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Home prices swing back in areas hit hard by foreclosures

In one of the hottest years on record for Orlando-area home prices, an unlikely mix of communities — Maitland, Pine Hills,

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In one of the hottest years on record for Orlando-area home prices, an unlikely mix of communities — Maitland, Pine Hills, Oviedo and Bithlo — has had the biggest gains.Those areas had been saturated with foreclosures and short sales that depressed prices. Now that many of the distressed properties have been sold, prices are swinging back.”The ones that did the best were the ones that had been hurt the most,” said Orlando real-estate agent Barbara Hampden.Orlando Regional Realtor Association reports show that average sale prices increased about 22 percent from January through October in the core Orlando market, which is primarily Orange and Seminole counties. But in some neighborhoods, prices spiked as much as 70 percent, according to the association.Some of the most dramatic recoveries include:•Maitland, where prices have exploded this year. From the start of 2013 through October, average sales prices increased from $170,174 to $288,927, a gain of 70 percent. Early in the year, prices were depressed by the distress sales of relatively new condominiums off Maitland Boulevard, west of Interstate 4. But by October, sales in Maitland were mostly single-family homes in neighborhoods east of the interstate. The shift in the type of properties selling largely drove up prices in ZIP code 32751.•Pine Hills, a working-class area of single-family houses built during the 1950s and ’60s west of Orlando. Of the 42 homes sold there during January, 73 percent were foreclosures or short sales. Nine months later, only 41 percent of Pine Hills home sales were distressed properties. The drop in foreclosure sales helped boost average prices in ZIP code 32808 by 32 percent, to $69,566.•Oviedo, which had a 58 percent increase in prices from January through October. Filled with houses built in the past 20 years, the 32765 ZIP code had its share of foreclosures and drew investment-group buyers competing for discounted houses in good enough shape to rent without requiring expensive repairs. The average sales price rose to $269,157 in October.Bithlo, Baldwin Park and west Sanford also had hefty price gains. In some areas, however, prices stayed flat or even declined, including Azalea Park, Lockhart, Chuluota and south Seminole County near Winter Park.Recent homebuyer Will Holderness spent much of the last year searching neighborhoods for the right house. Watching prices rise during his hunt, the software engineer noticed that the areas where prices climbed the most generally seemed to be the most desirable pockets of the Orlando area.Holderness, 26, looked at houses in a wide swath of the Orlando area from January until he finally purchased a three-bedroom, two-bath house in Winter Park for $230,000 in October. He said he considered everything from his commute time to offices near the University of Central Florida to the quality of shopping, walkability and schools.”I think it really comes down to the area itself being more desirable and people wanting to be in that area,” Holderness said. “Winter Park had the shopping, the golf course, the trees. It feels like a nice place where you would want to raise your family.”Orlando real-estate agent David Welch said that even some parts of Pine Hills offer well-kept homes and blocks of houses that are owner-occupied. Located near employment centers, Pine Hills holds some opportunities for buyers with limited incomes, he added.Outside the core Orlando market, Realtor reports showed sales prices only at the county level. Seminole County had the largest gains in sales prices so far this year, according to reports by My Florida Regional MLS. Seminole prices increased 28 percent, to $167,000; Orange, 22 percent, to $165,000; Osceola, 18 percent, to $144,500; and Lake, 17 percent, to $140,500.University of Central Florida Professor Stan Smith said that overall price increases have freed up many homeowners who were “underwater” with homes that were worth less than the mortgage owed on them. As home values have climbed, he said, more of those owners have been trying to sell their houses.Despite recent gains, prices in the four-county Metro Orlando are still 16 percent lower than they were five years ago, said Smith, who reports on appreciation rates for the area. Prices in Florida declined 12 percent during that period, and throughout the nation they dropped 3 percent.During 2013, Smith said, the communities with the most appreciation were often those with lower- and moderately priced homes that drew a flurry of investor buyers. Those areas, he added, were more likely to experience the largest percentage gains in prices because they started from a low base at the beginning of the year.What the price comparison doesn’t reflect, Smith said, is that buyers of foreclosed properties may have sunk tens of thousands of dollars into abandoned and neglected homes to get them in shape. Higher prices often indicate the cost of new roofs, plumbing, paint and landscaping, he added.
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