Orlando Home Prices Fall, Year-Over-Year, For First Time Since 2002

The last bit of good news vanished from the gloomy Orlando housing market last month, when the median price of the houses and condos sold fell from a year ago for the first time in more than five years.The median price in the core Central Florida housing market dropped by 3.1 percent compared with April 2006.

It was the first year-over-year decline since the 1.9 percent decrease in February 2002, and the biggest drop since a 4.6 percent slump in 1999.

Existing-home sales by Orlando Regional Realtor Association members were down more than 40 percent from a year ago, the inventory of homes listed hit a new high of 24,435, and the average time it took to sell a home soared to 98 days.

So few buyers are making an offer that it would take a record 16.6 months to sell all those homes and condos at the recent sales pace, and that’s not counting the thousands of for-sale-by-owner properties.

“It’s probably the slowest I’ve ever seen,” said Earl Roberts, an agent with Ram Realty in Longwood, who has been selling part time in Central Florida since 1970. “Everybody is having trouble.”

Association President Randy Martin said a soft market clearly favors prospective home buyers and Florida mortgage applicants, who have “power to negotiate with sellers” on everything from closing costs, down payment help and more.

Caron Loveless, 51, and her husband David, 52, are caught in that “buyer’s market” as they try to sell their MetroWest home, listed now for 11 months and counting.

The couple bought a house in the Dr. Phillips area after finding a buyer for their MetroWest place, but the sale fell through when the Florida mortgage applicant backed out.

“Our heads are spinning,” Caron Loveless said.

“It’s a mystery to be in this situation. We’re carrying two [Florida mortgages], two pools, two pool cleaners, two exterminators and two of everything you need to keep a house going and looking good.”

Their agent, Ellie Musgrave of Signature GMAC, said the couple have done everything they can to sell the property - including cutting the asking price a number of times, from $489,000 to $415,000.

“Buyers, unless they are relocating, are just not very motivated. You see that a lot,” Musgrave said.

But homeowners are finally lowering their asking prices and their expectations, she added, and sales in May look a bit stronger.

The median price of the homes sold by Orlando Realtors in their core market - mainly Orange and Seminole counties — was $241,000 in April, down 3.11 percent from April 2006.

That was up from $240,000 in March, but month-to-month changes in the median are not a very reliable gauge because of their volatility.

“Sellers just have to make the best deal they can,” said Steven Moreira, president and principal broker with Magic Properties and Investments in Longwood.

Moreira said a dramatic slowdown in construction by new-home builders will also help the resale market rebound faster than many might expect.

But home builders say the record-high inventory of existing-home properties in Central Florida is dampening sales of all types of housing, including theirs, and until that number comes down, supply and demand will remain out of balance.

“New starts have pretty much stopped.” said Jim Leiferman, Florida-area president for Pulte Homes.

Craig Russo, director of strategic marketing for Pulte in Orlando, said that about 31 percent of all Realtor listings in the Orlando area involve sellers who are “not motivated,” a figure that inflates the inventory total and has a dampening effect psychologically on prospective buyers.

Based on a survey and an analysis of the Realtors’ Multiple Listing Service, Russo said, nearly a third of existing-home sellers have no need to move, no plans to move, or have not cut their price in as much as 18 months.

Leiferman said he expects the number of sellers who are just “testing the water” to fall as the “hassle factor” of keeping a home in top condition and showing the property begins to take more of a toll.

Many home sellers had watched the price - and their own home’s estimated value - soar in recent years, at least on paper, and so have been slow to cut their asking price.

“People looked at their homes as a passbook savings account,” he said. “They’re not willing to take that loss, or make a ‘withdrawal’ from the account.”

For sellers, the growth in the inventory to a record 24,435 homes, up by another 888 listings from March, means more competition for buyers.

The dip in median prices and the large selection also give home buyers more leverage and reduces the pressure “to make quick decisions,” said Martin, the local Realtor president.

Martin said the local market appears to be “seeking a middle ground” and noted that the growth in inventory slowed in April compared with March, when an additional 1,492 homes and condos posted for-sale signs.

The average 30-year Florida mortgage loan rate also stayed below 6 percent during the month, at 5.93 percent, another helpful factor, Martin said.

The number of homes sold last month in Greater Orlando - Lake, Orange, Osceola and Seminole counties - fell 41.4 percent from April 2006, and year-to-date sales were down 35.1 percent.

For now, the dampening effect of the record-high inventory looks to continue, as local homeowners hammered by rising insurance costs and property taxes look for relief in other states.

SOURCE: Orlando Sentinel