie. Look for September's median price to be around $185,000. That is a $15,000 drop from August or about a 7.5% reduction. I'll be running numbers later today, so look back for more on these statistics later. Also, I will be talking a little about reverse mortgages.
Sales look like they may be a bit off from August. Buyers may be wary of everything going on with the banking industry, or maybe it's just our normal slowdown in the fall. Either way, it looks like we may not go over 1,100 sales for the month. That could change considerably though with over 3,600 pending contracts. Typically contracts close very close to the end of the month, and it usually benefits the buyers regarding their closing costs to wait to the last day of the month.
Of the 725 closed sales so far this month, the big number is the median price. Right now the median sales price stands at $188,000. That is $12,000 less than last month or a 6% one month drop in price. The bailout plan that is being worked on right now, may encourage lenders with foreclosed properties to reduce their prices even more to get these off their books further reducing prices. It could have the opposite effect, and cause them to stand more firm on their prices since the securitized mortgage instrument is being purchased by the government.
I am not sure of all the details of this plan, but it could actually mean that the government will take over these properties themselves. If that happens, they may take them off the market altogether for some period of time, while they get their processes in place. I believe this last option may be the best for stabilizing the situation, but possibly the most costly due to the cost to manage the properties.
I added an additional feature to my website that allows you to perform a Zillow search. You can go to David Welch's Zillow Search, and check it out. Now you can get Zillow's Zestimate on any of the properties I have listed as well as any other property in their database. The information and values in Zillow make it easy to access public and some privately entered information about properties. For the true market value of a home, seek the advice of a professional Realtor in the area.
If you are a Realtor reading this entry, check out the different tools Zillow has available on their website. Some of the widgets they have can be useful tools to add value to your website. Several of the widgets are already applications on my site, but the Zillow search adds an additional feature I did not have. These tools also make for a great opportunity to cross market with Zillow too. This kind of cross marketing helps raise value of your website with links to and from Zillow's site. If you Google Orlando Real Estate or Winter Park Florida Real Estate, you will find that www.DavidWelch.com comes up in the first two pages thanks to blogging and cross marketing like this.
The Remax Difference
The Fed primarily impacts short term interest rates. It does this a couple of ways. First, through open market operations the Fed can expand or contract the money supply by purchasing or selling treasury bonds on the open market. Yesterday, they infused $70 billion into the money supply. They do this regularly, and it typically does not get much press. By putting that much more cash out into the marketplace, liquidity is improved. The credit crunch, and the recent financial failures have banks holding onto higher reserves of cash. Another way the Fed can effect short term rates, that involves the money supply indirectly, is through the reserve requirements they set for banks. If banks have to hold more in reserve, then they have less to lend. If money is more scarce, interest rates go up. Of course the most direct way the Fed has of impacting short term rates is through the rate that they charge to loan money to banks. This is the most direct, and least often used method of impacting rates.
It will be interesting to see if the Fed acts today by lowering the rate again. Apparently, it is at least a topic of discussion. With oil coming down, and the effect of slightly lower energy costs on inflation, they may just lower the rate preemptively. Hopefully, this will get banks to loan more money in turn stimulating business investment. I have taken way too many economics courses, so I hope this was not too dry.
The stock market took a bit of a hit with the news today about Lehman and Merril Lynch. To some degree this was anticipated, and will probably not be the last of the failures that we will be seeing in the news. On the positive side oil continues its slide below $100 per barrel. Of course the slide is caused by lower demand, but the magnitude of the drop in crude appears to be more speculative. In the long run, cheaper oil should lead to cheaper fuel and may actually get food and other prices back in balance. If this relieves some inflationary fears, rates could stay lower longer.
www.DavidWelch.com
Brad Fletcher with Home Staging Design Pros, made a presentation at our office today about the services his company offers. I was impressed with Brad's background and his knowledge and understanding of the market that we are in right now. Another thing I really appreciated was his price list. I have contacted home staging companies before, and trying to find out what it costs was difficult. Brad has a straight forward services menu that includes key Room staging service at $1,995 flat fee for two months. After two months the furniture rental will run about $500/month depending on the home. He also offers a service for owner occupied homes for $395, he will come out and do about a two hour consult with the seller. He will make a list of things to do to better prepare for showings, and he even has furniture and accessories that he can rent that will better show the home.
Check out Home Staging Design Pros at www.HSDPros.com
Everybody else has been blogging about the government takeover of Fannie and Freddie, so I might as well weigh in on the topic too. I don't generally care for government take overs, because they generally overstep their bounds and overstay their welcome. In the case of Freddie and Fannie, they are already quasi regulatory agencies. In this particular case, I believe the short run benefit of re-establishing confidence in the secondary mortgage market is worth the risks of too much government intervention. In addition to the takeover, I for one appreciate Secretary Paulson's fairly positive characterization of the situation. What I would really like to hear is more of our officials offering their encouragement.
I honestly believe there are people waiting to puchase a home, because they are looking for someone to say it will be OK. As a real estate salesperson, of course I am going to say it is OK. That is my job. There are plenty of economists and journalists raising doubts about the real estate and mortgage markets. Economists strike me as pessimists by and large, and of course the media addage "if it bleeds, it leads" applies to the real estate and mortgage markets. So, if any of our public officials read this, how about a positive word on the news tonight. We don't generally trust our politicians, but we do pay attention to what they say. Once every four years or so, we even believe them.
The numbers are in for August, and they are pretty much where I have been blogging they would be. There were 1,225 recorded sales with a median price of $200,000 that is off $8,000 from July. The inventory of homes for sale went up again slightly by 92 properties, but the average time on market came down a bit to 113 days. That is actually the fastest turnaround this year. Check my front page www.DavidWelch.com for a link to pull up the full report.
You don't need to go much further than zip code 32824 and 32837 to find a lot of the foreclosure deals in Orlando. This area south of Orlando makes up about one in seven foreclosures and other distressed properties in Orange county. As of this morning there were just over 500 properties listed at pre-foreclosure, in foreclosure or bank owned property. About 40% of the properties listed in the 32824 zip code are listed in one of these categories. There are probably others listed as corporate owned, or short sales that are not in the foreclosure process yet. A couple other zip codes to take a look at are 32828 and 32832. I believe those areas will probably recover faster because of their proximity to the new bio med community and innovation way east of Orlando.
Check out my latest YouTube video of the condo being built in Baldwin Park. I sold this unit to customers of mine coming down from New York. They are the parents of some of my best customers. Of course Orlando is no Manhattan, but I thought they would love the convenience of Baldwin Park to shopping and downtown. This unit is just a block or two from one of the three community pools and fitness centers in Baldwin Park. It is also very close to the village center. For more about Baldwin Park, take a look at www.BaldwinParkFL.com, and to see the pictures and video of this terrific condo by Centerline Homes check out Baldwin Park Condo.
Orlando real estate statistics for August will be out in a few days, but some of the highlights are: just over 1225 closed sales; median price drop to $200,000, inventory down by about 200; distressed properties up to about 21% of the market; 41% of pending contracts; 27% of closed sales. Foreclosures are having a little more impact on our market as banks reduce their prices to clear out their inventory.
www.DavidWelch.com, www.RealEstateOptimist.com, www.RemaxDifference.com
...at least not in the Sunshine State. A recent study conducted by the Florida Association of Realtors shows that an overwhelming majority (98% of those surveyed). This confirms what I have been seeing personally, and hearing from other agents that I know. The investors are the missing component of our market here in Orlando. In the past, investors and second home buyers have made up a considerable percentage of our market. What we are seeing right now as far as the volume of sales represents the base buyer which is people actually looking for a permanent residence. Another interesting finding is that a fairly large number of those buyers are first time buyers (about 15%).
The most important thing in the study to me is where these buyers said they found their agent. A huge 73% found their agent on-line. We have heard for years that about 80% of people start their home search on line, but now it is becoming a much larger factor in how people select their agent as well. About 11% found their agent from a for sale sign, 9% from a mail out or other advertising, and 6% from a referral or personal source. I can tell you that 50% of my customers last year came from the internet and 50% were either past customers, personal referrals or people I know. By the way as of yesterday there have been 1159 recorded sales in the MLS for August. The median price for those sales was down $7,000 to $200,500.
It is the first of September, and so far there are 1106 recorded sales for the month of August 2008. The median price of the sale recorded so far is $201,500. That is a $6,000 drop from July. I'll have more tomorrow on the foreclosures, inventory and contracts.
Have a Safe Labor Day!
www.DavidWelch.com, www.RealEstateOptimist.com,
www.RemaxDifference.com