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Central Florida's Existing Home Sales Up In May, But New Contracts Down

The federal tax credit for homebuyers helped push up home resales last month in the Orlando area, though a new report hints at the uncertainty of life after that government tax incentive.

Existing-home sales were up more than one-third in May from a month earlier, while prices edged up by a few hundred dollars, according to the report released Friday by the Orlando Regional Realtor Association.

The median price for the Orlando Realtors' core market, mainly Orange and Seminole counties, was $115,380, though "normal" sales — excluding distress sales — hit a midpoint price of $160,000.

Distress sales continued to define the market, though not as much as they had in previous months. In May, 64 percent of the closings involved either foreclosed properties or short sales, compared with 75 percent of all monthly sales earlier this year.

Also, the bargains among foreclosures appeared to be diminishing, as prices for bank-owned properties jumped 12 percent from April to May. In comparison, conventional sales prices rose less than 1 percent from the prior month.

Prices overall remained down in May from a year earlier, but the 11 percent difference was not nearly as severe as the 31 percent year-vs.-year price gap at the start of 2010.

Local real estate agents lauded the tax credit for helping heal one of the hardest-hit foreclosure markets in the country — Orlando ranked 12th among U.S. metro areas in a RealtyTrac report released earlier week. But those agents also have begun to lower expectations about market conditions in upcoming months, since the deadline to have a qualifying sales contract for the credit was April 30.

"The upswing in May housing sales was expected because of the tax credit," explained Orlando Realtor Chairman Kathleen Gallagher McIver, of Re/Max Town & Country Realty. "No doubt there will be some fallback in new contracts in the months to come due to its expiration, but other factors are also affecting the market."

Home-purchase contracts signed in May, the month following the tax-credit deadline, were down 30 percent compared with April. So while the number of completed sales in May was 38 percent higher than a year ago, the number of pending sales initiated last month was just 6 percent higher.

Two things could help buoy prices in the post-credit market: interest rates and the number of homes hitting the market. Fixed rates for 30-year mortgages fell from an average 5.12 percent in April to 4.89 percent in May, while the number of new listings in the core Orlando market dropped about 15 percent, from 5,116 in April to 4,304 in May.

Resales were up from last year throughout the region: Lake County, 30 percent; Orange, 44 percent; Osceola, 26 percent; and Polk, 42 percent.