The Orlando Regional REALTORS® Association released it’s monthly sales numbers for the month of May and Orlando home prices continue to rise. May 2015 brought incredible year-over-year growth in home prices and the number of sales with both numbers topping 10%. This represents the 46th consecutive month that year-over-year median prices have increased and represents a 58.49% increase since 2011.
Orlando Home Prices Rise, Foreclosures Lead the Way
The median home price in May 2015 rose to $181,900, which is a 10.24% increase over May 2014. The numbers are also positive compared to April of this year. Month-over-month, the median home price increased 3.94% from April’s $175,000. The news is also extremely positive when we break down the sales numbers by sale type. Short sales saw a year-over-year gain of 5.97% and normal sales climbed 2.59%. The real winner was the foreclosure category, which saw an incredible 18.62% year-over-year increase.
“The increase in the median home price of foreclosure sales is overall great news for homeowners. These sales have traditionally been holding down values in our area and with these numbers climbing we can expect to see more and more homeowners considering listing their home,” said REALTOR® Kevin Johnson, a team leader with OneBlue Real Estate.
Mixed News for Sellers
While the rise in the median home price is certainly positive news for homeowners who are considering selling their homes, the news was mixed in other areas. The average number of days a home was on the market remained virtually flat at 72-days in May compared to 73-days in May 2014. The average a home sold for compared to the list price was 96.84% in May 2015 which was also virtually flat when compared to 2014’s 96.40%.
What isn’t great news for sellers is that inventory has seen an impressive 8% increase over this same time last year and 80% of the available inventory is non-distressed. This means that there is more competition among those who are looking to sell their home faster. “Sellers are really going to need to choose their REALTOR® carefully during the next few months ensuring they select someone who can make their home stand out against the competition. Using the standard tools won’t fetch top dollar in today’s market,” said Boudreaux.
Homebuyers Need to Act Fast
With many experts predicting interest rates to top 6% by the end of 2015, potential homebuyers need to act fast. We’ve already seen interest rates tick up from May hitting 4.125% for an FHA loan on June 19th. According to statistics from ORRA, the average interest rate in April was 3.69% and in May it was 3.92%. While these numbers seem small, the impact on a homeowner’s monthly payment and the interest on the loan can add up fast.
If a homebuyer had purchased a $181,900 home in April, their monthly payment on principal and interest (P&I) would have been $806.96 per month with a total of $114,971 paid in interest alone during the 30-year term of the loan. If a buyer purchased that same home in June, their payment would be $851.23 (P&I) and they would pay $130,910.25 in interest over the term of the loan. That’s an additional $531 a year in payments and nearly $16,000 in interest over the term of the loan. If homebuyers want to maximize their buying power, they need to act fast while inventory is up and before mortgage rates continue to climb.