Orlando Median Home Price Up 15% Year-Over-Year in August as Rates Remain at Record Lows

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(ORLANDO, FL) -- Based on a new market report from the Orlando Regional Realtors Association (ORRA), buyers who purchased an Orlando home in August paid the lowest average interest rate - 4.26 percent - the lowest rate since ORRA began tracking the statistic in January of 1995. The record was previously held by October 2010, when the average interest rate stood at 4.28.

However, buyers are paying increasingly more for homes as the year progresses. The Orlando area's overall median price is $115,000 for the month of August, a 15.12 percent increase over August 2010. Since January of this year, Orlando's median price has increased by 21.18 percent.

The lower median price of foreclosures and short sales does continue to negatively influence the overall median price. The median price for bank-owned sales in August is $81,750 and the median price for short sales is $96,950.

A steady rise in the percentage of "normal" sales -- those that are neither bank-owned nor short sales -- continues to boost the overall median price. In August, the number of normal sales dropped a single percentage point after six months of consecutive increases and made up 41.33 percent of all transactions involving members of the Orlando Regional Realtor Association.

The 2,342 sales transactions that were completed in August 2011 is 8.73 percent less than were completed in August 2010. A breakdown by sales type, however, shows that bank-owned sales dropped 51.36 percent compared to August 2010, while short sales increased 31.95 percent and "normal" sales increased 32 percent.

At the current pace of sales, there is a 4.29-month supply of homes in Orlando's inventory. The number of homes available for purchase in the Orlando area declined in August by 294 homes and now rests at 10,055. Overall inventory is down 39.19 percent from August of last year; single family home inventory is down 35.54 percent while condo inventory is down 51.84 percent.

Pending sales - those under contract and awaiting closing - are currently at 9,502. In August 2010, the pending tally was 8,945.

Homes of all types spent an average of 101 days on the market before coming under contract in August 2011, and the average home sold for 95.05 percent of its listing price. In August 2010 those numbers were 83 days and 95.14 percent, respectively.

The area's average interest rate decreased in August 2011 to 4.26 percent, from the 4.53 percent posted in July 2011. The August 2011 average interest rate is the lowest since before January 1995.

Affordability

The Orlando affordability index increased to 247.95 percent in August. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.)

"Affordability conditions this year have been enormously favorable, but many buyers are being held back because banks are offering financing to only the most highly qualified borrowers and ignoring a large share of otherwise creditworthy buyers," explains ORRA Chairman Mike McGraw, McGraw Realty Services, Inc. "Those potential buyers represent the difference between an uneven recovery and a much more robust housing market that in Orlando and even on a national scale could stimulate additional economic activity and create jobs."

Buyers who earn the reported median income of $53,903 can qualify to purchase one of 5,596 homes in Orange and Seminole counties currently listed in the local multiple listing service for $285,141 or less.

First-time homebuyer affordability in August increased to 176.32 percent from last month's 169.79 percent. First-time buyers who earn the reported median income of $36,654 can qualify to purchase one of the 3,908 homes in Orange and Seminole counties currently listed in the local multiple listing service for $172,352 or less.

Condos and Town Homes/Duplexes/Villas

The sales of condos in the Orlando area (393) decreased by 41.43 percent in August when compared to August of 2010 (671).

The most (161) condos in a single price category that changed hands in August were yet again in the $1 - $50,000 price range and account for 40.97 percent of all condo sales. Low-priced units have overwhelmingly dominated condo sales since March of 2009.

Orlando homebuyers purchased 227 duplexes, town homes, and villas in August 2011, which is a 1.34 percent increase from August 2010, when 224 of these alternative housing types were purchased. Most sales (39) were between $100,000 and $120,000.

MSA Numbers

Sales of existing homes within the entire Orlando MSA (Lake, Orange, Osceola, and Seminole counties) in August were down by 11.07 percent when compared to August of 2010. Throughout the MSA, 2,803 homes were sold in August 2011 compared with 3,152 in August 2010. To date, sales in the MSA are down 1.95 percent.

Each individual county's monthly sales comparisons are as follows:

Lake: 17.02 percent above August 2010 (385 homes sold in August 2011 compared to 329 in August 2010);

Orange: 14.22 percent below August 2010 (1,442 homes sold in August 2011 compared to 1,681 in August 2010);

Osceola: 29.15 percent below August 2010 (440 homes sold in August 2011 compared to 621 in August 2010); and

Seminole: 2.88 percent above August 2010 (536 sold in August 2011 compared to 521 in August 2010).

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