Orlando Real Estate

Forbes Says Orlando Most Overpriced

December 14th, 2009 10:47 AM by David W. Welch

http://realestate.yahoo.com/promo/where-us-homes-are-most-overpriced From what I can gather the primary reason the Orlando marketplace is being called overpriced is the over abundance of higher priced homes on the market. I suppose in the truest sense you could say we are overpriced for the market. I do not disagree with that conclusion. The segment of our market that has the greatest oversupply of inventory is the higher priced homes. Our median sales price in November was $123,000, but our median list price is about $171,000. The median list price of home actually selling was $125,000. There is a 36.8% difference between the median list price of active listings and the median list price of last month's sold listings.

If you were a retailer and offered a wide variety of merchandise, you may carry some higher end items. The difference is that you probably would limit your exposure by limiting your shelf space and the percentage of your inventory devoted to those high end items. My brother-in-law Bill has a Radio Shack in Summerville, SC, and I am sure that he sells high end televisions. He probably sells a lot of cameras, remote controlled cars, audio components, and a few high end televisions. He does not want to get stuck with too many tv's, because if the market changes he could get stuck with outdated technology. He also does not want all his working capital tied up in slow moving inventory. An individual retailer can control their inventory.

When it comes to residential real estate, each individual owner has an inventory of probably just one home to sell. Each of those owners believes that their home is the one that will sell. Some of them are right. Last month I sold two homes priced at $300,000 and $479,000, and the $300,000 home actually had multiple offers on it the weekend it went on the market. So this begs the question "what is overpriced?" It has been my experience that a properly priced home will sell within 30 days. If a home has been on the market for more than 30 days without any showings, it is at least 10% overpriced. If a home is getting shown, but now offers withing 30 days it is still probably 10% overpriced. To say an entire market is overpriced is probably not incorrect, but I do believe it is an unfair characterization of those properties that are priced appropriately.

Orlando Real Estate, David Welch Real Estate Optimist, As Seen on HGTV's House Hunters
Posted in:General
Posted by David W. Welch on December 14th, 2009 10:47 AM


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