Orlando Real Estate

I posted in my Orlando real estate blog earlier this month about an article regarding house sizes. It was prompted by an article I read on Yahoo quoting a survey conducted by Trulia. The folks at Trulia liked that I liked it on my Facebook page. One of the questions that I had about the numbers is what effect investors have on mix of smaller vs larger homes. I expected they would be buying up smaller homes, because they could probably get a better return on their investment. I think my reasoning was pretty sound from the information I found when I pulled out the investors. By the way, I define investors by looking at cash deals. I recognize that is not perfect, but expect it is probably a pretty good proxy.

Sq Ft	Active	Mkt Share	All Sold 6mo 2010	Mkt Share	No Investors Sold 6mo 2010	Mkt Share
<1000	1505	9.0%	1954	12.7%	188	2.4%
1001-1500	4599	27.5%	5250	34.2%	1946	25.2%
1501-2000	4479	26.8%	3897	25.4%	2528	32.7%
2001-2500	2399	14.4%	1952	12.7%	1379	17.9%
2501-3000	1468	8.8%	1133	7.4%	858	11.1%
3001-3500	797	4.8%	578	3.8%	422	5.5%
>3500	1466	8.8%	593	3.9%	404	5.2%
Total	16713		15357		7725

I added the last two columns to the table above to show the purchases of homes by "non-investors" for the first six months of this year. The first thing you notice is the investors accounted for the vast majority of the smallest two size categories. Many of these account for condo sales in our market. In the original article a survey by Trulia found only 9% of people wanted a home over 3,200 square feet while a third were looking for a home under 2,000. Our market sales seem to illustrate a similar trend. The inventory of those larger homes about 13.6% of the total inventory, which is about 2.75 times what it should be. Way over a third are buying homes under 2,000 square feet though. Here in Orlando it is over 60% of the number of sales transactions. I don't know if the McMansion is dead, but it appears overstocked right now. Without the investor purchases all the size categories are overstocked.

David Welch Real Estate Optimist, Orlando Real Estate