Orlando Distressed Sales Still High, Cash Sales Rule In Elsewhere In Florida

RealtyTrac’s June and Midyear 2015 U.S. Home Sales Report finds June’s distressed sales, cash sales and institutional investor sales down year-to-year and at multi-year lows.

At the same time, sales to owner-occupant buyers using FHA loans increased year-to-year, hitting a two-year high in the second quarter.

Buyers using Federal Housing Administration (FHA) loans accounted for 23 percent of all single-family home and condo sales with financing – excluding cash sales – in the second quarter of 2015, up from 20 percent in the first quarter and up from 19 percent in the second quarter of 2014. It’s FHA’s highest share since the first quarter of 2013.

“As the investor-driven housing recovery faded in the first half of 2015, first-time homebuyers, boomerang buyers and other traditional owner-occupant buyers started to step into the gap and pick up the slack,” says Daren Blomquist, vice president at RealtyTrac. Blomquist calls the changes “good news for sellers in many markets, providing them with strong demand from a larger pool of buyers. …In June sellers sold for above estimated market value on average for the first time in nearly two years.”

Cash sales
All-cash buyers accounted for 22.9 percent of all single-family home and condo sales in June, down from 24.7 percent month-to month and 29.1 percent year-to-year. It’s the lowest level of cash buying since August 2008 and almost half the peak of 42.1 percent in February 2011.

However, Florida metros continued to lead the nation in the number of cash sales, with only New York City also making the top five list.

Metros with highest share of cash sales in June were Homosassa Springs, Florida (53 percent), Naples-Marco Island, Florida (52 percent); Miami (50 percent); Sebastian-Vero Beach, Florida (50 percent); and New York (49 percent).

“The first six months of sales in South Florida have been at a record pace,” says Mike Pappas, CEO and president of Keyes Company in South Florida. “The millennials are entering the market along with many homebuyers who had difficulty during the last recession.”

Institutional investors
The percent of investors that purchase at least 10 properties during a calendar year was 1.7 percent of all single family and condo sales in June – the same share as May but down from 3.5 percent year-to-year. It’s the lowest share of institutional investors since January 2000 – the earliest data is available – and less than one-third of the 6.1 percent in February 2013.

Distressed sales
Properties in the foreclosure process or bank-owned when sold accounted for 8.0 percent of all single family and condo sales in June, down from 10.6 percent of all sales month-to-month and down 19.0 percent year-to-year – the lowest monthly share since January 2011, the earliest with available data. The share of distressed sales reached a monthly peak of 45.9 percent of all single family and condo sales in February 2011.

Major metro areas with a high share of distressed sales in June included Chicago (14.7 percent); Baltimore (14.4 percent); Orlando (13.8 percent); Jacksonville, Florida (13.6 percent); and Memphis (13.4 percent).

© 2015 Florida Realtors®