“Come for the winter, stay for the summer” is a common refrain that you’ll hear from the locals. Well, summer is nearing its end and winter is fast upon us. This coming ski season Winter Park Resort will open a week early and stay open a week later. Two extra weeks of skiing and two extra weeks of potential rental income for those of you who have your properties on a rental program.
We just wrapped up our mid-year charts and graphs and what stands out on the graphs for Winter Park Area residential property (single-family homes, townhomes and duplex) is the dramatic increase in the number of sold properties and the total sold volume. Both have far surpassed the highs of 2008 (64% and 26% respectively). However, the average sales price is still lagging 2008 by 19.5% which bodes well for those buyers trying to purchase a property before the end of the year. It goes to follow that in a recovering market our average sales prices will (at some point) start to increase. A 5% increase in the next year would push the average sales price from $495,587 to $520,366. This may not be a huge difference until you combine that with higher interest rates. Falling unemployment and rising interest rates suggest that the Fed may be nearing the end of their bond buying program as early as the end of the first quarter next year. A 5% increase in the average price plus a 1% increase in interest rates would equate to approximately a $350 increase in monthly mortgage payments.
The condominium market in the Winter Park Area is also seeing a slow but steady turn around. The total number of sold properties and the total sold volume have been steadily improving since the lows of 2009 but similar to the residential market the average sales prices are lagging behind. It is difficult to use 2008 as a comparison year when looking at condo statistics because 2008 is when the bulk of Fraser Crossing and Founders Pointe condos closed. But if you compare the average sales price of a condo at the end of the 2nd quarter in 2014 ($205,113) to the same time period of 2009 prices are still down by 27%. The average price of a condo for this time period in 2009 was $281,777 and the average price for the same time period of 2007 was $275,177.
In the 10 years leading up to the recession, the average sales price in the Winter Park real estate market increased an average of 5% per year. It went from an average sales price of $201,010 for residential and $134,741 for condos in 1998 to $502,267 and $366,465 respectively in 2008. Not too bad.
What will the next 10 years bring? I guess we’ll have to wait and see.