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Home Foreclosures in Orlando to Continue Depressing Prices

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By : John Cutts    99 or more times read
Home foreclosures in Orlando are expected to continue depressing home prices sharply, according to market analyst Fiserv Inc.

Because of various negative factors playing in the Orlando market, house prices in the area are expected to plunge further year-over-year by 21 percent through the July-September quarter this year and then start to rise by 1.5 percent over the following four quarters.

Fiserv also predicted that the large inventory of Florida home foreclosures will continue pulling down home prices, with houses in Miami experiencing the steepest price fall. Prospective buyers seeking advice on how to find foreclosed homes can contact sellers in Miami as home prices in the area are expected to decline by 33 percent through the July-September quarter.

On the other hand, Tallahassee prices are expected to hold up and post a drop of only 8 percent year-over-year.

Stan Smith, housing market analyst and finance professor at the University of Central Florida, said that the projected double-digit home price decline in Orlando is not without basis because of the continued rise in unemployment in the metro area.

Fiserv economist Smith pointed to the 12-percent unemployment rate and the still large numbers of home foreclosures in Orlando as the two major reasons for continued fall in prices in the area.

In January this year, the sales price median for previously owned homes fell by a whopping 30 percent year-over-year, according to data collected and analyzed by the Orlando Regional Realtor Association.

The sales price median for existing homes in January was $103,000, a 14.2-percent drop from the $120,000 sales price median for homes sold in December 2009. Compared to the $148,000 sales price median in January 2009, the January 2010 median marked a whopping 30.4-percent spike.

According to Smith, because of the depressed prices and the high foreclosure inventory in Orlando, households earning the $52,820 median income can already afford to buy a house priced more than double the January median of $103,000 for pre-owned homes.

Smith also explained that Orlando lies in the middle of Florida cities in terms of price recovery. While Orlando is expected to start to recover in the final quarter of 2010, Gainesville and Miami will still struggle until 2011. Sarasota, on the other hand, is expected to post the highest increase in price statewide.

Additionally, Smith said that the continued price declines will push up the number of home foreclosures in Orlando as severely underwater homeowners tend to walk away from their mortgages.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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