ORLANDO, FL - Condominiums and town homes have traded places with single-family houses as the leading type of new home sold in the Orlando area. As housing prices soared out of reach for many buyers in recent years, sales of less expensive "attached housing," condos, apartment-to-condo conversions and town homes, were grabbing huge chunks of market share. A new survey shows that last year, multifamily units accounted for almost two-thirds of all new production housing sold in Orange, Seminole and Osceola counties.
That 66 percent share was up from 61 percent in 2006 and 44 percent the year before that, according to Charles Wayne Consulting Inc., the Maitland company that conducted the survey. As recently as 2001 and 2002, multifamily units had accounted for less than 10 percent of new-home sales. Meanwhile, single-family production homes' share of the market (the survey doesn't include custom homes) fell from 91 percent of all sales in 2001 to 34 percent last year.
Although the percentage of sales increased for condos, the raw number of units sold fell by more than 4,000 between 2006 and 2007."The shrinking market share of single-family product is strictly a function of price," Jim Lewis, president of Charles Wayne Consulting, said Thursday. At the end of 2007, he said, single-family production homes in the Orlando area were avera- ging $349,000, so condos and town houses selling for $150,000 to $200,000 on average were able to undercut the competition.
A condo-conversion craze that peaked locally in 2005 contributed to the sales switcheroo in 2006 and 2007, said Dan Fasulo, director of market analysis for Real Capital Analytics in New York. "It makes sense," Fasulo said. "The conversion of apartments to condos was driven by a need for affordable housing. It just got to the point that there was a dearth of affordable, entry-level, single-family housing below $300,000."
More than 13,000 multifamily units were sold last year in the three-county area, pushing the total number of new housing units purchased to 20,256. That was the third-best year for new-home sales in the region's history, trailing only 2006 and 2005, Charles Wayne Consulting noted.
The 13,423 condos, conversions and town homes that were closed on in 2007 were second only to the 17,859 sold in 2006. But the 6,833 new single-family homes sold in the three counties were the fewest since the 1990s. The total was also down by nearly half from 2006 and more than half from 2005.
According to Lewis, a focus on the collapse of single-family new-home sales has masked the relative overall strength of the local housing market, with sales of condominium units and lower-priced town homes taking up much of the slack.
Source: Orlando Sentinel