Orlando area’s home-price rebound proves spotty

Posted on by Listify Me

Orlando was hailed last week as one of the biggest “turnaround towns” in the U.S. for residential real estate last year, but a new analysis of local home sales shows some areas are turning faster than others.

Based on resale prices and other factors, realtor.com ranked Metro Orlando as third-best in the country in terms of its recovery from the housing slump.

But as most area real-estate agents know, different neighborhoods are recovering at very different rates. An Orlando Sentinel analysis of average sales prices compiled by local Realtors points to increases in about three-fourths of the ZIP codes in the Realtors’ core Orlando market (mainly Orange and Seminole counties) from the end of 2010 to the end of 2011. Prices in all but one of the remaining ZIPs were down for the year.

The hot spots in 2011 were as diverse as Altamonte Springs and Windermere.

“Well, there’s not a single unifying theme between some of these places, but it’s reminiscent of the old adage: All real-estate markets are local,” said University of Central Florida economist Sean Snaith. “For some of those areas, it’s a desirable location to live. For some of the others, it’s a function of prices falling so far prior to last year.”

Across the core market, existing-home prices were up about 13 percent during the year, to an average of $166,305 in the fourth quarter, according to the Orlando Regional Realtor Association. The two ZIPs with the biggest increases are Seminole County neighbors: west Altamonte Springs (55 percent) and west Longwood (up 44 percent). The two ZIPs with the biggest declines are on opposite sides of the core market, in Geneva (down 37 percent) and Mount Dora (down 38 percent).

Four factors appear to be driving up prices in the area, based on an analysis of the ZIPs with the largest increases in 2011: a high volume of affordable-condominium sales; the desirability of certain well-known, affluent communities; a move toward urban living in the region; and growth related to the ever-expanding Medical City at Lake Nona and the University of Central Florida in east Orange County.

A heated investor market for condominiums drove up unit prices throughout 2011 and created upward pressure in areas that about six years ago had been consumed by apartment-to-condo conversions, most notably Altamonte Springs, MetroWest and Ventura. Cheap condo prices a year ago made those areas real-estate markets in which prices could only get better, and improve they did.

Demand may be strongest in those relatively affordable, condo-heavy communities partly because the Orange-Seminole market has only a three-month supply of houses listed for less than $100,000, said David Welch, a broker for Re/Max in Winter Park. In comparison, the market has a five-month supply of houses overall. A six-month supply is considered a market in balance.

Welch also noted that, while prices overall for the local market held steady at about $115,000 from the beginning of 2011 until the end, the median price of foreclosed properties increased from about $60,000 to about $70,000.

The perennially desirable Winter Park and Windermere areas, both threaded by chains of natural lakes, also posted strong average-price gains for the year, according to the data compiled by the Orlando Realtor group.

And several downtown Orlando areas, including Delaney Park, experienced rallies that may reflect an increase in single buyers and childless couples not interested in the suburbs.

U.S. census numbers released in December pointed to a shift in demographics that may be driving urban communities such as Delaney Park, which is relatively old, and Baldwin Park, which is very new. According to an analysis of census data by the Pew Research Center, just more than half of all adult Americans — a record-low 51 percent — are married. And the center predicts that the share of married couples among all adults could fall below half within a few years; in 1960, by comparison, 72 percent of adults 18 and older were married.

Lake Mary real-estate broker Doug Packard, who specializes in representing buyers, said the sales numbers may speak to a “mini-trend” of buyers passing on the suburbs.

“For some, the suburban lifestyle just doesn’t work,” he said. “You rarely see people move from the urban area.”

Packard worked last year with a longtime client, David Kind, who wanted to sell his house in Lake Mary and move to Winter Park. Kind said his family was “really happy” in Lake Mary, but the daily realities of commuting on Interstate 4 had become daunting. The family did not get top dollar for its Lake Mary home, selling it in a depressed market, but moved anyway into Winter Park’s Windsong community.

“We were looking for a place where we’d be close to amenities, shopping and top schools,” Kind said. “We wanted a neighborhood with sidewalks and streetlights. For us, at least, we really wanted the quality of life for our family, and that outweighed other considerations.”

Other ZIP codes near the top of the list include Lake Nona, with its emerging residential neighborhoods built near the development’s burgeoning Medical City. Similarly, growth at the University of Central Florida has driven demand in the Alafaya Trail area of east Orange County.

The boost in prices overall helped drive Metro Orlando into a top position in realtor.com’s ranking of “turnaround towns.” That ranking, released last week, was based on listed home prices, unemployment figures, unsold-home inventories and the number of Internet users searching the area’s for-sale listings.

Orlando, which ranked third behind Miami and Phoenix, led the nation for the number of people searching its home listings online. Eight of the top 10 metro areas ranked as turnaround towns were in Florida.

The real-estate-research firm Trulia also released a report last week showing Orlando among its top 10 U.S. metro areas in terms of interest coming from online house hunters. Trulia chief economist Jed Kolko said it’s all about affordability.

“What I think is behind the search activity we’re seeing for Orlando, and for Florida in general, is that prices have fallen so much during the bust in Florida that it looks more affordable to many people in other parts of the country than it has looked in years,” Kolko said.

mshanklin@tribune.com or 407-420-5538

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