Orlando market's 'housing hangover' shows positive signs

— -- Home sales are finally showing some signs of life in Orlando. In April, sales were up 38% compared with the same month in 2008.

"We are climbing back up," says Les Simmonds, president of the Orlando Regional Realtor Association. "And we're encouraged by that."

The Orlando market has been in a free fall since the housing bubble burst in 2006. Even though sales have perked up, home prices are still dropping, and sales in the condominium market remain quite soft.

As a result, the housing market may not yet have hit bottom.

"I'm not ready to wave the 'bottom' flag until I start to see some stabilization in prices," says Sean Snaith, director of the Institute for Economic Competitiveness at the University of Central Florida.

It's unclear how soon that will happen, because Orlando, home to Walt Disney World Resort, is still seeing short sales and foreclosures, which drag prices down.

Subprime loans were the original cause of the housing meltdown, but now job losses are making it hard for many homeowners to keep up with mortgage payments.

"The whole housing hangover is pretty bad in Florida, and Orlando is no exception," Snaith says.

Short sales, bank-owned properties, low mortgage rates and a tax credit have attracted first-time home buyers.

"A home for $100,000 or less is getting a lot more activity now," says Simmonds. "Sales are increasing, and we are also seeing multiple offers on properties again."

Orlando has always relied on tourism, which has suffered from the recession. But the medical industry is expanding, easing the economic downturn and creating jobs.

That may help prices rise and the housing market come back to life, even though no one knows how soon it will happen.

"We're optimistic because the real estate market is cyclical," Simmonds says. "And so we'll be going into an up cycle, but we don't foresee getting back into the craziness that we had before."