You are running out of time to vote for www.RealEstateOptimist.com. Tomorrow is the deadline to choose David Welch's Orlando Real Estate Blog as the top real estate blog in Orlando. Google already says David Welch has the top two blogs for Orlando real estate. Check for yourself, just google "Orlando real estate," and see who has the top two spots. This is organic not paid results. Thank you for your vote.
Reuters reported that housing starts fell over 10% in October compared to the rate being built in September. At least a part of that was caused by a huge drop in multi-family. These types of project are up and down, and with commercial real estate on its heels right now it does not surprise me that these projects are so volatile right now. The single family side of the equation has to be evaluated in the context of everything that is going on. The first time home buyer tax credit was quickly approaching expiration, and I believe earlier in October there was sentiment that it might not be extended. Although talk of extending the credit has been around since July and August, what seemed like a sure thing ran into some challenges. First, the deficit for last fiscal year came in at a whopping $1.4 trillion. Second, there was not a lot of evidence that the tax credit was creating a turnaround as much as helping to stabilize the housing market. Third, news broke in October, I believe, that there were 100,000 suspected fraud cases related to the existing credit.
I believe that this growing sentiment that the credit might be extended guided some buyers toward resales. Even when it became apparent the credit would be extended and expanded there were rumors out there that if you contracted before December 1st, you would not qualify for the new credit. This type of misinformation, could have also had the effect of buyers putting off decisions to contract for a new home if they were hoping to take advantage of the new tax credit provisions. Maybe I am completely off base with my analysis of this situation, but here in Orlando we saw tremendous sales in October with more than 2,200 sales closed last month and nearly 4,000 contracts (not offers, contracts) written in Ocotober. I believe that was the most contract written so far this year. I continue to say if banks will start making decisions on short sales, REO's and getting loans closed we will get through this faster and healthier. Orlando continues to post around 9,000 pending sales, while our active inventory remains around 16,000.
I titled my blog Real Estate Optimist for a couple of reasons. First, the obvious one is that I sell real estate. I became convinced that I wanted to have a career in real estate in graduate school at Rollins College. In one of my Investments classes we discussed a study the University of Chicago conducted analyzing all types of investments along what is called the efficient frontier. The efficient frontier is a curve that defines the optimum portfolio return for a given level of risk. The only investment found to be in every efficient portfolio was...wait for it...wait for it...real estate. They did not just include the typical stocks and bonds type of investments either. Commodities, art, wine, coins and stamps and other types of investments were included in this study that went back to the stock market crash of 1929. It made intuitive sense to me since, owning your home provides a sense of security and safety from market factors.
But why Optimist and not Realist? Let's face RealEstateRealist.com would be a great play on words, but I have seen time and time again on my customer surveys that my enthusiasm is what attracted people to me. Believe me, I get down in the dumps too, it's easy to be a pessimist. When was the last time you picked up the newspaper and read good news. OK, if you are a UCF Knights fan like myself, the Orlando Sentinel has had lots of great articles about UCF's first ever win over a top 25 ranked team. Our men's basketball beat UMass in their season opener, and our women's soccer made the NCAA's ranked in the top 20. So there has been a lot of great news for UCF athletics this weekend. I have been a fan since 1982 when I started at UCF. I have traveled to Troy, and sat through pouring rain in 27 degree weather, and Georgia Southern, Eastern Kentucky, Georgia, Georgia Tech and a couple of trips to Florida. There was not so much good news back then, but I was optimistic.
Real estate has been a reliable investment in the past, and it is again now that the market has stabilized. If you don't believe me, what about all those investors buying up foreclosures?
Well my world premier video aired last night on HGTV's House Hunters, and friends from all over the country watched with me. I want to send a big thank you out to Doug and Lisa, the buyers, because if it was not for them I would not have had the opportunity. I would also like to thank the crew and producers who managed to keep me from looking too goofy. I didn't even look that fat - yeah! If you did not get to see last night's show, it will be on several more times over the next couple of months. You can check the HGTV website for other dates and times.
Today, it is back to reality. I have a walk-through this morning, closing this afternoon, contract extension, a buyer's CMA, and an offer to follow up on. If it was only as easy as it is on tv. Show three houses, pick one and move in. For more on buying and selling real estate, check out my homepage www.davidwelch.com. I have a number of tools right on the main page for buyers and sellers. Right at the very top of the page you can search for Orlando area real estate. This is a new tool I have just added to give you a complete listing search of our area. Sellers, I also have tools right on the front page for valuing your home as well as several pages devoted to helping you with marketing tips. Let me know how I can help you with all your real estate needs.
Which house will the choose? I cannot say, because I am sworn to secrecy. Watch HGTV's House Hunters tonight at 9:00pm (check your local listings outside Orlando) to find out which home Lisa and Doug will pick. I would love feedback from everyone on my performance as "the Realtor". I am not only a Realtor in real life, but after tonight I can say that I play one on tv too.
I am also pleased to say that my blog is getting a lot of attention. One of my posts has been quoted by the Colorado Springs Business Journal; I have had my posts quoted in the Orlando Sentinel; and I am now a featured blogger at Realtor.com - the number one real estate website in the world. Go to Talk.Realtor.com, and look for me on the right side of the screen. My posts are regularly featured, and I have also been asked to answer questions on Ask A Realtor. My blog is also in the running as one of the top blogs in Orlando. Please vote for me by clicking on the Orlando Sentinel.
I sell real estate here in Orlando too, so tune in tonight then give me a call tomorrow and we will talk about your real estate needs.
Tomorrow, Thursday November 12th at 9:00pm look for me on HGTV's House Hunters. The last time I checked, my episode was still scheduled to air at that time. Check your local listings though to make sure. I want to thank Lisa and Doug for asking me to be part of this home search, and also for applying to be on the television show. I would not have thought to apply to be on the show myself. Since being part of this, I have been checking and House Hunters has actually already been to Orlando a few times this year. My friends at Talk.Realtor.com tell me that Orlando is pretty much at the top of the list for real estate searches.
I cannot think of a better place to be practicing real estate. Despite all the negative press you read every day, the bad times only last for a little while. I suspect we may very well be dealing with foreclosures for another three years as the banks work through their backlog. In the mean time, we are writing 3,500 contracts (not offers) a month and closing more than 2,000 transactions. The closings are what I would expect for our market, and the contracts are exceptionally strong numbers. I believe these numbers indicate a renewed demand in Orlando real estate. It is no wonder Orlando real estate searches have been so strong on Realtor.com and so many House Hunters episodes have been filmed here in The City Beautiful.
Orlando real estate prices have been very stable for seven months now bouncing along the bottom between $125,000 and $135,000 since April. With the big push by first time home buyers to get into a home before the November 30th tax credit deadline, I am expecting prices to take a tumble this month. First time home buyers purchase less expensive homes for the most part, so I expect prices to be a bit lower in November and probably December. Looking at the pending inventory of nearly 9,000 homes, there are 3,775 that are expected to close this month with a median list price of $124,500. There are a couple of factors to consider though. First, 3,775 will not close this month. Looking at recent history, we can probably expect about 2,000 of them to close including the 250 or so that have already closed. The other consideration is the role short sales will play regarding prices. A lot of the ones that will not close are short sales which have much lower prices than "normal" sales. However, the short sale prices are typically much higher than the REO's. In the end it has typically been a wash with short sale prices hovering just below the overall median price.
With the list price running at $124,500, I expect our median sales price to be around $120,000 this month. While the impending end of the tax credit might have accounted for more lower priced sales this month, the extra competition for well priced homes likely pushed offers closer to the asking price. With the extension of the tax credit, I suspect many of these sales will end up closing in December as the urgency to close by November 30th wanes. With the extension and expansion of the tax credit, I am expecting the tremendous demand continuing well into next year. Until hiring picks up though, look for our prices here in Orlando to stay in a very affordable range. I do believe that we will see a slight tick up in hiring in the first quarter. I believe we may already be seeing a little improvement in hiring this quarter, but nothing to get too excited about yet.
By the way, watch for me on HGTV's House Hunters this Thursday November 12th at 9:00pm. Check your local listings.
The extension and expansion of the home buyer tax credit is on it's way to the White House for the President's signature as part of a broad financial package that will extend unemployment benefits. Notice that I did not call it a first time home buyer credit, because it is more than that with the expansion. First time home buyers (those who have not owned a home in the past three years) still qualify for up to $8,000. The income restrictions have been raised significantly to $125,000 for singles and $225,000 for joint tax filers. However a limit of $800,000 has been placed on the value of the home purchased. So, if you have been waiting to cash in that trust fund to purchase your first $1 million McMansion try scaling back to $800k to qualify for the credit. This latest extension of the credit begins December 1, 2009 and is good for closings through June 30, 2010. You must be under a binding contract by April 30, 2010 however to qualify for the credit.
Repeat purchasers get a little less back from Uncle Sam. If you have owned and used a home as your principal residence for five consecutive years out of the last eight, you can qualify for a credit of up to $6,500. The same income and home price restrictions apply. It is also important to note that the credit is only for primary residences. Repeat purchasers cannot use the credit for a second home. I cannot understand why this was important to law makers. Frankly, if you look at the states that need home buyers the most, they are also the states that probably have the greatest number of second home buyers (Florida, Nevada and California). There are other provisions in this legislation to help deter fraud, but I have not heard specifically what they are. Personally, I see the April 30 to June 30 period as having a tremendous potential for fraud as buyers and sellers once again come under pressure of the deadline.
On a completely unrelated subject; my House Hunters episode is tentatively scheduled to air November 12, 2009 at 9:00pm. Check you local listings.
October closed out our fifth month in a row with over 2,000 closed sales. So far 2,004 have been posted for the month with a median sales price of $130,500. We have been hovering around $130,000 for seven months now ranging between $125,000 and $135,000. Of the 2,004 closes sales 832 or 41.5% were bank owned, almost 21% were short sales with 415 and the remaining 757 were "normal" sales. As usual we are seeing a pretty big difference in the median prices of these three groups. REO's came in at $80,000 while short sales were just under the over all median with $127,000 and "normal" sales had a median sales price of $180,000. The 415 short sales closed represent only about 7.5% of the total number of short sales under contract.
Total pending sales stand at 9,072 with 1,782 being REO'snd a whopping 5,544 classified as short sales. That leaves on 1,746 "normal" pending contracts. The "normal" sales tend to be higher priced homes, but also tend to close a bit more quickly once they are under contract. Short sales continue to be a drag on the entire real estate system taking six to eight months to obtain approval. The total inventory is down slightly to 15,778 with 1,255 bank owned properties and 5,583 short sales. Combined distressed properties represent just over 43% of our active inventory.
Buyer beware. The tax credit has not I repeat has not been extended yet. It is looking more likely with key Senators agreeing to extend the current credit through the end of April and even as far as July 1, 2010. There is also an agreement to expand the qualifications for the credit to higher income buyers and repeat buyers who have lived in their home for five consecutive years out of the last eight. Right now this agreement has not even been voted on in the Senate. This is just a tentative agreement to go forward with legislation. There are still a number of obstacles in the way including the House of Representatives where concern over fraud from the exisiting program may hold things up. It is estimated that up to 100,000 of the tax credits submitted may have been fraudulent. That is a lot of zeros, and adds up to an $800 million ripoff.
Many in the Realtor community believe that it is just a matter of getting some fraud protections in place before the credit is extended and expanded. For now, it is not a done deal so govern yourself accordingly. Get your deal closed by November 30, 2009. Be careful with that date too, because many lenders are taking an additional day to fund transactions. November 30th is also just after the Thanksgiving holiday. A lot of lenders and title agents like to take that time off too. I would really recommend trying to close before Thanksgiving just to be safe. If the tax credit is extended and expanded, I will have the details on my tax credit web page.
Orlando Real Estate, news, statistics, marketing reports, insight, opinions. Orlando real estate includes, Winter Park Windermere, Apopka, Ocoee, and Winter Garden, as well as Conway and Dr. Phillips areas of Orlando.
Disclaimer: ActiveRain Corp. does not necessarily endorse the real estate agents, loan officers and brokers listed on this site. These real estate profiles, blogs and blog entries are provided here as a courtesy to our visitors to help them make an informed decision when buying or selling a house. ActiveRain Corp. takes no responsibility for the content in these profiles, that are written by the members of this community.
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