Monday, August 28, 2006
Overall home sales down, but metro area enjoys increase
The relative slowdown in housing sales predicted by economic experts has begun to show itself in Orlando, where the 2006 year-to-date tally has dropped slightly (by 2.29 percent) below that of the red-hot record year of 2005. The Orlando area remains one of the nation’s strongest housing markets and is expected to end with its second best year ever, behind 2005.
A total of 2,113 existing homes changed hands in July through the Mid-Florida Regional Multiple Listing Service, for a year-to-date total of 17,166. Through the first seven months of 2005, 17,241 had been sold. The number of homes sold in July of 2006 did drop by 26.5 percent when compared to July of 2005 (2,874).
“After the tremendous two years we had previously,” says Orlando Regional Realtor® Association President Beverly Pindling, “it would be nearly impossible for 2006 to not exhibit a slip.”
Sales of existing homes within the Orlando MSA (Lake, Orange, Osceola, and Seminole counties) on the other hand are up by 11.3 percent when compared to July of last year, and year-to-date sales are up by 0.7 percent. A total of 21,916 homes in the MSA have been sold by Realtors® so far in 2006 (21,760 were sold through July in 2005). When compared to July of 2005, each of the four counties rebounded with an increase in sales in July: Orange County by 10.4 percent; Seminole, 15.8 percent; Osceola by 15.9 percent; and Lake by 3.4 percent.
“This difference in figures for July shows us that most of the home sales activity is happening right in our backyard,” explains Pindling. “The reason for the 26 percent drop in overall sales is the drop off in sales outside of our MSA by our membership.”
In addition, she says the proliferation of condo conversions (previous rental units transformed into available-for-purchase homes) on the market is absorbing housing demand. These condos are generally not purchased through Realtors®, which would affect the statistics tracked by ORRA. The association records only those sales entered into the multiple listing service.
The increase in inventory continued its upward trend in July, with 6,862 homes listed in the Realtors®’ multiple listing service contributing to a total of 19,827 homes on the market. Last month, inventory took a breather and increased by only 258 homes. “As home sellers continue to realize they need the services of a Realtor® to sell their homes under today’s particular market conditions, we expect to see the MLS inventory to increase or hold steady,” observes Pindling.
The median price of homes sold in July was $252,900, a 3.22 percent rise over July 2005’s $245,000 median. The average mortgage interest rate actually dropped a fraction last month, to 6.39 percent. In August, the Federal Reserve’s Federal Open Market Committee broke its streak by deciding against raising the federal funds rate for an 18th straight time, which translates well for homebuyers.
A breakdown of existing homes shows that of the 2,113 sales during July, 1,595 were single-family homes; 378 were condos; and 142 were townhomes, villas, or duplexes. Last July 2,205 sales were single-family homes; 490 were condos; and 179 were townhomes, villas or duplexes. In a departure from the usual, most (350) existing homes fell within the $250,000 - $299,999 price range (historically, the majority of existing homes sold have been in the $200,000 -$249,999 range).
