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February 29th, 2012 2:10 PM by David W. Welch
If I were a betting man, I would wager you will pay cash for your Orlando real estate purchase. Last year, there were 29,645 home sales in Orlando. Of that number, 15,812 or 53.3% were cash deals. That is a lot of greenbacks flowing into our local market. The next biggest source of purchase money was conventional financing which was used on 6,131 sales or about 20.7%. That was followed by FHA with 5,742 or 19.4% and VA with 786 or 2.7% of all sales. The remaining 1,174 or 4.0% were financed by other sources including: private lending, seller financing and other sources.
The abundance of cash has helped to fuel a real selloff of the available inventory in our area. Currently, there are fewer than 8,500 homes of all types available for sale in Orlando. The number of available homes has dropped by more than 40% since last year. In fact, you would have to go all the way back to October 2005, the height of the boom market, to see inventory this low. The difference between then and now are the prices. Back in 2005 the median price was north of $200,000 while today the median sales price is just over $100,000. Investing in Orlando real estate now, is like buying high yield bonds. You get the cash flow now which is returning 10% or more, and there is a lot of upside potential for improving prices as the local economy improves.