Orlando Florida Real Estate Blog

(October 10, 2007 – Orlando, FL) A drop in the median home price to $235,000 for the month of September means that the area’s affordability index has improved by more than seven percentage points to 92.40 percent, according to the monthly housing report released by the Orlando Regional Realtor® Association. (An affordability index of 92.40 percent means that buyers earning the state-reported median income are 7.60 percent short of the income necessary to purchase a median-priced home.) Buyers who earn the median income of $51,104 can qualify to purchase one of 6,163 homes in Orange and Seminole counties currently listed in the local multiple listing service (MLS) for $217,140 or less.

The first time homebuyer affordability index rested in September at 65.70, also an improvement over August’s 60.70 percent.

The current $235,000 median price is 3.69 percent below the August 2007 median of $244,000, and 6.00 percent below the September 2006 median price of $250,000. The 2007 year-to-date median price of $248,000 remains 0.40 percent above the 2006 year-to-date median of $247,000.

The number of sales in the Orlando area declined by 55.01 percent in September 2007 compared to September of last year (924 to 2,054). The number of sales that took place in September 2007 also declined over the number of sales that occurred in August 2007 (1,467). Year-to-date sales for 2007 (13,503 through September) are down by 38.28 percent over the same period in 2006 (21,878).

The area’s average interest rate was 6.21 percent in September 2007 — a decline from last month’s rate of 6.60 percent.

Homes of all types spent an average of 113 days on the market before being sold in September 2007; and the average home sold for 93.55 percent of its original asking price. In August, those numbers were 108 and 95.02 percent, respectively.

The majority of single-family homes (177) that changed hands in September 2007 were sold for between $200,000 and $250,000, while another 135 homes were sold for between $250,000 and $300,000. Two-hundred nine homes sold for less than $200,000 in September, and 275 sold for more than $300,000. On the far ends of the scale, 16 homes were sold for $1 million or more while only 2 homes sold for less than $50,000.

Inventory

There are currently 26,310 homes available for purchase through the MLS. Inventory decreased by three homes in September 2007, which means that a nearly equal number of homes entered the market as left the market. August 2007 saw an increase of 295 homes and July 2007 saw an increase of 95. Compared to last year, the September 2007 inventory level is 29.48 percent higher than in September 2006. The current inventory level reflects a 28.47-month supply at the current pace of sales.

For-sale inventory for month hits highest level since 1990

Thursday, October 25, 2007

Inman News

The sales rate for new single-family homes equaled the lowest rate for that month since September 1996, and sales were down about 23.3 percent compared to the same month last year, the U.S. Census Bureau and the Department of Housing and Urban Development reported today.

The supply of homes for sale in September was 8.3 months, which was the largest supply for that month since September 1990 when it stood at 8.4 months. The months' supply is a projection of how long it would take to exhaust the inventory of for-sale homes at that month's sales rate.

A supply of greater than six months is generally considered to indicate a buyer's market. The supply reached nine months in August.

New homes spent a median 5.9 months for sale since completion in September, which was the highest level for that month since reaching 6.2 months in September 1992. That compares to a median 3.4 months for sale in September 2006.

The seasonally adjusted annual rate of single-family home sales was 770,000 in September, compared with a September 2006 estimate of 1 million. The rate is a projection of a monthly sales total over a 12-month period, adjusted to account for seasonal fluctuations in sales activity.

The median sales price of new houses sold in September 2007 was $238,000, up 4.99 percent compared to the September 2006 median price of $226,700. And the September average price dropped 2.77 percent to $288,000, compared to $296,200 for that month last year.

Regionally, the rate of new single-family homes for sale dropped about 28.9 percent in the South, 28.3 percent in the Midwest, 12.2 percent in the West and 8.1 percent in the Northeast in September compared to September 2007.

The agencies noted that statistics are estimated from sample surveys and are subject to variability and error including bias and variance from response, nonreporting and undercoverage.

Changes in seasonally adjusted statistics often show irregular movement, according to the report, and it can take five months to establish a trend for new houses sold. The new-home sales survey is primarily based on a sample of houses selected from building permits, and a sale is defined as a deposit taken or sales agreement signed.

The preliminary seasonally adjusted estimate of total sales is revised about 4 percent, the agencies reported.

Core Mortgage Risk Index expected to rise in next 18 months

Friday, October 19, 2007

By Matt Carter
Inman News

First American CoreLogic Inc. says it expects its quarterly Core Mortgage Risk Index will continue to rise during the next 18 months, as declining or flat home prices put more delinquent borrowers into foreclosure.

The index attempts to gauge the likelihood of mortgage delinquencies in the next six to 12 months by tracking home prices and economic factors in 381 markets where more than nine out of 10 Americans live.

Home prices are falling or not keeping pace with inflation in 247 of 381 metropolitan areas, according to First American CoreLogic's fourth-quarter Risk Monitor report.

Home prices are falling in 88 markets, and appreciating at less than 3 percent in 159 others, the report said. With inflation averaging around 3 percent, homeowners whose properties appreciate at a slower rate experience a decline in value in real terms.

Before the housing boom, when many markets enjoyed double-digit appreciation, houses tended to appreciate at about the same rate as inflation, said First American CoreLogic's chief economist, Mark Fleming.

The current trend "speaks to the large correction of housing prices that's happening nationwide," but "doesn't necessarily translate into mortgage risk," Fleming said, except in markets where the economy is week and foreclosures are up.

There are still markets where foreclosure rates are low and house-price appreciation is robust, the report noted. The markets judged by First American CoreLogic to have the least risk enjoyed lower-than-average unemployment, higher wage growth, moderate house-price appreciation, low foreclosure rates, and minimal fraud and collateral risk.

The 10 lowest-risk markets and their annual appreciation rates were identified as:

• West Palm Beach-Boca R.-Boynton, Fla. (1.79 percent appreciation)
  
• Orlando-Kissimmee, Fla. (6.6 percent)
  
• Ft. Lauderdale-Pompano-Deerfield, Fla. (5.07 percent).
  
• Virginia Beach-Norfolk-Newport News, Va. (6.94 percent)
  
• Washington, D.C.-Arlington-Alexandria, Va. (3.87 percent)
  
• Phoenix-Mesa-Scottsdale, Ariz. (7.91 percent)
  
• Bethesda-Gaithersburg-Fred., Md. (-0.12 percent)
  
• Richmond, Va. (8.17 percent)
  
• Salt Lake City, Utah (13.48 percent)
  
• Honolulu, Hawaii (10.94 percent)

Four of the markets identified by First American CoreLogic's as lowest risk -- West Palm Beach, Orlando, Ft. Lauderdale and Phoenix -- were recently singled out by PMI Mortgage Insurance Co. as markets at the greatest risk for price decline in the next two years.

PMI's U.S. Market Risk Index takes into account factors like home-price appreciation, volatility and affordability, and also economic statistics like employment.

Fleming said the Core Mortgage Risk Index emphasized economic issues like employment and wage growth over home-price appreciation

"I would probably agree that some of those Florida markets will have (price) declines in the next two years, but we find when measuring mortgage delinquency risk, house prices are not the most important driver. Unemployment and wage growth are the fundamental risks."

While price declines can eliminate a borrower's equity -- making it harder for them to refinance -- "the two primary reasons for mortgage delinquency are loss of job and divorce, because of the financial shock to the ability to service mortgage payments," Fleming said.

Risk is rising in many Florida and California markets, but "you have to have combination of negative equity position and stress to the economy," Fleming said. Since many Florida and California markets continue to enjoy strong employment and wage growth, he said, they are "much less risky."

"Theoretically, a sufficiently large decline in prices could outweigh strong economic health, but those would have to be major price declines," Fleming said.

The 10 markets identified by First American CoreLogic as the riskiest had foreclosure rates and fraud and collateral risk indices three times higher than national average, plus higher than average unemployment and lower than average wage growth. Eight of the 10 riskiest markets were in Michigan and Ohio, where layoffs in the auto industry and businesses that support it have had an effect on housing markets.

The 10 highest-risk markets and their annual appreciation rates were identified as:

• Detroit-Livonia-Dearborn, Mich. (-0.73 percent)
  
• Warren-Troy-Farmington Hills, Mich. (-0.13 percent)
  
• Youngstown-Warren-Boardman, Ohio (2.05 percent)
  
• Dayton, Ohio (2.38 percent)
  
• Toledo, Ohio (2.15 percent)
  
• Cleveland-Elyria-Mentor, Ohio (2.41 percent)
  
• Grand Rapids-Wyoming, Mich. (1.88 percent)
  
• Memphis, Tenn. (4.87 percent)
  
• Akron, Ohio (4.49 percent)
  
• McAllen-Edinburg-Mission, Texas (6.64 percent)