Рет қаралды 59
How is the current real estate marketing in Orlando? Should you buy a home now?
In Florida, like across the country, the soaring cost of housing has become a major pressure point on household finances. Home prices in Florida have increased 67% since 2020 and homeowners insurance was up 42% last year.
In April of 2024, the median home sale price in Orlando reached a then-record high of $388,500. As of June, that record has risen to $395,000.
Now, all indicators point to a new median home price of well over $400,000.
According to the President of the Orlando Regional Realtor Association, this unprecedented price rise can be attributed to the most basic of economic principles: supply and demand.
Without a suitable number of active listings to keep pace with interested buyers, Orlando’s home market became significantly more competitive, driving prices up. But let's talk about why prices continue to rise, albeit slower than previous years since the pandemic, despite housing supply trending upward over the last 12 months.
Months’ supply measures the amount of time it would take for the available inventory of homes to sell based on the current sales pace. According to industry experts, a six-month home supply is ideal for creating a balanced market.
But the last time Orlando enjoyed that level of supply was in February 2011. I remember it clearly because that's when I first started my residential real estate career.
All data has shown that the demand for Orlando real estate began heating up during the COVID-19 pandemic. The combination of low interest rates and remote work gave many potential buyers the incentive they needed to enter the market in our beautiful city.
We saw a massive influx in out of state buyers that drove our prices up, especially with already low inventory.
Here are the numbers support to this. At peak demand, from March 2021 to May 2022, the months’ supply of homes in Orlando was less than one - that's when we saw homes flying off the market as soon as they went live. During that same period, the median home price rose more than 33% from $285,000 to $379,950.
Lots of those offers were cash and paid above appraised value.
Since then, the months’ supply of housing inventory has steadily increased and, as of the most recent reporting, stood at 4.15 months, while here in Oviedo, a suburb outside of Orlando is less than 3 months. Likewise, pending and closed sales has steadily decreased, suggesting, at least on paper, the Orlando real estate market might be returning to pre-pandemic normalcy.
So why, then, are home sale prices setting new record highs month-over-month? Even Oviedo is seeing a higher than normal average sales price.
Let's talk about some serious issues for home buyers. As home prices have risen, local wages have failed to keep pace, leaving many residents all around priced out of the market. I've had countless customers that waited too long and now can no longer afford the areas they wanted and rent is actually lower at this point than a mortgage.
What a buyer can afford is determined by a variety of factors, but it's advised that buyers spend at most 28% of their gross monthly income on monthly mortgage costs. Using this model, someone would need an annual income of around $115,000 to afford a home in Orlando at the current median price.
Yet, according to the most recent Quarterly Census of Employment and Wages from the Bureau of Labor Statistics, the average annual income in Orange and Seminole County is $62,171.
In the vast majority of Florida counties, the median-income household can’t afford the median-priced home, according to NBC News’ Homebuyers Index.
Then you have sellers with low interest rates that don't want to make a move considering they'd be paying a higher mortgage even with the equity they have in their home. This affects first time home buyers that are consistently priced out of what used to be entry level homes.
This has left buying a home in today's market a challenge for first time home buyers who have very little saved for a down payment and closings costs, let alone the monthly mortgage coupled with increasing home owners insurance rates.
Even so, there are great opportunities and programs that can assist home owners in the purchase of their first home so it doesn't feel like an impossible dream. That's exactly why hiring your real estate expert is such an important step. It's what will help buyers align their reality with their dream of home ownership.
If you want to know if this is your time to buy, give me a call at 407.801.9914 to discuss what options are available to you or to give you the most recent market update.
Instagram: / realtorjenelle and @WaypointRealEstateGroupeGroup
YourWaypointe.com