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U.S Department of Housing and Urban Development

Spotlight on the Housing Market

in the Orlando-Kissimmee-Sanford,
FL MSA
U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | January 2015

The Orlando-Kissimmee-Sanford, FL Metropolitan Statistical Area (Orlando MSA) is located in central Florida and includes four counties: Lake,
Orange, Osceola, and Seminole. The foreclosure crisis in Orlando, as in Florida generally, hit harder than in most parts of the country, but the
recovery from the crisis and subsequent recession has been faster than for the nation overall. Home prices appreciated nearly 50 percent more
than the national rate during the housing bubble, and the ensuing decline in prices was also steeper—55 percent compared with a national
decline of 32 percent. The lower property values and the resulting underwater mortgages were fueled by investor speculation and excess
housing construction going into the crisis, as well as unsustainable mortgage lending. The rise in unemployment during the recession added
further to rising defaults and the decline in property values. The share of mortgages at risk of foreclosure (those 90 or more days delinquent or
in the foreclosure process) peaked at the beginning of 2010, the same as nationally, but at a much higher rate. Orlando currently ranks 34th
among metropolitan areas for share of mortgages at risk of foreclosure. Florida, which requires a judicial process for foreclosure, places third
highest in the nation for the time it takes to complete a foreclosure, which contributes to the high rate of mortgages in the foreclosure pipeline.
The share of distressed mortgages has declined considerably in Orlando–the result of four years of above average job growth, fairly stable
gains in home prices, local legislation that curtailed some foreclosure actions, and the local use of the Administration’s mortgage assistance
programs. The need for recovery efforts continues, however, as Orlando ranks high among metropolitan areas for the proportion of mortgages
that remain underwater or near underwater. The Administration’s broad approach to stabilizing the housing market has been a real help to
homeowners in Orlando and the surrounding area. This addendum to the Obama Administration’s Housing Scorecard provides a summary of
local economic trends and conditions and the impact of the Administration’s efforts to stabilize the housing market and help local homeowners.

Population Growth, Employment,
and Housing Market:

With more than 2.1 million people according to the most
recent Census, the Orlando MSA is the 26th largest in
the nation. From 2000 to 2010, Orlando’s population
increased fairly rapidly—by an average of 49,000 people,
or 3.0 percent, a year. Natural population growth (births
minus deaths) accounted for only 27 percent of population
growth during this period, with people moving into the
area accounting for the remaining 73 percent. An average

Orlando MSA Housing Unit Growth Outpaced Population and
Household Growth During the Past Decade
Date of Census

4/1/2000

4/1/2010

Orlando MSA Population

1,644,561

2,134,411

Annual Growth Rate

—

Annual Growth Rate

3.0%

625,248

Orlando MSA Households

798,445

—

942,312

—

Annual Growth Rate
Source: Census Bureau (2000 and 2010 Decennial)

2.8%

683,551

Orlando MSA Housing Units

3.8%

of nearly 35,900 people per year moved to the Orlando MSA during the last
decade, with the highest influx—an average of 48,500 people—occurring
between the years 2001 and 2006.
During the decade spanned by the Census, new housing
production exceeded household growth in Orlando. Net annual
housing unit growth of 3.8 percent in the Orlando metropolitan area during
the last decade was much greater than the corresponding population and
household growth rates of 3.0 and 2.8 percent, respectively. According to the
Census Bureau, the rate of increase in vacant units in the Orlando metro area
during the 2000s was more than three times higher than the national rate, with
vacant units increasing at an average annual rate of 14.7 percent, compared
with 4.4 percent nationally. Investor speculation stimulated overbuilding in the
years leading up to the housing crisis, with the increase in the share of investor
purchases well above the national upturn. Specifically, from 2000 to 2005
investor home sales rose from 11.7 to 28.4 percent of total sales in the Orlando
metro area, while the corresponding increase for the nation was from 8.2 to
14.8 percent. Subprime lending also contributed to overbuilding. A study by the
National Bureau of Economic Research indicates that the Orlando MSA ranked
15th out of the top 107 metros with the highest share of subprime originations
during 2005, with subprime originations as a share of new mortgages at 25
percent in Orlando. A conservative estimate based on HMDA (Home Mortgage

Spotlight on the Housing Market in the Orlando-Kissimmee-Sanford, FL MSA | Page 1

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | January 2015
Disclosure Act) data indicates that high-cost (proxy for
subprime) originations tripled nationally between 1998
and 2005, while a study by the Center for Responsible
Lending estimates that approximately 90 percent of subprime
mortgages during that period faced increases in monthly
payments of 30 to 50 percent within a few years, causing
borrowers with subprime loans to typically default at more
than 7 times the rate of other mortgages.
Orlando’s economy is improving. The local economy
was growing rapidly before it began to decline in 2008.
From the second quarter of 2003 through the first quarter
of 2008, jobs increased at an average annual rate of 3.9
percent, compared with a national increase of 1.2 percent
during the same period. As a result of the build-up in housing
during the bubble, the impact of the foreclosure crisis and
the Great Recession were more severe for the Orlando
metropolitan area than for the nation. Jobs in the MSA
declined at an annual rate of 4.7 percent, from the second
quarter of 2008 through the first quarter of 2010, compared
with a national decline of 3.1 percent. The recovery from
the recession has been stronger for Orlando than for the
nation, however, with jobs increasing at an annual rate of
2.8 percent from the second quarter of 2010 through the
third quarter of 2014, compared with a 1.6-percent increase
nationally.
The Orlando MSA is home to several large hospitals and
institutions of higher learning. During the recent recession,
a period when every other private sector in the MSA lost
jobs, the education and health services sector expanded
at an average annual rate of 1.8 percent. Job losses were
most severe during this period in the construction sector,
where jobs declined at an annual rate of 19.3 percent and
accounted for nearly 30 percent of the loss in employment
in the MSA. Job losses were also fairly substantial for the
wholesale trade sector (-9.4 percent), other services (-7.7
percent) and manufacturing (-7.3 percent). The recovery
from the recession has been led by the leisure and hospitality
sector (4.9 percent), construction (4.2 percent), and retail
trade (4.0 percent), with jobs in education and health
services increasing at an average rate of 2.2 percent
during this period. Growth in these sectors was offset by
average annual job losses of 1.2 percent in other services
and 0.6 percent in the state and local government. The
unemployment rate for the Orlando MSA peaked at 11.5
percent in December 2009 and has since fallen to 5.4
percent as of December 2014. The national unemployment
rate peaked in October 2009 at 10.0 percent, falling to 5.6
percent by December 2014.

Home sales in Orlando have improved, but slowed slightly in
2014. After peaking at 79,900 units sold in 2005, purchases of previouslyowned (existing) homes in the Orlando MSA declined between 2006 and 2008
by an average annual rate of 23 percent. Existing home sales rose again from
2009 to 2013, increasing at an annual rate of 9.6 percent (although on a much
lower base). Sales so far in 2014 have declined slightly (-2 percent), however,
to an annual pace of 44,300. Sales of previously-owned homes in Orlando

Spotlight on the Housing Market in the Orlando-Kissimmee-Sanford, FL MSA | Page 2

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | January 2015
have followed the national trend. Existing home sales in the
nation peaked in 2005 and declined by an annual rate of
14 percent between 2006 and 2008. Existing home sales
began to rise nationally in 2009, increasing at an average
annual rate of 4.8 percent from 2009 to 2013, but slowed
in 2014, declining by 3 percent. As for new home sales in
the Orlando MSA, purchases peaked in 2006 at 33,050
units, before falling from 2007 through 2011 at an annual
rate of 17 percent. New home sales increased at an annual
rate of 35 percent (albeit on a low base) in 2012 and
2013, but the pace in 2014 slowed slightly (-4 percent) to
an annual pace of 7,275 units. Nationally, new home sales
peaked in 2005 before declining by an annual rate of 13
percent from 2006 through 2011; sales have increased
since at an annual rate of 14 percent (also on a low base)
from 2012 through 2014.
Home prices in Orlando rose and declined more
steeply than for the nation. The CoreLogic repeatsales house price index (HPI) shows that home prices in
the Orlando MSA rose 49 percent faster than for the rest
of the nation during the housing bubble and fell more
sharply (-55 percent) from their peak in October 2006 to
their low in March 2011. The national peak-to-low decline
was 32 percent (from April 2006 to March 2011). Investor
speculation had a significant impact on the rise in home
prices in the Orlando MSA, with sales to investors averaging
24 percent in Orlando during the bubble–much higher
than the 14 percent share nationally. As described earlier,
subprime lending was also a factor in fueling home prices
in the Orlando MSA. Since reaching their low point, home
prices in the Orlando metropolitan area have bounced
back more quickly—rising 41 percent compared with a 29
percent low-to-current increase for the nation. Home values
in the Orlando MSA are currently on par with prices in late2004.
The apartment vacancy rate in Orlando has
tracked closely with the national rate during the
past 2 years. According to MPF Research, the Orlando
MSA apartment vacancy rate was 3.9 percent in the third
quarter of 2014, down from 4.5 percent a year earlier,
representing fairly tight market conditions. The decrease in
the vacancy rate occurred despite increased construction
because demand for rental housing was extremely high
during the prior year. The national apartment vacancy rate
was 4.4 percent during the third quarter of 2014, down
slightly from 4.6 percent a year earlier. During the third
quarter of 2014, the average apartment rent in the Orlando
MSA increased 3.5 percent from a year earlier to $949,
compared with a nationwide increase of 3.9 percent to

$1,166. Overall rental market conditions in the Orlando metro area remain
weaker than the apartment market due to a high number of vacant single-family
rental properties. According to the CPS/HVS (Current Population Survey/
Housing Vacancy Survey) conducted by the Census Bureau, as of the third
quarter of 2014 the overall rental vacancy rate for the Orlando MSA was 12.8
percent compared to a national rate of 7.4 percent. The 2013 ACS (American
Community Survey) indicates that single-family homes accounted for 37 percent
of all rental units in the Orlando MSA, while representing 35 percent of all
rental units in the nation.

Trends in Mortgage Delinquencies and
Foreclosures:

The share of distressed mortgages in Orlando has fallen sharply
but still exceeds the national level. As of December 2014, the Orlando
MSA placed 34th out of 381 metropolitan areas ranked by share of mortgages
at risk of foreclosure (90 or more days delinquent or in the foreclosure process)
according to Black Knight Financial Services, Inc. From 2000 through 2004,
the share of mortgages at risk of foreclosure in the Orlando MSA was very
similar to the national trend, and from 2005 through early 2007, the share
of distressed mortgages in Orlando actually dipped below the national rate,
according to CoreLogic data. In 2007 and 2008, when the foreclosure crisis

Spotlight on the Housing Market in the Orlando-Kissimmee-Sanford, FL MSA | Page 3

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | January 2015
began and single-family foreclosures were largely driven by
unaffordable non-traditional loan products, the increase in
mortgages at risk of foreclosure in the Orlando MSA rose
at a much faster pace than nationally. Specifically, from
the beginning of 2007 to the end of 2008, the share of
distressed mortgages in Orlando increased from 1.2 to 11.2
percent, compared with a national increase from 1.6 to 4.5
percent. Beginning in 2009, foreclosures were increasingly
driven by loss of income, unemployment, and strategic
defaults as the economy worsened, according to research by
the Federal Reserve Bank of Chicago. A sharp spike upward
in the share of distressed mortgages occurred in 2009 for
both the Orlando MSA and the nation. By early 2010,
mortgages at risk of foreclosure reached 19.6 percent in
Orlando and 8.0 percent nationally. The share of distressed
mortgages has since fallen to 6.8 percent for Orlando and
3.7 percent for the nation. Mortgages at risk of foreclosure
are declining fairly rapidly in Orlando. Over the last year,
distressed mortgages decreased by 43 percent—from
27,300 to 15,600—compared with a national decline of
27 percent over the same period. A partial explanation for
the higher share of distressed mortgages in Orlando relative
to the nation is the time it takes to process a foreclosure in
Florida. As of the fourth quarter of 2014, the average time
to complete a foreclosure in the State of Florida was 946
days, much longer than the national average of 604 days.
RealtyTrac data show the rate of foreclosure
completions in Orlando since April 2009 has been
more than double the national rate. From April 2009
through August 2014, the number of foreclosure completions
as a percentage of all housing units was 6.1 percent in
Orlando, more than double the 3-percent rate for the nation.
Foreclosure completions have been trending downward
nationally and in the Orlando MSA since the third quarter
of 2010. As of the second quarter of 2014, the Orlando
metropolitan area had a foreclosure completion rate of 0.24
percent, much lower than the peak rate (0.56 percent) in
the third quarter of 2010, but still higher than the national
average of 0.06 percent. Second quarter foreclosure
completions in Orlando are also 15 percent above their rate
a year earlier. With rising home prices and low inventories
of homes for sale, lenders are resolving defaults more
Foreclosure Completion Rates in the Orlando MSA
Second Quarter 2014
Area
Orlando MSA
Nation
Note:

Foreclosure
Completions

Foreclosure
Rate

Since April 1, 2009
Foreclosure
Completions

Foreclosure
Rate

2,230

0.24%

57,660

6.1%

85,300

0.06%

3,921,900

3.0%

Foreclosure rates as percent of all housing units;
data through August 2014 for foreclosures since April 2009	
Source: Realty Trac and Census Bureau

quickly, particularly in states with substantial inventories of distressed mortgages
such as Florida, which has led to an increase in foreclosure filings. In addition,
due to the large backlog of cases in the Florida foreclosure pipeline, the Florida
Supreme Court ruled last May to allow lawyers to sit on foreclosure cases in
place of judges to expedite their resolution.
The efforts of numerous state and local entities and financial
institutions in partnership with the federal government have
helped contain the rate of foreclosures. In June 2013, Florida passed
a law known as the Florida Fair Foreclosure Act (House Bill 87), which placed
greater requirements on banks to prove they own the loan before initiating
a foreclosure. The bill also shortened the time period that banks may seek a
deficiency judgment, whereby a lender can recover the difference between the
foreclosure sale price of the home and the total debt owed from the borrower,
from five years to one. The need for recovery efforts continues. According to
CoreLogic, as of the third quarter of 2014 26.3 percent of mortgages in the
Orlando MSA remain underwater, although this is down from 32.3 percent a
year earlier. This compares to a 10.3 percent share of underwater borrowers
(those who owe more on their mortgage than the value of their home) at the
national level.

The Administration’s Efforts To Stabilize the
Orlando MSA Housing Market:

The Administration’s mortgage and neighborhood assistance programs—the
Home Affordable Modification Program (HAMP, which is part of the broader
Making Home Affordable program), the Federal Housing Administration (FHA)
mortgage assistance programs, the Neighborhood Stabilization Program (NSP),
and the Hardest Hit Fund (HHF) program—combined with assistance from
the HOPE Now Alliance of mortgage servicers and the National Mortgage
Servicing Settlement have helped stabilize the Orlando MSA housing market.
From the launch of the Administration’s assistance programs in April 2009
through the end of September 2014, nearly 84,800 homeowners have received
mortgage assistance in the Orlando metropolitan area. More than 45,300
interventions were completed through the HAMP and FHA loss mitigation and
early delinquency intervention programs. An estimated additional 39,500

Spotlight on the Housing Market in the Orlando-Kissimmee-Sanford, FL MSA | Page 4

U.S Department of Housing and Urban Development

U.S. Department of Housing and Urban Development | Office of Help American Homeowners
The Obama Administration’s Efforts To Stabilize the Housing Market andPolicy Development and Research | January 2015
proprietary mortgage modifications have been made
through HOPE Now Alliance servicers. While some
homeowners may have received help from more than one
program, the number of times assistance has been provided
in the Orlando metropolitan area is nearly one and onehalf times the number of foreclosures completed during this
period (58,700).
Under the landmark National Mortgage Servicing
Settlement signed in February 2012, more than 119,411
Florida homeowners have benefitted from over $9 billion
in refinancing, short sales and completed or trial loan
modifications, including principal reduction on first and
second lien mortgages provided as of June 30, 2013.
Nationwide, the settlement has provided more than $50
billion in consumer relief benefits to more than 631,000
families. That is in addition to the $2.5 billion in payments
to participating states and $1.5 billion in direct payments to
borrowers who were foreclosed upon between 2008 and
2011.
Given over three rounds, the Neighborhood
Stabilization Program has invested $7 billion
nationwide to help localities work with non-profits and
community development corporations to turn tens of
thousands of abandoned and foreclosed homes that lower
property values into homeownership opportunities and the
affordable rental housing that communities need.
NSP1 funds were granted to all states and selected local
governments on a formula basis under Division B, Title III of
the Housing and Economic Recovery Act (HERA) of 2008;
NSP2 funds authorized under the American Recovery and
Reinvestment Act (the Recovery Act) of 2009 provided grants
to states, local governments, nonprofits and a consortium of
nonprofit entities on a competitive basis; and NSP3 funds
authorized under the Dodd–Frank Wall Street Reform and
Consumer Protection Act of 2010 provided neighborhood
stabilization grants to all states and select governments on a
formula basis.
Overall, a total of $59.6 million in NSP funds has been
awarded to five grantees in the Orlando MSA: the City of
Orlando, Lake County, Orange County, Osceola
County and Seminole County. In addition, a total of
$99.7 million in NSP funding was awarded to the State
Orlando MSA Housing Units to Date Benefitting
From NSP by Type of Activity
Construction or Rehabilitation
Demolition and Clearance
Homeownership Assistance to Low- and Moderate-Income
Total Housing Units
Additional Projected Housing Units

459
37
154
650
186

of Florida, of which $21.1 million has been allocated to Osceola County.
Approximately 650 households in the MSA have already benefited from NSP,
and activities funded by the program are expected to provide assistance to an
additional 186 owner-occupied and renter households.
As part of the State of Florida’s housing recovery efforts, the Florida
Hardest-Hit Fund program was launched on April 18, 2011 to help Florida
homeowners who are at high risk of default or foreclosure. The Florida Hardest
Hit Fund is funded by $1.06 billion from the Administration’s Hardest Hit
Fund and administered by the Florida Housing Finance Corporation.
Assistance is provided through the following programs:
•	Unemployment Mortgage Assistance Program—Provides
monthly payment assistance up to $24,000 on behalf of unemployed or
underemployed homeowners who are unable to afford their monthly payment
for as long as 12 months.
•	Mortgage Loan Reinstatement Program—Provides up to $25,000 in
assistance to reinstate a delinquent mortgage.
•	Modification Enabling Pilot Program—Provides up to $50,000
in funds to facilitate modifications for eligible mortgages purchased in a
distressed asset sale. Principal reduction may be matched with non-program
funds to facilitate a mortgage modification.
•	Principal Reduction Program—Provides up to $50,000 principal
reduction assistance for a current homeowner with a loan recast or refinanced
to reduce a homeowner’s monthly payment.
•	Elderly Mortgage Assistance Program—Provides up to $25,000 in
funds to reinstate delinquent property taxes or liens for eligible homeowners
who have received the maximum benefit from their reverse mortgages.
As of September 30, 2014, the most recent quarter for which data is available,
the Florida Hardest-Hit Fund had disbursed approximately $417 million on
behalf of an estimated 19,761 Florida homeowners. Florida homeowners
who believe they may be eligible for these programs should visit
www.flhardesthithelp.org.

Spotlight on the Housing Market in the Orlando-Kissimmee-Sanford, FL MSA | Page 5


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