Positive equity on the rise for local homeowners

Central Florida homeowners have been on an equity roller coaster ride over the past few years. First came the production boom starting in 2004. “Meteoric” was a common term used to describe the rapid increase of home values, and it was common for builders to have extensive waiting lists to purchase in new communities. Then came the crash. Many builders shuttered their doors and homeowners fell victim to foreclosure as they watched their equity evaporate before their very eyes. Buyers had an overwhelming amount of homes to choose from and foreclosures exploded on to the scene. Often times the foreclosed homes, while in disrepair, were far cheaper to buy than traditional sales or buying new. Put simply, they were some of the best values out there. Distressed homes dominated the market.

That is no longer the case. Over the past two years the real estate market here in Orange and Seminole counties has rebounded significantly. This is due to several factors, two of the biggest influences being the influx of cash investors and the decrease of available homes for sale. In late-2012 and 2013 Central Florida saw investors with cash explode onto the scene, buying in bulk to flip or rent. Combine that with the lack of available homes, and bidding wars erupted while sellers experienced a 25 percent increase over 2012 in median sales price. Moreover, the days of distressed homes representing the largest segment of the market of homes for sale are gone.

In July there were 2,836 home sales in Orlando, of which only 491 were foreclosures and 490 short sales. The other 1,855 home sales were traditional. In fact the number of traditional sales (sales of homes by the homeowner and not a bank), were up 56 percent while sales of foreclosures and short sale homes were down 15 percent and 30 percent respectively. Not only are there fewer foreclosures for homeowners to contend with, they are no longer priced below other homes on the market. The Orlando Regional Realtor Association also stated in its market statistics report for July that the median price for foreclosures was up 17 percent that month while regular home sales increased 11 percent.

National data provider CoreLogic stated in late August that the amount of homes in foreclosure was 949,000 nationwide, a 32 percent decrease from June and down 20 percent from 2012’s total. Not only that but 8.3 million homeowners are projected to be above water in terms of equity in the next 15 months according to RealtyTrac. Fewer foreclosures and moderate price gains mean an overall improvement in the housing sector’s health. And with more homeowners experiencing positive equity in their homes, it’s a win-win situation for everyone.

Christina Rordam is a local Realtor. Contact her at 407-928-8294 or ChristinaSellsOrlando.com