Celebration Blog

(3,707 single-family permits in 2009, 19th largest market in the country)

Tax credit pushes traffic above agents’ expectations. Buyer traffic came in aboveagents’ expectations in April, as our traffic index increased to 60 from 50 in March,pointing to traffic exceeding agents’ expectations (readings greater than 50 suggest better than expected traffic). In our April survey, agents continued to stress the importance of thetax credit to the region’s overall demand. Comments suggested that April demand saw an additional bump from the credit because of its expiration at the end of the month, with last minute buyers rushing into the market before they lose out on the incentive. One agent noted, “The main driver of our higher than expected traffic is buyers wanting to take advantage of the tax credit.” In addition, agents mentioned that buyers were most interested in foreclosure and short sale inventory, as they continued to look for deals.

Some agents also highlighted buyers’ sentiment of a market bottom and an improving economy for the better traffic in April. However, we are cautious on demand following the credit’s expiration, given its central role in improving traffic, as a potential pull forward will result in a lull in demand in May and June.

Prices remain under pressure, inventory trends improve. Home prices fell again inApril, but started to move toward stabilization, as our home price index came in at 40 (from35 in March), with readings short of 50 indicating sequentially lower prices. Prices havestruggled to gain traction throughout the downturn. Meanwhile, inventory trends werebetter in April, as our home listings index came in at 56 (from 57 in March), staying abovea neutral reading of 50 (readings greater than 50 suggest lower inventory levels). Our timeto sell index also improved, coming in at 60 from 59 in March, suggesting a reduced timeto sell (readings above 50 indicate a reduced time to sell). We view the better inventorytrends, and less time to sell as positive indicators for future pricing, but remainedconcerned over the potential level of shadow foreclosure inventory held by banks.

Comments from real estate agents:

¦ “Most of the activity we get is for REO and short sale listings.”

¦ “The looming tax credit deadline got people off the fence and into the market.”

Ryland and KB Home have the greatest exposure. Ryland and KB Home have the

largest percent of sales from Orlando at approximately 5% each.

Exhibit 18: Buyers Continue the Search for REOs and Short Sales; Tax Credit Provides Boost to Traffic

Traffic Levels Versus Expectations

32%

44%

24%

More than expected Meets expectations Less than expected

How Do the Recent 30 Days Compare to the Prior

30 Days...

8%

25%

20%

64% 67%

40%

28%

8%

40%

0%

10%

20%

30%

40%

50%

60%

70%

Home Prices Incentives Time to Sell Increased Remained the same Decreased

Posted by Karyn Smith on May 6th, 2010 11:39 AMPost a Comment (0)
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Karyn Smith Realtor GRI ABR Broker Associate 321 939 7671

Karyn@SearchFloridaHome.com

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