Thu, 20 Apr 06
One in ten of Central Florida's 20,000 short term rental homes are currently listed for sale, reports one of the area's leading holiday home specialists, Hightower Realty.
According to Hightower Realty more than 2000 of the Disney area’s short term rental homes are now listed for sale. Prices are still weakening and for every home that finds a buyer, four more are added to inventory.
Only 500 re-sales on vacation home communities have closed since the beginning of the year, and quite a few of these have been homes that have been bought as permanent residences, taking them out of the rental homes stock. This take-up of a proportion of older rental homes by the residential market has been an important factor in avoiding an even more dramatic collapse.
Newer communities worst hit
Newer communities are the worst affected, particularly those that were identified by speculators as a good short term investment. One of the most recent developments, Solana, has 52 out of 237 homes listed for sale on the Multiple Listing System, and this number excludes several 'for sale by owner' homes.
Older, mixed-use communities are doing much better. Indian Point, now becoming a popular area for permanent residences, shows only 35 of its 504 homes listed for sale on the MLS.
Hightower say that Central Florida's rental home market has been a roller coaster ride over the last year. Last spring there was a rush to buy as prices soared and new home releases were snapped up in hours. But since then, it has been downhill all the way as many owners have looked to take a profit and run.
But Hightower say that their most recent numbers seem to hint at the first signs of a recovery in the market. Although there is still no let-up in the number of homes being listed for sale, there seem to be a few more buyers around. This is hardly surprising, with some homes being offered at bargain prices, 10% or more below what they would have been expected to fetch a year ago.
However, Hightower Realty's latest market report warns that even if this slight improvement is confirmed, it will be a long time before anything approaching balance is restored to the market. Average sales prices are going to continue to fall for at least a couple of months, probably longer. Then they expect to see a prolonged flat period while the excess inventory is gradually absorbed. We are unlikely to get any significant recovery in prices until the end of the year at the earliest, more likely well into 2007.
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