Orlando Area Single Family Market Overview
As Sellers Become More Flexible, Buyers Get a Break

March 2007

General

After years of vigorous growth, Central Florida is experiencing a cooling in the single family housing market. The biggest challenge will be the tremendous number of homes on the market. The Orlando Board of Realtors Association reports that there were 21,122 homes available for purchase in November 2006 as compared with the previous year when only 9,685 homes were on the market. Twenty-nine percent fewer homes changed hands in October 2006, compared with the previous year, as many buyers continued to take a "wait-and-see" approach. Entering 2007, the Orlando Board of Realtors Association estimates there is a 16-month supply of available homes.

While property speculation appears to have ceased, with inventory levels topping out, signs of home buying have surfaced. As a result, realtors and lenders alike are encouraged, but guarded, about 2007, which is being referred to as a buyers market. The market is encouraging sellers to be more flexible now by reducing their prices and/or paying part of the associated closing costs.

Orlando Regional Realtor Association President Randy Martin says January 2007 appeared to be an anomaly. January closings in the Orlando area totaled about 1,350, while a typical month would see 2,200 to 2,500 closings, he says. February should be back up to about 2,000, he says.

Nationally, in 2006, existing home sales experienced a 10.7% decrease from the previous year. Reportedly, from the National Association of Realtors, the nationwide median price for an existing home was $218,000 in the fourth Quarter of 2006, which was a 3.1% decrease from the previous year. However, the Orlando MSA posted a 4% increase in the median price of an existing home, or $263,600, in the 3rd Quarter 2006. However, according to an analysis by an online real estate research company Zillow.com, home values in metro Orlando and two other Florida markets were among the nation's fastest growing in the third quarter. They estimated that Orlando-area existing-home values in the quarter rose 17.6 percent from the previous year. The Florida Association of Realtor's report showed only a 2% increase in existing single-family home median sales prices for January 2007.

Overall, the slumping new-home market continues to hamper the region's growth. Single-family and multifamily building permits were down 42.48 percent in November 2006 from a year earlier and are projected to fall 29.23 percent February 2007, compared with February 2006. (Central Florida Business - February 5, 2007)

Optimistically, the Florida Association of Realtor's reports that the Orlando area is Florida's strongest real-estate market as the state began 2007. Metro Orlando's advantages include strong population growth, driven by "robust gains in employment," and relatively low levels of new-home inventory, according to a report by Attorney's Title Insurance Fund Inc.

Single Family Land Purchases

Centex Homes paid $4.04 million for 172 acres, or $23,488 per acre, at Trimble Park in northwest Orange County. Tangerine Partners Partnership LLP of Orlando was the seller. (Orlando Sentinel - February 13, 2006)

Rock Springs Estates, LLC paid $1.6 million for 30 acres, or $53,333 per acre, at 1907 Vick Road in Apopka. The sellers were the Len J. Lester and Lennette M. Lesko Trusts. (Orlando Sentinel - March 27, 2006)

A 76-acre tract at Gator Lake and Marion County roads in Weirsdale, Lake County, sold for $1.8 million, or $23,684 per acre. Single family homes are planned for the property. (Orlando Sentinel - March 27, 2006)

Ashton Orlando Residential LLC bought 12.3 acres at 311 Longwood-Lake Mary Road in Lake Mary for $3 million, or $243,902 per acre ($5.60 per square foot). Jeff Bornstein of Coldwell Banker Commercial NRT negotiated the deal. (Orlando Sentinel - August 14, 2006)

New Development

Heathrow-based developer Wescar recently announced plans to develop Deer Lakes, a $15 million gated community in the Heathrow area, on a site largely surrounded by the Wekiva Preserves. The 40-acre proposed development will have 31 lots ranging in size from one-half acre to 1 acre. Prices will start at approximately $350,000, and homes will start at approximately $1 million. The developer plans are to break ground summer 2007. WESCAR Cos. of Heathrow paid $3.225 million for the 40 acres ($80,625 per acre or $1.85 per square foot) on the north side of State Road 46 in Seminole County. The seller was Seminole Community Church. (Orlando Business Journal - March 9, 2007)

Rey Homes has launched a 130-unit, second phase of City Homes at Baldwin Park in northeast Orlando. The three- and four-story homes, priced from the $450,000's, will each have a two-person elevator. (Orlando Sentinel - November 27, 2006)

Two home builders are launching the 49-lot Braemar infill development in Gotha in west Orange County. It took 18 months of planning, however, Osprey Custom Homes and Arlington Homes plan to build luxury homes starting around $1 million. (Central Florida Business - October 9, 2006)

Royal Palm Homes acquired a 54-acre site near Apopka to develop 235 single family homes, or 4.35 units per acre. The property is located on Mandam Road. (Orlando Sentinel - May 29, 2006)