Orlando home sales fell in October for the first time in more than a year, succumbing to very lean inventories and climbing prices that forced buyers out of the market.
Home sales dropped three percent last month, the first time since August 2014 that the market has posted a year-over-year decline in the number of residential real estate closings, according to a report by the Orlando Regional Realtor Association.
At the same time, the median home price rose 12.5 percent in October compared to October 2014, the highest leap in year-over-year increases since May of 2014. This latest jump marks 51 consecutive months of median price increases.
The median price for all types of homes for October was $180,000, compared with $160,000 the year before.
The number of homes that were available for purchase in October was 11,411, some 8.8 percent less than October 2014. Inventory decreased in number by 122 properties month over month.
Demonstrating demand, homes sold for virtually their entire asking price, or 96.7 percent.
"The interest is still there and that drives up prices," said Ann Thomson, housing economist at Dodge Data & Analytics. "But fewer homes on the market makes sales fall as people pull away."
The inventory of single-family homes was down by 9.6 percent when compared to October of 2014, while condo inventory dropped by 6.61 percent. The inventory of duplexes, town homes and villas declined 4.5 percent.
The writing may have been on the wall. This year, until just recently, it has been the norm to see double digit percentage increases in home sales on a monthly basis, which ate away at inventory.
What happens next for Orlando area home sales is not cut and dried, Thomson said.
The prices that homes are reaching could make people nervous, compelling them to pull back from buying, which means the sales market, while not languishing, could slow, she said.
Indeed, pending sales – those under contract and awaiting closing – were at 5,284 at October's end. The number is 17.2 percent lower than it was in October 2014, which was 6,384, and 1.25 percent lower than it was in September 2015, at 5,351.
Conversely, "people may recognize that prices can't increase at a rapid rate for a huge period of time and decide to cash out," which would provide a boost to inventory, Thomson said. "It will take a few more months to see if a trend develops."
The breakdown for October sales activity in the areas the Orlando Regional Realtor Association follows is Orange: 6.7 percent below October 2014; Osceola: 6.8 percent below; Seminole: 8.3 percent below; and Lake: 3.4 percent above.