The official March numbers are finally out. Sales were 1,080 up from February's 951 but still off March of 2007's 1,779. The median price is down from last year as well $220,000 compared to $240,000. Inventory was down from February by 512 homes. These are pretty much the same as my numbers, although I look at inventory a little differently. Here is an interesting statistic - twice as many homes over $1 Million sold in March as in February.
The rich get richer, because they buy when it is a great time to buy. This is a great time to buy.
There have been some not so great reports about real estate both nationally, and for the state of Florida in the last couple of days. Specifically the pending sale index is way down. Orlando is a bright spot when it comes to pending sales. This is such an important indicator because pending contract eventually turn into closed sales. Back in January pending sales was down around 1,200 and this morning they are up to 2,620. Historically, I have seen between 60% and 70% of new contracts close in a given month. In March there were just over 1,700 new contracts and just over 1,070 closed sales which is about 62% close rate.
The mortgage mess and resulting stricter guidelines has slowed closing down a bit, but deals are closing. Mortgage rates continue to be very favorable at just below 6% on any given day, but that could change radically if we see inflation numbers come in higher. Prices have also come down fairly significantly, and I see them down maybe a little more this month. I don't think they will fall more than another 5%. Based on our median price of $220,000, I calculated that another 5% drop in prices would be offset by a 50 basis point increase in interest rates. Most lending people I have spoken with, feel that a half point rise in mortgage rates is very likely in the next few months. I just want to reiterate that right now is the time to buy. Inventory is high, rates are low and sellers are motivated.
Sales figures come out in a couple of days, but this is what to expect. Sales up by more that 100 to 1,070. New contracts up by around 200 to 1,700. Inventory stable, around 27,000. The only number that is down is the median price of $220,000 which is down from $223,000 in February. I don't see that coming down a whole lot more. While resale inventory remains fairly steady, the new home inventory is continuing to dwindle down. From 24,000 at the end of 2006 to 8,700 at the end of 2007. I see this number in the 5,000 range by summer. When the builder incentives start to disappear watch resales pick back up significantly.
There is a good article in the paper today where they interview the director of the Institute of Economic Competitiveness in the University of Central Florida's College of Business Administration. I agree with some of his comments although I have to point out that I disagree with his comments about the economy and gas prices slowing our tourism. Just read my blog about going to Disney World last week. In the last paragraph, he even disputes himself. He says that he is still going on vacation, even though he does not expect to receive a raise this year.
The official numbers won't be out until the 10th, but here are my unofficial numbers for March 2008. Active listings still holding steady at 26,851. Pending sales are down a little bit, but that is because a lot of sales got closed finally. Now for the really good news. Closed sales counted so far 1,052 with a median price of $219,900. This is tentative though, because a few more lower sales, and this number could drop by $2,000. All closed sales are supposed to be reported in the MLS within two days, but the association statistician waits until the fifth of the month just to be sure all the sales get in. Even better news is that there were 1,711 new contracts written in March as compared with 1,239 in January and 1,537 in February.
Buried in the business section is finally a positive article. Pending real estate sales are rising all over the state. This is the best indicator of future sales, since these are actual contracts on properties. Closings do seem to be taking a little longer to close. This is mostly because lenders are being a bit more careful, and lenders and title companies are operating with more lean staff. February was up over January, and March is up over February. I expect, since April is usually the start of the Spring selling season, it will be up again next month.
David W. Welch, MBA Broker/Associate Remax 200 Realty www.davidwelch.com davidwelch@davidwelch.com
I have a broad and diverse base of business experience including finance, marketing, sales, computers/information systems, and health care. I graduated from the University of Central Florida in 1987 with a BS in Business Administration with a major in Finance. I earned my MBA from the Crummer Graduate School of Business at Rollins College in 1990 with a concentration in Finance. UCF is the seventh largest university in the nation. Rollins' MBA was recently ranked number 37 in the nation and is one of the smallest programs in the nation. The diversity of my experiences helps me to listen and understand the unique needs and wants of all my customers.
I primarily work in Orange county with a focus on the downtown Orlando, Conway, Dr. Phillips, Windermere, Winter Park, Waterford, Winter Garden, Ocoee, UCF and Lake Nona areas. These are mostly in South Orange county and East Orange county. The majority of my business is single family residential sales, but I also am familiar with many of the condo and townhome communities. I also have experience dealing in vacant land, and commercial sales and leasing. You can read more at www.davidwelch.com/orlandobuyers and www.davidwelch.com/orlandosellers. You can also read about the most up to date happenings in Orlando Real Estate at www.RealEstateOptimist.com.
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