In the Greater Orlando, FL, area, consisting of Orange and Seminole counties, we continue to see persistent high unemployment levels above 11 percent and continuing low-interest rates in the 5 percent range.
In January 2008, there was a 31-month supply of inventory. For the past year and a half, we have seen more normal market levels with the current figure being in the six-month range. An inventory of six months’ supply is generally considered a more balanced market.
Inventory levels are subject to change at any time primarily because of the number of unreleased distressed properties (shadow inventory) held by the banks.
At the present time, we continue to have approximately two-thirds of sales in the short sale and bank-owned categories. According to some experts, normal markets generally have less than 10 percent of all sales in the distressed category. This high percentage of distressed sales is putting downward pressure on prices.
It goes without saying a key ingredient to this local market’s recovery will be a reduction in the bank-owned and short sale inventory that we are presently struggling with.
Statistical Snapshot
| Time Period |
Today
(2010) |
1 Year Ago
(2009) |
Change |
| Unemployment |
11.9 |
11.7 |
+1.71% |
| Months of Supply |
6.3 |
6.45 |
-2.33% |
| Annualized Sales Volume |
28,602 |
23,921 |
+19.57% |
| Annualized Avg. Sale Price |
$143,853 |
$161,018 |
-10.66% |
| Average DOM |
88 |
97 |
-9.28% |
The extended tax credits for both first-time and repeat buyers in the first part of 2010 was helpful to many buyers and sellers. There does not appear to be either a significant increase or decrease in prices due to these incentives, which remained stable for 2010 as a whole. They may have helped with the increased volume of sales we had overall for 2010, however.
As shown in the statistical snapshot, the annualized average price for all types of sales (normal and distressed) for 2010 was $143,853. This figure was down 10 percent from the year before ($161,018), but did show a 20 percent increase in volume of sales for 2010 (28,602 homes versus 23,921).
Tourism, hospitality, and entertainment remain base industries here. Major employers in the Greater Orlando Area include Walt Disney World, Universal Orlando, Sea World, the two hospital systems of Orlando Health and Florida Hospitals, and so forth.
Market At A Glance
| Economic Climate |
Medium |
| New Construction |
Low |
| REO Activity |
High |
| Supply |
Medium |
| Demand |
Low |
| Market Direction |
Down Slightly |
| Market Mood |
Average |
Medical city in southeast Orlando is in the early stages of development. It includes the new University of Central Florida’s College of Medicine, the Nemours Children’s Hospital, the M. D. Anderson Cancer Center, the Sanford Burnham Medical Research Institute, the Orlando VA Medical Center now under construction, and more. This Medical City in the Southeast quadrant will provide a stimulus to the Orlando economy. It is expected to create jobs and provide money for the local economy during the coming decade.
Either or both the local light rail commuter train system for Orlando and/or the high speed train from Orlando to Tampa could materialize and develop during the next few years and provide further stimulus to the local economy.
We all are waiting in anticipation for an improvement in real estate market conditions in the Greater Orlando area. The housing industry’s recovery here will depend on an economic recovery on both a national and local level.
Ben M. Cole III, SRA, CRP, is with Ben M. Cole III, Inc., Maitland, FL. He can be reached at +1 407 628 2501 or e-mail
bencole@rac.net.
Sally A. Kuhn is with the Appraisal Office of Sally A. Kuhn, Inc., Orlando, FL. She can be reached at +1 407 948 2490 or e-mail SallyKuhn@RAC.net.