In many ways, the housing market recovery began in California and spread eastward. Most cities on the East Coast took longer to rebound. But at long last, things are changing for the better in that part of the country.
This can be seen clearly in several of Florida’s major cities, including Orlando. This real estate market, and others in the Sunshine State, could soon experience their best summer in years.
List Prices Up, Listing Inventory Down
Every month, Realtor.com publishes a real estate report with data for 146 metro areas in the United States. According to their latest report, the median list price within Orlando’s real estate market rose 16% over the last year or so. This is the result of rising demand and shrinking inventory.
The Orlando housing market has shrunk significantly over the last year, in terms of the number of homes for sale. According to Realtor.com, the total number of listings in this metro area fell by 22% over the last year. This is good news for a state that was long plagued by foreclosures and inventory surplus.
Homes within the Orlando metro area appear to be selling faster, as well. The median inventory age has declined by 20% over the last year. The median inventory age is a rough indicator of how quickly homes are selling in a particular market. A sharp decline like this is good news for homeowners who are planning to sell.
Median Sale Price Up 30%, Year Over Year
According to the real estate website Zillow, the median sale price for the Orlando area rose by a whopping 30% over the last year. In April of this year, the median sale price rose to $123,600, an increase of 30% over April 2012. That’s an average for the entire metropolitan area. The median price rose even more in certain areas. For instance, the median climbed 48% in Metro West and 35% in the College Park area.
The Orlando Regional Realtor Association (ORRA) has reported slightly lower, but still impressive, numbers. According to their data, the median price for homes sold in March was 22% higher than the same time last year. Their 15-month trend matches the 30% number reported by Zillow. ORRA reported a 30% increase in the median sale price since January 2012.
The Realtor group also reports an increase in home sales over the last year or so. Their members completed 7% more sales in March 2013 than the same time last year. This is particularly interesting, because it comes at a time when inventory is shrinking. When home sales rise in tandem with falling inventory, it suggests strong improvements on the demand side of the equation.
Simply put, there are more buyers competing for fewer homes in the Orlando real estate market. This trend will likely continue through the summer months.
Super-low mortgage rates will also do their part to drive demand within the housing market. Rates have been hovering at or near historic lows for weeks. According to Freddie Mac, the 15-year fixed mortgage hit an all-time record low of 2.56% last week. The Freddie Mac survey dates back to 1971, so this is a significant milestone.
The benchmark 30-year mortgage rate fell to an average of 3.35%, just slightly higher than the all-time low we saw in November of last year.
A Hot Summer for Orlando’s Housing Market?
I hesitate to use the “perfect storm” cliché when talking about housing markets — or ever. But that’s really what we are seeing here. The economy is improving. The job market is growing. There is more demand for housing within the Orlando real estate market. Mortgage rates are incredibly low. Inventory is dropping. When you add in the seasonal uptick in activity typically seen during the summer months, you have all the ingredients for a seller’s paradise.
According to the number crunchers at Metrostudy, housing starts in the area rose 30% during the first quarter of this year, compared to the same time last year. Single-family home sales (measured by closings) rose 21% during the same period.
“The first quarter of 2013 continued the trend of strong starts and closings in Orlando,” said Anthony Crocco of Metrostudy. “We anticipate starts and closing rates to accelerate in the next two quarters, as most builders have a significant backlog of sales contracts…”
Disclaimer: This story includes forward-looking statements regarding the housing market in Orlando, Florida. These statements were based on data and trends in a rapidly changing industry. As a result, they should not be taken as “gospel.” We make no guarantees about the future of this or any other housing market in the United States.