Orlando housing prices hit bottom, increases predicted

Things are looking up for Orlando area real estate. Real estate pros and local homeowners have seen the change over the past year, most noticeably with the ever-decreasing inventory of homes for sale. Traditionally a housing market with less than a six-month supply of available homes is considered a seller’s market. Currently the Orlando area home supply is at a five-year low point, with an overall decrease of 30 percent from March of 2011. This equates to a three-month supply of homes for sale. This is amazing news for home sellers as it reflects the stabilization of the housing market in Central Florida. In fact, many neighborhoods have seen gradual increases in their property values.

Still not believing the hype? Industry pros have been ringing the recovery bell for the past year. In fact, Frank Nothaft, chief economist and vice president of housing lender Freddie Mac, said the following last January while at the International Builders Show in Orlando: “I do think we’ll see these housing prices bottom out, maybe by spring (2011).” Frank went on to state, “This is the time to come in the market if you’ve got the financial resources and wherewithal.”

The ultimate get from all these sound bites and data charts is this, Orlando has hit its housing bottom, and is slowly but surely recovering. Commenting on Zillow’s first quarter Real Estate Market reports, which came out April 24, Zillow Chief Economist Stan Humphries said, “For people who have been waiting to time their home purchases close to the market bottom, it’s time to start shopping.” Orlando area home prices are up 13 percent from last year and sales are up 18 percent from last February. Mortgage rates are still at all-time lows, as well, so the timing really couldn’t be better.

Thinking of investing? Rental rates increased 3 percent nationwide in 2011 and are projected to climb throughout 2012. Investors are zeroing in on the fantastic ROI potential for Central Florida homes. Many investors are making a killing buying up REO and short sale homes, fixing them up and renting them out to tenants.

As an Orlando real estate professional for the past seven years and having a mother that has been a top Realtor locally for more than 30 years, I can say with confidence that this recovery feels legitimate. Many purchases are being made with cash, or with 20 percent down. Lenders are more stringent with their guidelines now, meaning the buyers are qualified and less likely to default on their loans and flood the market with foreclosures in coming years.

Yes Christina, but what of all this talk of “shadow inventory,” i.e. homes headed to default but not yet foreclosed on? A big trend I am seeing is short sale reform, and also, lenders looking to partner with owners to complete modifications and short sales. I personally work with a nationwide lender that seeks to help owners complete short sales rather than having them fall into foreclosure. Bank of America recently announced that they will be establishing a 20-day approval guideline for short sales. Meaning, you can get an approval or response to your offer on a BOA short sale in 20 days. Beginning June 15, homebuyers can expect to get responses to short sale offers on Freddie Mac- and Fannie Mae-backed homes in 30 to 60 days. Previously short sales with these lenders got responses anywhere from 45 days to months, in some cases. Again the lesson is the lenders will be working to complete more short sales, which will prevent another disastrous wave of foreclosures to depress the market. With climbing home values, declining inventory and record-low interest rates, it would appear the sun is shining on the Sunshine State.

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