Real Estate News

5-Year Supply of $1M Homes in Orange County, FL

(ORLANDO, FL) -- Wanna buy a $1 million home?  Rush to Orange County, FL.  The area has a five-year supply.

That's according to Roger Soderstrom, founder and owner of Stirling Sotheby's International Realty.

If you don't see a residence you like in Orange County, drive to the neighboring counties of Seminole, Osceola and Lake.  Seminole has a six-year supply; Osceola, a 12-year supply and Lake, a 21-year supply.

In a first-half market update, Soderstrom says Orange County is currently closing about ten $1 million-plus properties each month.

"The high-end market of $1 million and above has been substantially impacted by the economy and global recession," as owners struggle to make mortgage payments, says Soderstrom.

Although 2009 sales from January through June are up over 30% over the previous year-to-date sales numbers, about 50% of all sales are classified as distressed, properties either owned by banks, or short sales.

"The remaining sales would be classified as our true retail sales activity," the broker says.

A short sale occurs when the lender allows an owner to sell his house for less than he owes on the mortgage.

"We are beginning to see a trend line developing where the number of bank owned properties are declining and short sales are increasing," Soderstrom says.

"Lenders prefer the short sale process over a foreclosure, as this is generating a higher sales price.  Also, realtors are developing more skills in representing short sale properties."

Soderstrom says financing trends over the first seven months indicate that 37% of all sales were cash transactions.

"The reason for the large number of cash transactions is due in part to the large number of distressed condominiums that have sold at relatively low prices and are somewhat difficult to finance," the broker says. 

"Through our Auction Division we are also seeing a high percentage of our vacation, second home, pre-retirement, and retirement properties being cash transactions, especially in the $125,000 to $300,000 price range."

Soderstrom says his company is also "beginning to see renewed interest from our buyers in the UK, Europe, and Canada.  If the pound and euro continue to strengthen against the dollar, we are going to see more sales activity in Central Florida from these countries."

He predicts that as the economy improves outside of Florida, the residential market in Central Florida will see an increase in sales activity from buyers looking for vacation, second home, pre-retirement, and retirement homes.

"Florida is (still) perceived to be a bargain," Soderstrom says.

The  trend line tracked by Stirling Sotheby International Realty shows listing inventories have declined each month.  In January, the listing inventory was at 22,613 units, down to 17,231 units in July.

Soderstrom adds, "It is our belief that the home prices are nearing the bottom and we will find stabilization by the end of the year with a sustaining market in 2010 and 2011 before we begin seeing a true market upturn." 

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