Pandemic’s Impact on Real Estate July 2020

Pandemic’s Impact on Real Estate July 2020
 
Real estate markets nationwide surge in demand & greater Orlando achieves major milestone for the first time in 13 years.
Based on data reported by Orlando Regional Realtor ® Association, central Florida’s median home value of $265,000 finally surpasses July 2007 peak level of $264,436. Home values now at all-time record highs as average mortgage interest rates inversely plummet to record lows in the 3% range. Lower credit risk loans, such as 15 fixed-mortgages, being reported with interest rates as low as 2.75%.
 
Since the market bottom of January 2011, Central Florida home values are up 179%. 
Inventory of all homes available is down a whopping 18% year-over-year & distressed properties (REO/SS) becoming depleted to less than 3% of all sales. Scarce supply & multiple offer scenarios becoming the norm — the ultimate seller’s market conditions – strong demand, dwindling supply & lowest average mortgage rates on-record.
 
Demand skyrocketing for single-family homes with pools, amenities, yard/acreage, bonus rooms, spare bedrooms, garages, & outbuildings including in-law suites or other convertible home office space.
 
A report by Redfin tracked online home searches & reported a 100% increase in the searches for smaller cities & non-urban areas under 50,000 in population. The national telecommuting revolution is providing workers with more options – freedom, flexibility, & mobility; without any indication work-from-home will be declining in the future. The advent of new paradigm shift in how we conduct business.
 
FHFA & FHA have extended all eviction & foreclosure moratoriums on GSE backed loans (on SFH’s only) through August 31, 2020. All new & existing foreclosure actions suspended, however “legally vacant” properties are excluded. In Florida, all counties have suspended & postponed foreclosure sales.
 
As part of the CARES Act, borrowers with FHA mortgages have a year of delayed mortgage payment forbearance & no balloon payment at conclusion of forbearance period. Deferred payments can be placed into a junior lien payable upon sale, refi or if mortgage is extinguished.
 
The Mortgage Bankers Association is reporting approx. 8% of all loans are currently in forbearance, which computes to 1 out of 12 loans.
 
However, no agencies reporting any forgiveness on deferred loan or rental payments. Rental policies will be mostly determined by state authorities, at least in Florida. Governor DeSantis issued an executive order banning evictions through August 1, 2020. The governor has twice extended the original eviction moratorium from April 1st & a third extension may be announced any moment. Landlords may still issue eviction notices, but court hearings & orders are suspended. The systemic risk, or chain reaction, of landlords’ inability to repay financing is potentially a serious concern for credit markets, but no data currently available on the percentage of residential and/or commercial tenants in default on leases.
 
Commercial real estate is certainly in an extremely vulnerable position from the devastating situation with small businesses, limited capacity/occupancy, mandated closures (gyms/bars), virtual office trend, re-direct to online shopping & overall lack of necessity for office space. It wouldn’t be surprising to see mass re-zoning & re-purposing of redundant commercial space.
 
Residential real estate market & credit data not currently indicating any type of “crash” metrics. Although, overall market performance will ultimately be correlated with macroeconomics, further government stimulus programs, & how long consequences of the Covid-19 depress certain economic sectors – energy, financials, & consumer discretionary – travel, tourism, apparel, gyms, automotive, and restaurants. Any shock to the volume of loan default rates will be a key indicator.
 
Meanwhile, information technology sector is booming with the NASDAQ index approaching 11,000 points, all-time record highs, as well as upward spikes in consumer staple, telecommunication, home improvement, pharmaceutical sectors; also gold commodity. Technology winners have emerged — Facebook, Apple, Amazon, Netflix, Google, Microsoft & Zoom Video Communications.
 
U.S. Q1 GDP, as reported by BEA, down 5% & Q2 results will be released tomorrow, July 30th. Two consecutive quarters with declining GDP will satisfy the definition of a recession.
BLS reporting national unemployment rate of only 11.1% likely with PPP being used as a flotation device from the $3 Trillion CARES Act, combined with the government stimulus payments “lifeline” extended to most Americans in March/April.
 
The Fed will be forced to maintain low interests to prevent total economic meltdown & the prospect of inflation will be an inevitability down the road. The current fed funds target rate is 0-0.25%. Prior to 2020, the Fed had been raising the federal funds rate from 0.25% to 2.5% from 2016-2019.
 
November elections are looming & potential regime changes at the executive & legislative branches could have long-term consequences on policy changes, consumer sentiment, diplomacy & other market-affecting factors. The top questions on everybody’s minds are how long is the global pandemic going to linger & when will a vaccine be available?
 
Jason Crane
Jason Crane Real Estate, LLC
Orlando, Florida
July 28, 2020
 
Sources below:
 
Economies & markets are complex structures of interrelated factors both tangible & intangible & data is a lagging indicator of performance & subject to unpredictable events & unforeseen volatility.

6558 Cherry Grove Cir, Orlando 32809 — Listed for Sale

Short Sale; Subject to 3rd party approval. Lender-initiated Short Sale. Lender/servicer will respond to all offers within 20 calendar days. If applicable, properties owned by GSE’s or subject to MI approval may take longer. Meticulously maintained Lake Gloria Preserve home with spacious interior, tile flooring, ceiling fans & vaulted ceilings. Kitchen includes all appliances. Open layout with utility room. Rear yard is fence with patio & sliding door. Two car garage & parking pad. Home is located within minutes of Orlando International Airport, Florida Mall, Southport Community Park, & 528 Beachline. Sold as-is, where-is. Room dimensions are approximate & should be independently verified. Proof of funds/preapproval letter required with all offers. Buying party is responsible for verifying whether or not property condition will qualify for buyer’s specific loan program. HOA dues are subject to change & special assessments & must be verified by buyer. MLS information deemed reliable, but not guaranteed. Parties are advised to verify. Buyer must view interior of property prior to submitting offer. Seller will not sign offer from a buyer who has not viewed the property. Seller is advising of only 1 mortgage on the property. Roof replaced following Hurricane Irma. The roofer is owed a remaining balance of $5,115 after the insurance deductible that will be paid at closing from sales proceeds & is subject to lender’s approval. Property taxes paid for 2017. HOA dues are behind. Utilities are activated.

  • SFH
  • 3 Bedrooms/2 Bathrooms
  • 1917 sqft.
  • 2 Car Garage
  • Vaulted Ceilings
  • Kitchen Appliances included
  • Central A/C & Ceiling Fans
  • New Roof
  • Fenced Yard with Rear Patio
  • Slab Foundation & Stucco Exterior
  • Broker’s Protected 3% Commission
  • MLS ID: o5736597
  • Short Sale; Subject to Lender’s Approval
  • Short Sale terms & conditions apply
  • Just listed for $244,900

Orlando Regional Realtor® Association reports home values up 2.7% in Aug. 2018

The Orlando Regional Realtor® Association has released its September 2018 Market Pulse Report. Here are the highlights: From August 2017 to August 2018, the median home value for Central Florida is up 2.7% with inventory down 11.6%, during the same time frame. The combined median home value for all homes sold is $231,000 and average days-on-market was only 49 days. There is a 2.3 month’s supply of inventory. Distressed sales (REO & Short Sale) only account for less than 4% of all sales. Real estate values have more than doubled since 2011. The full report is available for you here: ORRA Housing Report for August 2018

2805 Grassmere Lane, Orlando, FL 32808 — For Sale

Short Sale; Subject to 3rd party approval. Lender-initiated Short Sale. Lender/servicer will respond to all offers within 20 calendar days. If applicable, properties owned by GSE’s or subject to MI approval may take longer. Fixer-upper. Attention investors! Handyman special! Spacious, one story Pine Hills home with 2 car garage, inside utility, ceiling fans, Florida room, & front porch. Home is located within minutes of downtown Orlando, College Park, West Oaks Mall, Barnett Park, Central Florida Fairgrounds, & Universal Studios. Major roads in the area include Hwy 50/W Colonial Dr, SR-408, & Hwy 441. Sold as-is, where-is. Room dimensions are approximate & should be independently verified. Proof of funds/pre-approval letter required with all offers. Buying party is responsible for verifying whether or not property condition will qualify for buyer’s specific loan program. HOA dues are subject to change & special assessments & must be verified by buyer. MLS information deemed reliable, but not guaranteed. Parties are advised to verify. Buyer must view interior of property prior to submitting offer. Seller will not sign offer from a buyer who has not viewed the property. Seller is advising of only 1 mortgage on the property.

  • Single Family Home
  • 4 Bedrooms/2 Bathrooms
  • 2 Car Garage
  • Fixer-upper
  • 2000 sqft.
  • Built 1961
  • Front Porch
  • Ceiling Fans
  • Inside Utility
  • Florida Room
  • Broker’s Protected, 3% Buyer’s Agent Commission
  • Short Sale; Subject to 3rd Party Approval
  • Just listed for only $89,900

Jason Crane Real Estate, LLC is a licensed real estate broker in Orlando, Florida. Jason Crane is a top-performing, top-ranked real estate expert in Central Florida with over 700 real estate closings and cumulative sales volume in excess of $73 million. He has the following certifications: REO, SFR, GKC, HUD & RES.net. Please visit http://www.JasonCraneOnline.com, for photos & more information.