According to a government report, new home sales jumped 26.9 percent for the month of March. This was the largest advance since April of 1963. This rebound can be attributed to several factors. The tax credit for first time home buyers is about to expire April 30th so there is a rush of Buyers trying to beat the deadline to take advantage of the tax. Another factor is the weather for January and February may have slowed production of new construction. Lastly, Builders have been offering great incentives for Buyers to purchase homes. There will always be an appeal for new construction over resale homes.
So does this show rebound for new construction? Only time will tell if the number of unit built will keep increasing. Key months to watch will be May and June figures to see if the end of the tax credit has any effect of new construction sales. Central Florida and areas surrounding Orlando have seen similar increases in new construction. Resale inventories on resale homes are at a 4 year low and mortgage rates are still very competitive hovering around the 5.25% -5.5% range.
Only time will tell what impact the recent sput in sales really means. One month of increases does not show a trend to recovery but it is a bright spot when looking to find some positive news in an economy trying to recover.

2010 brings in new requirements for all replacement or new are conditioning units being installed in a home. Starting in 2010 all new units must be R410a refrigerant systems. The new federal law requires all manufacturers to stop production on systems that use R22 which contains ozone depleting chlorine and switch to R410a which is much safer for the ozone and more energy efficient.

Here in Central Florida where air conditioning is a must during the hot summer months, this change will be most notable. Homeowners looking to replace older R22 units will see a slight increase in the cost of these new systems. As R410a becomes more common in the market and R22 is phased out we should see these prices drop. It should also be noted that the production of R22 refrigerant is also being discontinued in 2010. This will create a supply shortage of R22 and watch for prices to increase dramatically as it becomes harder to find this refrigerant.

Homeowners may want to consider changing over their cooling units to the new R410a system in the near future. Not only are these new units more energy efficient and environmentally safer, older R22 units will cost more for repairs making a new unit more attractable to purchase.

2010 is here so what does the Real Estate outlook for Central Florida look like for the coming year. We can expect pretty much the same as 2009. With all 5 year ARM loans coming due, we can expect a fresh round of foreclosures for the year.  The American Banking Association (ABA) is expecting 1.9 million foreclosures for 2010 slightly up from 2009.

Lawrence Yun, chief economist for the National Association of Realtors expects 2010 to be another favorable year for home buyer as market conditions and tax credits are boosting home sales throughout the country. First time home buyer $8000 tax credit was extended to April 30^th so we can expect the first quarter for the year to be very busy with buyers looking to take advantage of this tax credit.

The vacation home market which was hit the hardest with foreclosures is seeing many bargain hunters and investors looking to take advantage of this segment of the housing market. For Central Florida this is no exception. Vacation homes around the Walt Disney area were hit hard with foreclosures as many owners saw their property values plummet on high price properties that were purchased during the boom years. With values cut almost in half, vacation properties are seeing many international buyers come into the market who had passed on properties during the peak years of home sales.

Overall we can expect a steady stream of foreclosures for 2010 making the year another banner year for home buyers. Tax credits and favorable pricing will drive the sales throughout 2010. While inventory will be steady buyers can also expect competition from investors looking to pick up hot foreclosure properties.

WOW.. What great summer it has been in Real Estate for the Central Florida market. Sales are up, inventory is down, interest rates are still at historic lows, and home prices are still fantastic. It truly is the best time to buy a home.  For all those buyers sitting on the fence waiting for the bottom of the market, guess what???? You are missing it as I type this blog.  Several areas around Orlando have seen home prices level off and in some cases even increase slightly.

If you plan to take advantage of this foreclosure market now is the time to act. The longer you wait the fewer foreclosures that will be available and in conditions that are acceptable. Also for first time home buyers the tax credit of $8000 expires December 1^st so time is running out. Take advantage of this tax credit before it is gone.

As the Florida summer begins and the housing market continues to heat up, it should also be noted that the Sterling hit an 8 month high at the end of June at just over 1.6715 against the U.S. dollar. This is fantastic news for U.K. vacation home buyers looking to pick up foreclosure deals here in Florida. We only need to look back a few months to see the Sterling trading around 1.41 against the dollar.  

The positive data is showing that the U.K. housing market is starting to rebound and that the investors are pulling out of the safe haven of the U.S. dollar to look for higher yielding investments. The stronger pound allows U.K. Buyers to refinance their properties back home to purchase investments here in the U.S.  

The Euro is also seeing some strength against the Dollar but is still under pressure as the areas that encompass the Euro are still vulnerable and investors are weary as these markets may have not reached bottom yet. The strength of the pound will lead the way for both the Euro and the Dollar in the coming months. A strong pound may keep both these currencies low which will mean opportunity for U.K. buyers that are looking to purchase properties here in Florida.

While the pace of re-sale homes is hitting record pace due to the flood of foreclosures, the supply of new homes in the surrounding Orlando area has hit an 11.7 month supply.  The average for most major markets is  1 ½  to 3 months supply.  The high supply of homes is creating greater downward pressure not only on the amount of home starts but also the prices of new homes.

Orlando is not the only major market that has high inventory; Southern California, San Diego, and Las Vegas are also having severe problems. While the Orlando market is trying to correct the inventory problem, with 18,423 ready to move in properties and 12,000 starts within the last 12 month, other markets are making faster progress.  Atlanta for example has more than 20,000 move in ready properties with fewer than 9000 new construction starts for the same period.

With housing construction hitting a record low in April, economist are wondering if the positive reports from the Home Builders Association  prove that we are at the bottom of the cycle for new construction. The latest report shows that single family construction rose a slim 2.8 percent to an annual rate of 368,000. While this is positive for single family construction, apartment construction fell 12.8% for the same period.  Economist had hoped to see a positive increase for the month for both sectors but this data shows that the housing market is still struggling with the worst collapse in the housing market since post World War II.

While the housing starts are still down, there are positive signs that the market is correcting itself. Builders are reporting that there inventory of homes is dropping and the new incentives for first time home buyers is helping to drive sales of new homes.

We are far from out of the woods as some experts feel the peak of the Foreclosure market won’t hit until the first quarter of 2010. The huge inventory of resell homes and foreclosures are putting huge pressure on New Home builders who must lower prices and offer incentives in order to sell homes.

In a close call with the State House and Senate budget committee, the new UCF Medical School in Lake Nona appears to be getting most if not all the money that they have requested. Both chambers agreed to erase a budget short fall of 9% base cuts that were made earlier in the session. The medical school will end up with 19.9 million this year which is critical for UCF to hire and train faculty for the inaugural class that starts in August of 2009.

The UCF Medical School is a centerpiece for the planned medical city that when completed will be the hub for scientific research in Central Florida which will generate over 30,000 jobs and a projected tax revenue of over $460 million during the next 10 years. Located in South East Orlando, the Orlando Medical City will be host to world class research and biotech companies.

Students are expected to start full time at the new location currently under construction in Lake Nona when the new school year starts. While news of the full funding is great to hear, Dean of the Medical School (Dr. Deborah German) is optimistically cautious as she waits the legislature’s final vote for funding and Governor Charlie Christ signature on the bill.

The central Florida housing market is continuing to improve and current sold and pending housing units show a prime example of Orlando’s market improving.  For the first 4 month of 2009, 6807 properties were sold in the 5 county regions of Lake, Orange, Osceola, Polk, and Seminole compared to 4704 for the same period in 2008. The current list of properties pending is 8810 units. This is a tremendous increase over same period 2008.

Bank properties are the bulk of units sold as both investors and first time home buyers are looking for great deal. With low interest rates and a tax credit of $8000 for home buyers, now is a great time to take advantage of bank owned properties and foreclosures.

The increase in sales has put pressure on the current bank owned and foreclosure homes listed for sale. Realtors are reporting that foreclosure properties are often getting multiple offers and often are selling for higher than the listed price offered by the Bank. This is not to say that the current foreclosure crisis is over but that Buyers are realizing that there are great deals out there and this puts pressure on the foreclosure homes listed for sale.  The sooner these homes can sell, the faster out market will begin to rebound and housing price return to normal appreciation.

If you are a Buyer in this market waiting for a great deal, now is the time you need to act. Don’t kid yourself that this market will be around for a long time. It is true that there will be more distressed properties that will go into foreclosure and many parts of Florida are still seeing downward pressure on housing prices but for Central Florida the trend is turning and this local market is beginning to improve.