When you have to look back more than two years to see inventory numbers this small, you might think the worst is over. This is exactly what Orlando experienced last month as local REALTORS sold 48 percent more houses and condominiums than they did in 2008.

As prices drop, federal incentive programs increase and mortgage rate continue to decline, we are going to see more sales. Whether they are owner occupies or investors looking for incredible deals, the fact is the houses are moving. March sales of single family homes and condominiums in the Orlando Metro market rose to 1,653 in March 2009 compared to only 1,120 a year ago, driven by a median price spiral of nearly 38 percent from $137,000 last month compared to $220,000 in March 2008.

In an unprecedented move, the Orlando Regional Realtor Association (ORRA) reviewed “distress sales” in minute detail and found that 49 percent of the homes sold by members of the ORRA last month were either bank owned or had been sold under financial pressure of some degree.

The report of these finding also revealed a wide disparity in market prices because of the large number of foreclosed properties:

• REO homes – those already through foreclosure – sold for a median price of $95,000.
• Homes for which lenders had agreed to take less than the amount owed on the mortgage – known as pre-foreclosure or “short” sales – sold for a median of $143,500.
• Homes marketed by owners not under financial duress sold for a median of $174,995.

Even with the median sale price of $137,000 the lowest since January 2003, it is still amazing that the sales increased like they did. The reason is financing. With owner occupied situations, even though the mortgage rates are extremely low, it is challenging if not impossible to qualify for a loan with so many foreclosures in the market. This leads me to believe that many of these home sales might be all cash transactions by investors looking for great deals in a depressed market. I guess we will just have to wait and see how it plays out.

For more information on Orlando foreclosures, click here.