Thinking about selling your house? “Not in this market,” is the answer commonly heard this summer. In East Orlando the residential housing market is better off than in most areas of metro Orlando, Central Florida and the nation however. Summer is traditionally a good season for residential Realtors, since many families relocate while their children are out of school and East Orlando is no exception to this trend.
One local real-estate team reports a good week having started 2-3 new contracts for home sellers. “Confidence is up nationally, according to the financials I track, and interest has improved over the last couple weeks,” says Fred Marberry, of Century 21 Real Estate Professionals. Fred and his wife Bonnie have been selling residential real estate almost exclusively in the area since 1997.
“Two years ago the inventory of homes in the MLS system for Central Florida Realtors soared to 31,000 homes for sale. Just two years earlier in 2005, there were 3,100 homes for sale in the MLS system.” Marberry continues, “There were more buyers than sellers then. Now the inventory is high and there are not enough buyers to keep up.”
The financial crisis experienced in the nation is reflected by the number of home foreclosures in Florida, second only to Las Vegas. In Florida one in 148 homes are in foreclosure. In Las Vegas one in 64 homes are listed as a foreclosure property. Locally in the Lake Nona area, according to Realtytrac.com, of the nearly 380 homes for sale, 183 of them are currently in the foreclosure process. Home-sales records for East Orlando show the price for a home has dropped $100,000.
A large number of Waterford Lakes and South Alafaya Trail homes also fell into foreclosure this past year. Many blame home foreclosures on banks’ poor lending practices, but remember that most home buyers bought during the economic explosion that occurred here in 2005. At that time, buyers felt secure in their jobs and in their own economic growth. Home buyers were not prepared to lose their jobs just a few short years after purchasing their piece of the American dream.
Today East Orlando home sellers anxiously await the property appraiser’s report on the value of their homes. Appraisers are instructed by lenders exactly how to determine the value of a home. Some lenders allow property appraisers to draw from a variety of sources to develop their appraisals, using similar homes sold in the community. If a lender requires the inclusion of foreclosures and other troubled-home sales in the appraisal calculations, then home sellers will see their homes appraise for much lower than expected.
Here is an example of how an appraisal can end the sale of a home: One home in Avalon was purchased in 2007 for $725,000. The owners, seeing the value of their home dropping fast, listed their home in early 2009 for sale at $575,000. A contract was written to sell the house for $525,000. The deal was broken when the home appraisal came in at $475,000. What is a home owner to do?
Despite the harrowing dollar figures East Orlando residents see daily, the market is not so gloomy for home buyers who can show stable employment and good credit scores. This is definitely a buyers market for middle-income earners who meet banks’ strict criteria for lending. Interest rates are low and national stimulus money provides options that were not available six months ago. What a difference six months can make.
Article by Evelyn Cichanowski