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.
September 12th, 2010 8:59 AM by David W. Welch
The last time home prices were this low, Bill Clinton was still president. I told you weeks ago about the big drop in prices last month, but the official numbers were just released. The Orlando Sentinel reported about the big drop on Friday. I have taken an early look at September's numbers and I think we will see a bit of a rebound in prices, but look for sales to drop to around the 2,000 level. All activity slowed in the early going this month with school starting back. The seasonal slow down may be behind us already though. Last week I sold two homes, and I have two new buyers that I am beginning to work with this week. I have also seen increased activity on most of my listings, both online and with showings. In the past, October has been a good month before things slow down for the holidays in November.
The median price reported last month was just $99,900. At current interest rates of 4.5%, financed over 30 years the principle and interest portion of the payment would be just $506.18. If taxes and insurance added another $250.00 per month, you could still probably own for less than rent. With lending still somewhat tight we continue the trend this year with over 50% of the sales closing for all cash. A lot of these are investors that are on track to purchase over $1.6 billion in real estate in Orlando for cash. The investors I have worked with are seeing 8% to as high as 12% returns on their investment. The Fed can make money cheap, but Fannie, Freddie and FHA need to ease lending guidelines to gain the full effect of the low rates. The rate could be zero, but if you cannot get a loan what difference does it make. Start making loans, and you will see a lot more sales helping prices to recover to a sustainable level.
David Welch Real Estate Optimist, Orlando Real Estate