Orlando Foreclosed Home Auctions Growing Due to Job Losses
More properties are getting added to foreclosed home auctions in the Orlando metro area because of growing job losses in the city, based on real estate data in Florida.
In May, sales of existing single-family houses and units from foreclosed home auctions in Orlando increased to 1,949 units, a jump of about 31 percent from the total of 1,489 pre-owned home sales in May last year.
Orlando mirrored statewide sales of existing homes, as 12,044 previously owned units were sold statewide in May, a nearly 16 percent increase from April sales.
Inventories of foreclosed home auctions are set to increase further as manufacturing companies have announced more layoffs. Based on studies by the University of Central Florida, the metro area will lose around 3,600 jobs next year.
The manufacturing sector has already lost almost 10,000 jobs since 1999, when the sector employed nearly 52,000 workers.
In the counties of Seminole, Orange, Osceola and Lake, manufacturing companies are expected to cut down their nearly 40,000 total of jobs to around 36,300 by June next year.
The university researchers also predicted that the business and professional services sector will lose a total of 6,000 jobs by December 2009, lowering the total number of jobs in this sector to 182,800 by December 31 this year.
With these job losses, many households whose breadwinners are in the business services and manufacturing sectors are expected to see their houses get added to foreclosed home auctions. Mortgage lenders refuse to modify the home loans of borrowers who are currently unemployed or who have spotty employment history.
As unemployment rose and foreclosed home auctions grew, home values in the Orlando metro area dropped. In May, the median sales price for existing single-family houses dropped by 34 percent to $142,400, compared to the $215,500 median in May last year.
The drop in the median sales prices for previously owned condo units was even bigger – 60 percent. In May, the median sales price for condos was extremely low at $49,600, compared to the $124,800 median in May last year.
The record low condo price must have been the major purchase factor for a lot of condo buyers because sales of previously owned condos in May increased to 472 units, compared to only 154 in May last year.
Statewide, the median price for previously owned homes in May, including units from foreclosed home auctions, was $144,400, a drop of 29 percent from the $203,800 median in May 2008.
