A summer of modest economic growth is helping dispel lingering fears that another recession might be near. Whether the strength can be sustained is less certain. The economy grew at an annual rate of 2.5% in the July-September quarter, the Commerce Department said Thursday. But the growth was fueled by Americans who spent more while earning less and by businesses that invested in machines and computers, not workers. The expansion, the best quarterly growth in a year, came as a relief after anemic growth in the first half of the year, weeks of wild stock market shifts and the weakest consumer confidence since the height of the Great Recession. The economy would have to grow at nearly double the third-quarter pace to make a dent in the unemployment rate, which has stayed near 9% since the recession officially ended more than two years ago. For the more than 14 million Americans who are out of work and want a job, that's discouraging news. And for President Barack Obama and incumbent members of Congress, it means they'll be facing voters with unemployment near 9%. "It is still a very weak economy out there," said David Wyss, former chief economist at Standard & Poor's. For now, the report on US gross domestic product, or GDP, sketched a more optimistic picture for an economy that only two months ago seemed at risk of another recession.

Some economists doubt the economy can maintain its modest third-quarter pace. US lawmakers are debating deep cuts in federal spending next year that would drag on growth. And state and local governments have been slashing budgets for more than a year. Obama's $447 billion jobs plan was blocked by Republicans, meaning that a Social Security tax cut that put an extra $1,000 to $2,000 this year in most American's pockets could expire in January. So could extended unemployment benefits. They have been a key source of income for many people out of work for more than six months. Nor is the economy likely to get a lift from the depressed housing market. Typically, home construction drives growth during an economic recovery. But builders have been contributing much less to the economy this time. Wyss said that the collapse of housing had probably depressed annual growth by as much as 1.5 percentage points in the past two years. Paul Ashworth, chief US economist for Capital Economics, predicts that growth will cool in the fourth quarter and next year. "While our baseline forecast does not include an outright contraction, we expect GDP growth to average a very lackluster 1.5% next year," Ashworth said in a note to clients.

Surprise! Dodd Frank cost passed on to consumers

Bank of America CEO Brian Moynihan defended the bank's decision to impose a $5 debit card fee on customers next year, saying it was needed, in part, to recoup billions of dollars in costs from complying with Dodd-Frank law. "I have an inherent duty as a CEO of a publicly held company to get a return for my shareholders," he said at the Aspen Institute in Washington. "At the same time, I have an inherent duty to do a great job for my customers." He wouldn't say if other Bank of America fees would be raised. He said the bank — the nation's largest mortgage lender through its purchase of Countrywide Financial — is trying to work through the backlog of its mortgage foreclosures and "find a resolution" with the state attorneys general suing Bank of America and other banks over their mortgage practices.

housing should be the priority

National Association of Realtors (NAR) President Ron Phipps spoke at the New Solutions for America’s Housing Crisis forum, where he joined a panel of experts to discuss solutions for addressing the country’s housing and economic challenges. The event was hosted by Economic Policies for the 21st Century and the Progressive Policy Institute. “As the leading advocate for homeownership, Realtors® know that issues like affordable financing, natural disaster insurance, the mortgage interest
deduction, and foreclosures and short sales don’t just affect people who own a home – homeownership shapes communities and strengthens the nation’s economy,” said Phipps, broker-president of Phipps Realty in Warwick, R.I. “America needs strong public policies that promote responsible, sustainable homeownership and that will help stabilize the nation’s housing market to support an economic recovery.” Phipps said that housing is not recovering at the rate it should be and called on legislators and regulators to do no harm. He said that proposed legislation and regulatory rules or changes to homeownership tax benefits need to help America out of today’s economic struggles and not further harm consumer confidence or exacerbate problems within the fragile real estate industry.

Overly stringent standards and lower mortgage loan limits are preventing qualified borrowers from getting loans, and Phipps called on lenders and regulators to reduce the overcorrection in underwriting standards for mortgages. He urged support for
policies that ensure qualified borrowers can obtain safe and sound mortgages in all markets at all times and encourage sound lending without high downpayment requirements. “Realtors® support strong underwriting, but too-stringent standards are curtailing the ability of creditworthy consumers from obtaining mortgages to purchase a home, and that’s impacting the recovery,” said Phipps. “Making mortgages available to creditworthy home buyers and streamlining loan modifications and short sales will help stabilize and revitalize the housing industry and reduce the rising inventory of foreclosed homes.” Phipps recommended that political and industry leaders work together to help reshape real estate and put the country BOAk on the right track. “Our goal is to help ensure that anyone in this country who aspires to own their own home and can afford to do so is not denied the opportunity to build their future through homeownership,” Phipps said.

Shadow inventory improves but still threatens housing recovery

Despite all those millions of distressed properties out on sale, depressing home prices even further, there is one glimmer of hope according Standard & Poor. According to the report the time it would take for banks to purge all of this so-called "shadow inventory" from the market (through foreclosure sales, mortgage modifications and other measures) shrunk to 47 months during the second quarter, a significant drop from the 52 months it estimated for the first quarter of this year. The report also found that the total dollar value of the loans on these properties -- known as non-agency loans because they are not backed by Fannie Mae, Freddie Mac or the Federal Housing Administration -- also fell to $405 billion at the end of June from $433 billion three months earlier. S&P said the decline was helped by stabilizing liquidation rates and by fewer borrowers falling behind on their mortgage payments as the economy slowly recovered during the quarter.

S&P estimates that there are still a total of between 4 million and 5 million homes, including those with agency-backed loans, in shadow inventory, an amount that continues to jeopardize the housing market's recovery. Nevertheless, Fannie and Freddie are looking to rid themselves of a large percentage the shadow inventory they do have -- and quickly. Earlier this month, the Federal Housing Finance Agency (FHFA), the Treasury Department and the U.S. Department of Housing and Urban Development were seeking suggestions on how to dispose all the repossessed homes now owned by Fannie Mae, Freddie Mac and the Federal Housing Administration in a way that would benefit local communities.

Mortgage markets in the U.S., which remain on government life support, could be rattled by the downgrade of the U.S. credit rating, potentially raising borrowing costs for consumers. Given the "sufficiently perilous" state of the U.S. mortgage market, a downgrade "can do nothing but harm the market," says Karen Shaw Petrou, managing partner of Federal Financial Analytics, a research firm in Washington. "The question is how much?" To be sure, no one knows for certain the impact of the unprecedented downgrade on the mortgage market, even if that market is fundamentally intertwined with the federal government.

One concern is that downgrades may trigger forced selling by mutual funds or foreign investors to comply with investor-specific capital requirements restricting them to assets rated triple-A. But analysts said that most institutional investors' rules for investing in government-backed mortgage debt aren't contingent on ratings. And with investors seeking traditional safe-haven assets such as Treasury and government-backed mortgage securities, "there just doesn't seem to be much else to invest in," says Andrew Davidson, a mortgage-industry consultant in New York. "What would people put
their money in if they sold their agency mortgages? It's hard to see what the trade is."

Mortgage rates are closely tied to yields on the 10-year Treasury note. Rising demand for Treasurys pushed down yields over the past two weeks, even as the threat of a U.S. default from the debt-ceiling debate in Washington dragged on, because investors looked for less risky assets amid concerns over the European debt crisis and the sluggish U.S. economy. Mortgage rates dropped to an eight-month low last week, with 30-year fixed-rate mortgages averaging 4.39% for the week ended Thursday, according to a survey by Freddie Mac. Still, the uncertainty created by the downgrade has nvestors on edge. The interplay of a downgrade, on top of the euro-zone crisis and renewed fears over a double-dip recession in the U.S., could lead to increased volatility in mortgage markets. "There are so many moving parts to this that no one really knows how it will go," says Mr.Simon.

Home prices trending up

Home prices and inventory levels are trending upward in many US cities tracked by Altos Research, according to the firm's latest Housing Market Update. The median national home price for all 26 markets covered by Altos hit $450,358 in June, up from $444,273 in May. Meanwhile, in the past three months, listing prices rose 2.31% and inventory levels grew 3.52%. The only city to report a drop in home prices in June was Las Vegas and even that was a mere 0.86% decline when compared to the month before. When analyzing home price data for the past three months, both New York and Las Vegas experienced falling prices, reporting drops of 2.2% and 1.61%, respectively, Altos said.

Inventory rose in 12 of the major markets tracked by Altos last month, while falling in the remaining 14 composite cities. The biggest inventory jump occurred in Boston, with the city's inventory level rising to 5.8%. Phoenix, on the other hand, experienced the largest inventory level drop, falling 7.93%. Even though the 90-day home price trends rose somewhat, Altos said a weekly sample taken from the month of June still shows a "slight flattening" in home prices. Comparatively, the latest S&P/Case Shiller report said the average price of a single- family home rose for the first time in eight months during the month of April. Altos suspects the S&P/Case-Shiller will be reporting a few positive trends through September. At the same time when looking forward, Altos foresees a slowing or plateau of home prices in the fourth quarter.

MBA - homeownership may drop further

The drop in the homeownership rate from an all-time high of 69.2% in 2004 to 66.4% in the first quarter of 2011 reflects a decline from unsustainable levels to something closer to historicalaverages, according to a study released today by Mortgage Banker's Association's (MBA) Research Institute for Housing America (RIHA). While the homeownership rate may have bottomed out, it could fall another one or two percentage points because of tightened credit and other factors, the paper says. Titled "Homeownership Boom and Bust 2000 to 2009: Where Will the Homeownership Rate Go from Here?," the study was conducted by professors Stuart Gabriel of UCLA's Anderson School and Stuart Rosenthal of Syracuse University. They found that the increase in the homeownership rate in the middle of the last decade extended to all age groups but was most pronounced among individuals under age 30. These increases coincided with looser credit conditions that enhanced household access to mortgage credit, along with less risk-averse attitudes toward investment in homeownership. Following the crash, these trends have reversed and homeownership rates have largely reverted to the levels of 2000.

"How much more might the homeownership rate fall? The answer depends on uncertain forecasts of attitudes towards homeownership and changes in the credit market and economic conditions," concluded Rosenthal. "If underwriting conditions and attitudes about investing in homeownership settle back to year-2000 patterns and, if the socioeconomic and demographic traits of the population look similar to those of 2000, then the homeownership rate may have bottomed out and will not decline further. If, instead, household employment, earnings and other socioeconomic characteristics over the next few years remain similar to those in 2009, then homeownership rates could fall by up to another 1 to 2%age points beyond 2011. Those declines are likely to be greatest in cities and regions in which house prices were most volatile in the last decade."

Wells Fargo modification outnumber Obama's 5 to 1

Wells Fargo completed or started trials on roughly 585,000 mortgage modifications through its private programs since the beginning of 2009, more than five times the 101,000 initiated through the Home Affordable Modification Program (HAMP). HAMP launched in March 2009 but almost immediately drew criticism. Treasury officials admit the more than 3 million modifications initially promised was over estimated. Through May, servicers started roughly 731,000 permanent loan modifications and have been averaging between 25,000 and 30,000 per month this year. According to a recent poll of housing counselors, only 9% of borrowers who entered the program described it as a "positive" experience. Homeowners continually blame servicers for mishandling documentation. Overwhelmed servicers point out many borrowers are simply out of reach. "Avoiding foreclosure is a top priority for us and when customers work with us, we can help seven of every 10 to stay out of foreclosure," said Teri Schrettenbrunner, senior vice president, Wells Fargo Home Mortgage.

The Treasury points out most of the private programs built since the foreclosure crisis use HAMP as a model. But since mishandled foreclosure and modification processes came to light late last year, new standards were put in place, including a single point of contact that servicers are required to provide throughout the loss-mitigation process. The Treasury began to clamp down on poorly performing servicers — at least to the extent their contracts with these firms allow. In June, the Treasury announced it was withholding HAMP payments from Bank of America, JPMorgan Chase and Wells. Schrettenbrunner said the bank continues to build on its primary contact model it established last summer, and the bank has met with 58,000 borrowers at 31 home preservation workshops. Half of those received a decision on the spot or shortly after the event. Schrettenbrunner said the department continues to "aggressively reach out" to borrowers behind on payments to bridge the communication gap as quickly as possible. "We also continue to aggressively reach out to customers 60 or more days behind on their home loans via mail and telephone in an effort to engage them," Schrettenbrunner said.

Home prices up

According to the S&P/Case Shiller 20-city index, prices rose 0.7% in April compared with March, although they fell 0.1% when adjusted for the strong spring selling season. Prices were down 4% year-over-year. "In a welcome shift from recent months, this month is better than last -- April's numbers beat March," said David Blitzer, S&P's spokesman, in a statement. "However, the seasonally adjusted numbers show that much of the improvement reflects the beginning of the spring-summer home buying season. It is much too early to tell if this is a turning point or simply due to some warmer weather," Blitzer added. Any hint of good news in the troubled housing market will likely bring cheer to the industry, and there are some signs that market conditions are not quite as dire as some of the statistics may indicate.

Much of the price drop over the past year can be blamed on severe price slashing for homes in foreclosure, as Federal Reserve chairman Ben Bernanke pointed out in a press conference last Wednesday. Prices for homes sold by regular sellers have held up much better. Metropolitan Washington continued to be the strongest of the 20 cities covered by the report. Prices rose 3% in April there and have been on the plus side year-over-year, up 4%. The worst performing market for the month was Detroit, where prices fell 2.9%. The biggest year-over-year drop was recorded by Minneapolis, where prices have plunged 11.1% since last April.

WSJ - mortgage rates flat

Mortgage rates changed little for a second straight week, according to the latest survey from Freddie Mac. Mortgage rates generally track Treasury yields, which move inversely to Treasury prices. Rates have slumped for months as yields on Treasury’s slid amid economic uncertainty. Freddie Mac Chief Economist Frank Nothaft pointed to more signs of a softening US housing market, including the Federal Reserve's policy-committee statement on Wednesday, which acknowledged continued weakness in the sector. "Although new construction on single-family homes ticked up in May from April, it was still below the overall pace set in 2010," Mr. Nothaft said. "Moreover, existing home sales fell 3.8% in May to the fewest since November 2010."

The 30-year fixed-rate mortgage was at 4.5% in the week ended Thursday, the same rate as in the previous week, though the rate was below last year's 4.69% average. The 30-year rate has fallen steadily since reaching the 2011 high of 5.05% in early February. Rates on 15-year fixed-rate mortgages edged up to 3.69% from 3.67% the previous week but were down from 3.13% a year earlier. Five-year Treasury-indexed hybrid adjustable-rate mortgages decreased to 3.25%, down from 3.27% last week and 3.84% a year earlier. One-year Treasury-indexed ARM rates ticked up to 2.99% from 2.97% the prior week, but still well below the prior year's 3.77% rate. To obtain the rates, 30-year and 15-year fixed-rate borrowers required an average payment of 0.8 point and 0.7 point, respectively. Five-year hybrid adjustable rate mortgages required a 0.6-point payment, while one-year adjustable-rate mortgages required a 0.5-point payment. A point is 1% of the mortgage amount, charged as prepaid interest.

don't let the numbers fool you

"Let me preface with an apology for the huge supply of numbers in this post, but if you can make it through them all, I think you will get the picture I'm drawing here. The so-called 'shadow inventory' of residential properties is falling, according to a new report from CoreLogic. This is the number of homes with seriously delinquent loans (90+ days), loans in the foreclosure process and bank-owned homes which are not yet listed for sale. The supply as of April 2011 declined to 1.7 million units, representing a five months' supply. This is down from 1.9 million units, also a five months' supply, from a year ago. 'The decline was due to fewer new delinquencies and the high level of distressed sales, which helped reduce the number of outstanding distressed loans,' according to the report.

Good news, no? Wait. There's more: 'In addition to the current shadow inventory, there are 2 million current negative equity loans that are more than 50% or $150,000 'upside down.' These current but underwater loans have increased risk of entering the shadow inventory if the owners' ability to pay is impaired while significantly underwater.' And then there's this other report from Lender Processing Services (LPS), which also reports a drop in newly delinquent loans, but gives the actual, mind-numbing numbers of loans in trouble:

- Number of properties that are 30+ days past due, but not in foreclosure: (A) 4,187,000

- Number of properties that are 90+ days delinquent, but not in foreclosure: 1,921,000

- Number of properties in foreclosure pre-sale inventory: (B) 2,164,000

- Number of properties that are 30+ days delinquent or in foreclosure: (A+B) 6,350,000

There are more than six million properties in distress, a third of those in foreclosure. According to yesterday's monthly home sales report from the National Association of Realtors, less than five million homes will sell this year, at the current sales pace. There are currently 3.72 million existing homes for sale, representing a 9.3 months supply; that does not include newly built homes nor does it include that six million number. This vast supply varies from state to state of course, but the overall effect is downward pressure on home prices nationally. I was interested to see a survey released today by Robert Shiller's MacroMarkets group (of the Case Shiller Home Price Indices). Every month he asks a group of 108 economists, real estate experts and investment strategists for their home price predictions. June's survey found the group's overall expectations have reached the lowest level since the survey started over a year ago, but, 'It is apparent that a significant majority of our panelists believe that the bottom for home prices arrived in the first quarter or will arrive sometime before year-end,' writes Shiller.

But wait, there's more: The group of 69 panelists who are currently forecasting a 2011 turning point predict less than two% average annual growth in nominal home prices over the five-year
period ending December 2015. Shiller added, 'If it were to materialize, such a scenario might be better described as a forecast of price stability rather than a rebound. A 2%-a-year home price increase will not inspire a lot of consumer confidence. Given prevailing inflation expectations, this
forecast implies virtually no change in real home values going forward.' So I'm faced with a national picture of over 6 million homes with distressed loans, a 9 month supply of existing homes, a smattering of new construction and no home price growth for at least the next four years. Should I buy?"

Lenders make short sales even more attractive

CitiMortgage, the mortgage servicing arm of Citigroup is paying borrowers an average $12,000 after completing a short sale this year. Justin Rand, the senior vice president of loss mitigation at the bank, said servicers are putting more of an emphasis on streamlining the process and pursuing a short sale ahead of foreclosure. The short sale process in 2009 took an average 120 days from listing to close. But by reaching out to borrowers instead of waiting for them to ask the bank, short sales now take an average 83 days to complete, Rand said at a panel for the REO Expo Conference in Fort Worth, Texas, earlier this week. "For Citi-held portfolio loans today, we have a little over 16% of delinquent loans in a short sale program," Rand said, adding that increased from roughly 4% two years ago.

Not only are the timelines shrinking to complete these deals, but the incentives paid to qualifying borrowers – again only on loans owned by Citi – increased in recent years as well. In early 2009, Citi offered an average $1,500 to qualifying borrowers. That went up to between $3,000 and $5,000 in 2010 and finally up to an average $12,000 so far in 2011, Rand said. "Incentives will be offered to customers experiencing financial hardship who need funds to proceed with the short sale," a Citi spokesman said. "The amount, which is agreed upon up front, varies according to the borrower's individual circumstances and loan characteristics. It is disbursed to the homeowner when the sale is completed."

The key to a successful short sale, just like modifications, is the timely collection of financial documents. Regulators helped move the process along with guideline changes to programs like the Home Affordable Foreclosure Alternatives initiative, which lessened the amount of documents required. "It took us about 30 days to collect documentation in 2009 to now less than 10 days," Rand said. "A lot of the time, for seriously delinquent loans, all we need is just a letter of authorization from the homeowner." David Sunlin, the operations executive for short sales at Bank of America (BOA) was on the same panel as Rand. He said the entire industry is becoming more proactive. BOA completed more short sales than REO every month for the last year and a half. The short sale department at BOA grew from 150 people to now over 3,000. Each employee handles roughly 75 cases. "We're past the point where we're bumbling around losing files," Sunlin said.

Rand said the big shift began in 2009 as the Treasury Department was putting together plans for the HAFA, which would launch in April 2010. "In 2009, we started a proactive approach, reaching through MLS services and reaching out to real estate agents and customers with underwater mortgages, distressed loans," Rand said. "We're not going to turn anybody away if the short sale meets the net requirement we're looking for."

hard to make a call on housing

[Friday's] report on consumer confidence, or the striking lack of it, is yet another sign that housing is going to be in a very sticky state for a while. It's hard to say whether housing is weighing on confidence or lack of confidence is weighing on housing; the answer lies somewhere in the middle. Next week is a big week for housing because we get the all-important readings on existing and new home sales for May. The pending home sales index, based on contracts signed, not closings, fell dramatically in April, and that has the housing prognosticators building another arc for the flood of bad news yet to come. Home builder sentiment fell in June, largely based on competition from distressed properties and high material costs, but you can bet the builders know we're in for some tough sales numbers in their market as well.

I know I've said this before, but here I go again: All real estate is local, but confidence is national. Potential summer buyers, who are historically few and far between, will be watching the national numbers, as they try to time the bottom of the market, which is of course impossible to do. You can't time the bottom of this market, because it will likely bounce along the bottom for several years. You also have no historical perspective because we've never seen a crash like this ever before. The two greatest factors that will keep us bouncing are the huge volume of distressed properties and uncertainty over the direction of new regulation in the mortgage market.

Regulators pushed back the deadline for a huge decision on risk retention for the mortgage market, and that has talk abounding that the entire proposal is going back to the drawing board. This is the proposal that would require, among many other things, a 20% down payment on loans for them to be exempt from risk retention. Without that, banks would have to hold 5% risk on their books when securitizing the loan.

All this uncertainty in the mortgage market, piled on top of all kinds of new regulations now going into action, just makes lending more expensive for the banks and borrowing more expensive for consumers. It's no surprise that confidence in housing is so low, despite the fact that now may in fact be one of the best times to get into the housing market. You just have to have a long view, which foreign buyers apparently have but Americans sorely lack.

NAR - GSE's should maintain public involvement

According to the National Association of Realtors’ recommendations for restructuring the government-sponsored enterprises (GSEs), continued government participation in the secondary mortgage market is essential to ensuring affordable and available home mortgages to qualified consumers when private lenders withdraw from the market. NAR’s recommended plan is to restructure the entities as government-chartered, non-shareholder owned authorities that protect taxpayers and ensure continued access to affordable mortgages for consumers who are willing and able to assume the responsibilities of the American Dream of home ownership. NAR believes the previous structure of Fannie Mae and Freddie Mac with private profits and taxpayer loss must never recur; however, without some level of government backing of the most basic, simple mortgages – such as the 30-year fixed rate product – interest rates and mortgage fees will be notably higher for consumers and could severely restric
t access to credit, especially during down or disruptive markets. The recent economic downturn, for example, caused private capital to flee the marketplace; government backing of residential mortgages was critical in providing capital to borrowers and without their support the financial crisis could have been far worse.

NAR encourages private market solutions and innovations such as covered bonds for less traditional mortgages. However, a full privatization across all mortgage products will inevitably put taxpayers at risk. Given the very high concentration in the banking industry, the market will be vulnerable to tacit collusion and too-big-to-fail mistakes. The restructured GSEs under NAR’s plan would guarantee or ensure a wide range of safe, reliable mortgage products such as 15- and 30-year fixed rate loans. Sound and sensible loan underwriting standards would need to be established. NAR’s plan would require the entities to be fully self-financing and subject to tight regulations on product, revenue generation and usage in a way that ensures they can accomplish their mission and protect taxpayer dollars.

Pace of Orlando home sales remains strong in June

(July 12, 2010 – Orlando, FL) Strong homebuyer demand continued in June, elevating the level of home sales and increasing the area’s month-over-month median sales price for the sixth consecutive month. Members of the Orlando Regional REALTOR® Association reported completed sales on 2,834 homes in June, which is a 27.66 percent increase over the June 2009 mark of 2,220.


The number of new contracts filed in June 2010 (3,736) represents an increase of 1.36 percent more than were filed in June 2009 (3,686). The area’s pending sales statistic — also an indicator of future sales activity – is likewise remaining at a record high with 33.13 percent more homes (9,625) under contract and awaiting closing in June of this year than in June of last year (7,230).


And finally, the median price of all existing homes combined sold in June 2010 increased 0.87 percent to $116,000 from the $115,000 recorded in May 2010. June 2010’s median price is, however, a decrease of 11.57 percent compared to June 2009’s median of $131,175.


“Sales in June got a boost from the homebuyer tax credit, as buyers raced to close by the original deadline. The extended deadline of September 30, 2010 for closing tax credit eligible transactions will continue to increase sales in the next few months,” explains ORRA Chairman of the Board Kathleen Gallagher McIver, RE/MAX Town & Country Realty. “Even with the expiration of the homebuyer tax credit, buying conditions remain favorable. Affordability, historically low interest rates, and a great selection of homes make this an excellent time to buy a home in Orlando.”


June’s $116,000 median price encompasses all types of sales situations and home types. The median price for “normal” sales is $175,000 (up 9.38 percent from last month’s $160,000). The median price for bank-owned sales is $77,500 (down 4.32 percent from last month’s $81,000), and the median price for short sales is $115,526 (up 4.78 percent from last month’s $110,000).


Of the 2,834 sales in June, 911 “normal” sales accounted for 32.15 percent of all sales, while 1,211 bank-owned and 712 short sales made up 67.85 percent.


The Orlando affordability index decreased to 226.29 percent in June. (An affordability index of 99 percent means that buyers earning the state-reported median income are 1 percent short of the income necessary to purchase a median-priced home. Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.) Buyers who earn the reported median income of $53,105 can qualify to purchase one of 12,178 homes in Orange and Seminole counties currently listed in the local multiple listing service for $262,496 or less.


First-time homebuyer affordability in June decreased to 160.92 percent. First-time buyers who earn the reported median income of $36,111 can qualify to purchase one of 8,204 homes in Orange and Seminole counties currently listed in the local multiple listing service for $158,664 or less.


Homes of all types spent an average of 85 days on the market before coming under contract in June 2010, and the average home sold for 95.33 percent of its listing price. In June 2009 those numbers were 104 and 93.83 percent, respectively. The area’s average interest rate decreased in June to 4.84 percent.


Inventory


There are currently 16,304 homes available for purchase through the MLS. Inventory increased by 341 homes from May 2010, which means that 341 more homes entered the market than left the market. The June 2010 inventory level is 8.56 percent lower than it was in June 2009 (17,831). The current pace of sales translates into 5.75 months of supply; June 2009 recorded 8.03 months of supply.


There are 12,353 single-family homes currently listed in the MLS, a number that is 509 (3.96 percent) less than in June of last year. Condos currently make up 2,568 offerings in the MLS, while duplexes/town homes/villas make up the remaining 1,383.


Condos and Town Homes/Duplexes/Villas


The sales of condos in the Orlando area increased by 48.54 percent in June when compared to June of 2009 and decreased by 4.99 percent compared to May of this year. To date, condo sales are up 85.20 percent (3,328 condos sold to date in 2010, compared to 1,797 by this time in 2009).


The most (326) condos in a single price category that changed hands in June were yet again in the $1 - $50,000 price range, which accounted for 53.53 percent of all condo sales.


Orlando homebuyers purchased 291 duplexes, town homes, and villas in June 2010, which is a 59.02 percent increase from June 2009 when 183 of these alternative housing types were purchased. Fifty duplexes, town homes, and villas sold in June 2010 fell into the $100,000 - $120,000 price categories.