Orlando, FL (PRWEB) April 15, 2006
Central Florida's rental home market has been a roller coaster ride to match Disney's finest over the last year. Just last spring everyone was scrambling to jump on the bandwagon as prices soared and new home releases were snapped up in hours. Then reality took over. Both established and new owners found that the numbers didn't add up. Many looked to the strong market to take a profit and run, but only a few jumped quickly enough. Since then, it has been downhill all the way.
According to one of the area's leading vacation home specialists, Hightower Realty (http://www.hightower-realty.com), the most recent numbers seem to hint at the first signs of a recovery in the market, although it is too soon to be sure. There is still no let-up in the number of homes being listed for sale, but it could be that we are now starting to see a few more buyers around. This is hardly surprising, with some homes being offered at bargain prices, 10% or more below what they would have been expected to fetch a year ago.
Hightower Realty's latest market report warns that even if this slight improvement is confirmed, it will be a long time before anything approaching balance is restored to the market. Average sales prices are going to continue to fall for at least a couple of months, probably longer. Then we expect to see a prolonged flat period while the excess inventory is gradually absorbed. We are unlikely to get any significant recovery in prices until the end of the year at the earliest, more likely well into 2007.
Hightower Realty's owner/broker, Denis Le Marchant-Smith, observes 'we have now reached the point at which an amazing one in every ten of the more than 20,000 short term rental homes in Central Florida is now listed for sale'. Many of the area's 150 rental home communities are a sea of yard signs.
Newer communities are the worst affected, particularly those that were identified by speculators as a good short term investment. One of the most recent developments, Solana, has 52 out of 237 homes listed for sale on the Multiple Listing System, and this number excludes several 'for sale by owner' homes. Older, mixed-use communities are doing much better. Indian Point, now becoming a popular area for permanent residences, shows only 35 of its 504 homes listed for sale on the MLS.
Even now, for every home that finds a buyer, four more are added to inventory. Only 500 re-sales on vacation home communities have closed since the beginning of the year, and quite a few of these have been homes that have been bought as permanent residences, taking them out of the rental homes stock. The take-up of a proportion of older rental homes by the residential market has been an important factor in avoiding an even more dramatic collapse than we have seen. It has helped keep prices up in some communities. In other communities, particularly along the US27 corridor, which is not yet a popular residential area, prices have fallen more dramatically.
Hightower Realty offers a weekly newsletter to keep owners, buyers and sellers up to date with the volatile market in Central Florida.
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