A major spike in home prices during December was enough to push overall property values in Orlando into positive territory for 2011, says the Orlando Regional Realtor Association.
The median home price in Orlando spiked 12.38 percent in December 2011 on a year-over-year basis. According to ORRA, this was enough to cumulatively edge home prices 1.2 percent higher in 2011 when compared to 2010.
Meanwhile, property data in the report showed that the median price of a home at the end of the year was $109,900, while prices only reached $108,500 by the end of 2010.
"I am pleased to see a year-end sales tally that is very similar to 2010, which offered the homebuyer tax credit incentives to stimulate sales," said ORRA chairman Stephen Baker. "Buyers are taking note of Orlando's historic affordability conditions, consistent increases in prices, and dramatically declining inventory and taking action."
However, despite the increase in home prices, ORRA indicated that there were 13.8 percent less home sales in Orlando during December when compared to a year earlier. According to the report, there were 2,125 transactions during the month, while there were 2,467 completed in December 2010.
Meanwhile, yearly home sales in the local market were down by the end of 2011, accounting for 27,703 sales. There were 28,701 in 2010 - marking a 3.4 percent decrease.
The report noted that the increase in home prices coupled with less home sales could be a direct indicator of higher demand for property in the Orlando housing market, while the inventory continues to shrink.
Baker also stated that stricter lending standards, leading to a higher rate of contract failures, may have played a major role in the decrease in Orlando homes sales.
"In addition, I expect to see even more sales activity once the problem of contract failures - estimated by the National Association of Realtors to be as much as 33 percent nationwide - is resolved by an easing of unnecessarily restrictive lending standards."
While distressed home sales account for a major portion of overall sales throughout the year, the report indicated that foreclosed houses made up a smaller percentage of transactions during December - falling by 56.2 percent. In addition, short and nominal sales both fell by 24.4 and 14.1 percent, respectively.