The Pulse of the Central Florida Real Estate Market June 2017
Thoughts from Andy Brown, Director of Education and Training at The Climer School of Real EstateOne of the questions that I get from my new students in class on a regular basis is, “Is this a good time to get into real estate?” My answer for the past few years remains, “Yes! Now is a fantastic time to be in real estate. This is one of the best markets that I have ever seen.” The central Florida real estate market is extremely hot. It has been hot for a few years and I believe it will remain hot for a few years to come.
I want to quote and then talk about some statistics from the Orlando Regional Realtor Association’s (ORRA) June 2017 market pulse. One of the most telling statistics to me is average days on the market. Average days on the market for listings in May 2017 was 54 days. This is down from a high of 82 days in February 2016. Everything goes gently up and down however even as recently as January 2017 in February 2017 stays on the market were 70 and 69 days. In May 2017, there was a total of 8781 total listing inventory. One year ago, in May 2016 there were 10,553 listing inventory and in May 2015, two years ago there was total of 11,798 total inventory listings. In May 2017. Of the 8071 number, there were 4670 new listings. This is kind of an amazing number. Over half of the total listings are brand-new. This means they are selling like hot cakes.
According to ORRA’s report, there were 3817 closings. Because there are two sides to every closing. This means that there were 7634 sides that were closed. In January, there were only 2213 closings, meaning potentially only 4426 realtors could get paid that month. Another important statistic is how the number of listings equates to months of sales inventory. In May 2017 number of listings equated to about 2.25 months of inventory. This is down from a high of five months of inventory in January 2016. You can interpret this any way that you choose. Some will interpret this as not a good market because there’s not much going on. Others will interpret this as it is a good market as sale are very hot. With my 25 years’ worth of experience, this is how I interpret the data. There are sellers who have homes that buyers want to buy, and there are buyers that are buying them.
Mortgage rates are also still relatively unbelievably low. The average mortgage rate in central Florida in May 2017 was a tiny bit over 4%. When I first got into the business 25 years ago, I first closing with an FHA fixed-rate mortgage was in the nines. It was a young married couple and their parents were ecstatic that rates have fallen below double digits. I remember how excited everybody was when 30-year mortgage rates moved down into the low eights.
The number of new contracts is a telling market statistic. May 2017 produced 3750 new contracts that month. Down from a low of 2179 new contracts in September 2016. There was also a total of 6524 listings total under contract in May 2017. 996 listings were also taken off the market completely in May 2017. In the last three years the lowest month for withdrawn and expired listing seems to have been able of 2017 with a total of 771. The high in the last two years was in September 2015 when 1360 listings were taken off the market due to being withdrawn or just expiring because they didn’t sell.
Here are some other numbers I particularly enjoy. The average sales price in May 2017 was $258,300. However, the median sales price was $218,000. A lot of people don’t understand the difference between average and median. A lot of people don’t understand the significance of the difference between average and in how that can help. Most people are used to only talking about the average. You take number sales, which happened to be 3817, add up all the sales prices, and then divide by the number of total sales; 3817. This would be the average sales price. To get the median sales price, you would line up all 3817 sales by dollar figure in order. Then pick the one that is exactly in the middle. That is the median sales price. One half of all sales were less than $218,000 and one half of all sales were more than $218,000. What this does is gives you an indication of where the hot area, sometimes referred to as the sweet spot, is in your real estate market. This can be very important information if you know how to interpret correctly as you will know where you should be spending your time while your prospect.
I hope my summation of the real estate market in central Florida has helped you. The whole idea of what having a real estate license is about to find customers, give them into a new contract, close and make money and have fun. You don’t learn how to do this in your pre-license class however I do teach you some tips and tricks regarding how to make more money have more fun, and save time in my Post 45 class. If you are in your first two years of having a real estate license you need your mandatory Post 45 Hour class. You positively want to come to a Post 45 class at The Climer School of Real Estate.