The Orlando real estate market, contrary to the chatter of mainstream media, is not a vast wasteland of empty homes, with entire neighborhoods devoid of life. Dig a little deeper, talk to individuals who have “boots on the ground”, i.e. realtors, take a closer look at the numbers, and you will see a market which is showing real signs of growth – slow growth, yes, but growth nonetheless.
One of the biggest hindrances to rising real estate prices here in the home of Universal studios and Disney Land is the “shadow inventory”. Here in Orlando, this is estimated at more than 7,300 pending short sales – nearly half of them on the market. Even so, inventory is said to be down by 40% while home prices are said to be up a bit – about 7%. In one instance, the increase was more like 70% – Orlando Realtor David Welch described a seller who sold his house at $1,250,000, when a neighbor, who had the same exact floorplan, sold theirs a few months prior for only $725,000.00.
Every realtor knows the impact that short sales have on housing prices and sales, however, banks are now taking advantage of lower inventory to push their prices higher. According to Welch:
“I have it from a very reliable source, some of the bank owned properties are being priced substantially higher than their broker price opinions. They are “testing” the market to see if they can push prices up a bit. You see, many of the bank owned sales are all cash deals and so there is not an appraisal issue. Of course, at least one that I believe is a test property is over priced by 30%. If they went 10% over they would probably get it sold.”
Real Estate Consultant Rick Nayar, with the Centurion Realty Group, describes a “bidding war” that took place in August of this year on a home that was in the Central Florida area. “Two weeks ago, Centurion Realty Group placed a house on the market. The price was calculated on real current market value. The price on the house was $147,500. Within 2 days, we received 47 offers for the property. In the minds of most real estate agents, 47 bids on a single property within 48 hours qualifies as a bidding war.”
Nayar believes that Orlando and the Central Florida area are seller’s markets rather than buyer’s markets. The real truth is, numbers can change greatly from town to town, and in some cases, even neighborhood to neighborhood, so before purchasing a home in any location, it’s important to gather facts from a wide variety of sources in order to make the most informed decision possible.