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May 23rd, 2009 9:15 AM by David W. Welch
Sales keep chugging along here in Orlando. We just crossed over the 1,000 mark again this month. Right now closed sales stand at 1,032 with a median sales price of $129,950. March ended with a median price of $132,000, April posted a median price of $130,000. It certainly appears that the bleeding has slowed if not stopped. Unemployment numbers were a little better too, but one number does not make a trend. The inventory continues to decline as sales maintain their improved pace compared with last years numbers. The current number of active listing 19,494 is around 700 fewer than where we ended April.
Banks unwillingness to make investor loans on condos, along with the much higher down payment requirements for owner occupied condos continues to push condo values down. I don't think the banks have figured it out yet, that not providing financing on condos forces the values down. That, in turn, puts more owners upside down in their units forcing more short sales and people trying to re-negotiate their mortgages or just walking away. This leads to more foreclosures that are purchased by investors. That puts more rentals on the market driving rents down. Lower rents mean the investors will pay less to maintain their required returns. Money these days is cheap, but definitely not easy if you are buying a condo. By the way FHA is contributing to this issue with more restrictive guidelines.
The Case-Schiller folks think there are 2 million too many homes for sale nationwide. I believe the number is only 1 million. I have been saying for months, if the government really wants to turn things around in a hurry buy up 1 million foreclosed properties and hold them off the market. $300 billion would buy them and provide for holding costs for a couple of years, but I don't think it would take that long for market recovery. I am hearing sales are picking up all around the country which will speed things along.
Sorry for rambling. The good news is the sales are continuing at a good pace, inventory continues to decline and prices are no longer in a free fall. If money would get a little looser and the government would take some of the properties out of the system we could really turn things around quickly.
Orlando Real Estate, David Welch Real Estate Optimist, @RealtyOptimist