FAQs
Everyone wonders "How low are prices", "Are homes selling", "Are prices going up?". Here are answers to some of the most often asked questions about the Central Florida real estate market.
 

Q: Are home prices still dropping? Are they moving up yet?

A: After holding at the bottom for almost a year, prices have started moving up. The median sale price in August 2011 was up 15% from one year earlier. But it is not so simple. There are short sales, bank owned, and regular/traditional sales. Well the downside is that the median sale price for regular sales is down 6.6% since last august.

Q: Are any homes selling?

A:Activity is quite brisk. I think people have realized that this is a great time to buy real estate. Even Ali Barshi on CNN is recommending buying. In the greater Orlando area over 2,000 homes sold in the month of August. While this number is down a little from August a year ago (8%) the supply of homes is significantly lower than the previous year, 39% lower.

Q: How is the supply vs demand?

A: A balanced market is considered to be 6 months of inventory. At the current rate of sales the inventory is only 4.29 months. So inventory is getting low, making this a seller's market. And with less than half of the sales being regular sales, there is even more buying demand for regular sales that are priced competitively.

Q: Are there any other forces at work on home prices besides supply and demand.

A: Definitely. Over half of the sales are distressed properties. These are often in poor condition and involve more risk, so they sell for a lower price. Also, appraisers are often so conservative in their appraisals that they limit the value that can be loaned in a mortgage, even when the buyer and seller are satisfied with the price.

Q: What surprises have you seen recently?

A:  I was surprised that in Lake county the number of homes sold was up 17% over last year. I think the word is getting out about the quality of life, beautiful lakes,  and good prices in Lake county.

Q: What is the median price of a home in the Orlando area these days?

A: For August 2011 it was $115,000. If you divide the market into segments you can see the downward pressure that distressed homes are putting on the market. The median price for bank-owned homes sold was only $81,750; for short sales it was $96,950; and for regular/traditional sales it was $155,000.

Q: What about my house, what is it worth?

A: I need to see your home and perform a comparitive market analysis (CMA) in order to determine its value. There are websites that just pop out a number, which may be close to the real value, but it may not be. Also you can look at what the property appraiser has appraised it at. But those do not necessarily reflect today's market on your particular neighborhood. I have found both of these sources to be varying in their degree of skew. In a CMA I actually study recent sales, and have often seen inside of the homes, then I make adjustments for differences from your home. But a good general guideline is that home prices today are approximating prices in 2003.

Hope this answers most of your questions about the Central Florida real estate market.

Sincerely,

Lorraine Burch, Lakefront Homes Consultant
Avalar Real Estate Services
407-267-3268
www.HomesCentralFL.com
Lorraine@HomesCentralFL.com