By signing into my site, you can access your favorites from any computer and get e-mail updates when new listings come in that match your recent searches.
July 27th, 2009 3:26 PM by David W. Welch
I have been a full time agent in the Orlando real estate market since 1997. Around 2000 I began to see a real change in our marketplace here, with sales picking up faster and prices going up more quickly than historical averages. Our systems were not as good as they are today, and our association statistics were not as readily available. So, it was more of a gut feeling than anything else when our market started to really heat up. I know that my own business really took off in 2000 and grew tremendously through 2005. In 2004 was the first time I really started looking at and tracking our inventory to see what was going on. What I saw was that the number of homes available for sale was dropping pretty significantly. I believe it was later that year that the news media really started reporting on our red hot market. By the time Charley came through damaging an estimate 20% of the homes our inventory was really down, and because of damage a lot of people were delaying putting their homes on the market. This additional drop in inventory and a slow down in new home construction lead to the incredible boom of 2005.
Of course, the market at that point continued to heat up to the point that we actually got down to about a one month inventory of homes available for sale. Because this is really just about supply and demand, prices were driven through the roof. People became desparate to purchase a home for fear of being permanently priced out of the market. Sellers, builders, lenders and real estate agents struck while the iron was hot selling anything they could to the highest bidder. We will probably never see another market quite like that in our lifetime. There most definitely will be up markets again, but I just cannot imagine another one like what we experienced.
Then, as if someone turned the light off it all stopped. We did not see a gradual slow down, but an abrupt end to the boom market. Prices did not change immediately, but sales dropped very quickly. This lead to increases in inventory, especially when all the new homes under construction for flippers began to be completed. Prices actually resisted coming down for quite some time. Then bank owned properties started hitting the market and short sales began undercutting the banks early in 2008. When the TARP funds hit the banks in the third and fourth quarter of 2008 REO prices were slashed. Our peak median price in Orlando was just over $260,000. By the time our prices stabilized in April of 2009 the median price stood at half that. I feel pretty confident that with nearly four months of stable prices that values have bottomed. That is where we came from and where we are today. Sales are actually pretty good, but new contracts are fantastic. Inventory is steadily declining with fewer REO's in the active inventory. With prices now finally steady, we can begin to see a recovery in our real estate market.
Orlando Real Estate, David Welch Real Estate Optimist