Orlando Market Update

Each month, the Orlando Regional Realtor Association publishes its Market Pulse, a report containing essential market data. Here is our breakdown of the June edition:

First, the bad news:

1.) The number of new contracts written in May actually decreased from the number written in April. It's the first month-to-month decrease since December of last year. Although we are almost out of the traditional "buying season" (March to June), new contracts still should have shown an increase.

2.) The average mortgage rate increased to 5.94%, the highest it's been since November of last year. The higher the interest rate a lender charges, the less a buyer has to spend on a home.

3.) Overall inventory decreased from 25,436 in April to 25,015 last month, a change of less than 2%. Although the fact that inventory decreased is good news, the glacial pace at which the number declined puts it in the bad news category. At this rate, it will take us two to three years to return to a balanced market.

Now, the good news:

1.) Total sales closed increased from 1,231 in April to 1,276 last month. Although it's a small change, it indicates buyers are still in the market for homes.

2.) The number of new listings decreased to its lowest level since December 2007. We'd like to see this number decline even further, as only serious sellers should be listing their homes in this market.

3.) The total number of properties under contract increased for the fifth straight month to 3,225. Although many of these under contract properties are short sales and, therefore, a good number of them won't close, this statistic is another good indication that buyers are out there and ready to purchase.

This is yet another month of mixed news. Overall, we seem to be heading in the right direction. Inventory is down, sales are up. However, the rate of change is glacial, indicating that we are far from out of the woods.

Our recommendations for buyers and sellers have changed slightly.

Potential sellers still need to make a fairly quick decision whether to sell or hold. Although depreciation has slowed, and is likely to continue to slow for the foreseeable future, homes are still losing value. Price is still a major concern for buyers, and the abundance of foreclosures and short sales has put pressure on general re-sales. Hold or lease if you can, plan to present a well-priced, immaculate home if you cannot.

Buyers still need to get out there and buy. Many lenders are now using credit score as the major determinant of interest rate. For example, a buyer with a 650 score might get a 6.5% rate, while a buyer with a 700 credit score might get the same loan for 6.125%. Buyers who wait will likely find themselves paying a higher interest rate. Additionally, the number of foreclosures is reaching a peak, forcing banks to let go of properties for less than market value. As foreclosures begin to decline, banks won't be as desperate.

As always, we are happy to speak with you about any questions or concerns you might have about today's market. Simply contact us at 407-222-8257 or contact@cflistings.com.