Orlando Housing Market 2022:Prices, Trends, Forecast
Florida, in general, has a hot housing market. As millennials flock to the Sunshine state in record numbers, more and more houses are being snatched up within a month of being listed. This is seen in popular cities like Miami, where the Miami housing forecast is that it will be a seller’s market for quite some time.
Prices have continued to rise in this competitive market. The average price of a house in Orlando increased by almost 17%. Houses sold for a median price of $370,000.
However, the median price of single-family homes has drastically increased to over $400,000. Year over year, this was an increase of almost 17%. Home sales are also down year over year. They’ve decreased by approximately 34%
The price of townhouses saw a decline in July of 2022. This is the first decline in this housing type in over two years. However, there was an overall price increase of almost 12% year over year. Sales are down by almost 37%, and townhouses are spending three more days on the market than last year.
Condos are more in demand. They have seen a price increase year over year of 29.5% for a median price of $210,000. Sales are down by 35%, and condos spend an average of nine days less on the market.
Almost 100% of homes are selling for list price. This is because the market is so competitive. However, almost 40% of these homes also had price drops. That means that the person listing the home dropped the list price. Because of that, the home sold at the list price, but the list price was a bit cheaper. A trend that has been on the rise over the last few years in Florida, has been for home owners looking to sell quickly to an investors, go to larger real estate investment companies who pay cash for houses in Orlando.
According to 9 News, more and more investors are buying homes in Orlando, Florida. Last year, approximately 20% of houses in the area were sold to investors. It’s one of the top ten areas for investors to purchase properties.
More and more investors are purchasing houses because of the high rental rates. The economy is strong, and Florida is amidst a housing crisis. That has allowed landlords to charge higher rent prices than they usually would, and they’re taking advantage of that. Real estate investors aren’t willing to miss out on this opportunity.
It has made the Orlando housing market one of the most competitive markets. According to Redfin, homes receive at least six offers after being placed on the market. They are selling within ten days.
Although housing is selling fast, year over year, there was a decrease in home sales of almost 35%. Last July, 1,434 homes were sold. In July of 2022, only 941 homes were sold.
The first quarter of 2022 saw the Orlando housing market breaking one record after another as prices continued to climb. However, the resulting high prices led to fewer people buying houses.
This resulted in the housing inventory growing by almost 50% over the summer of 2022. From April 2022 to May 2022, the housing supply increased by 44.2%, according to ORRA. When over 1,200 houses hit the market, it was the most significant bump the Orlando housing supply has seen in years.
This bump in the housing supply is not enough to outpace demand yet. A housing market needs a supply of six months to be considered a healthy housing market.
If trends continue, the Orlando housing market will balance out in the next few years. The primary problem is that so many people were purchasing homes it was impossible for the supply of houses to keep up. This resulted in the real estate market having a low inventory, creating a seller’s market.
The combination of a seller’s market, low supply, and inflation have caused a dramatic increase in house prices. However, as prices continue to rise, buyers are starting to opt-out of the real estate market. That is why we see a decrease in the number of houses purchased.
As this trend continues, the supply of homes available will slowly increase. As this inventory increases, buyers will start to see prices balance out. We’re already seeing that 40% of homes sold had price drops.
These are great signs that the market is working towards a correction. It’s important to note that this correction can take years.
In the immediate future, prices will continue to increase but increase slower. Buyers will not have as much purchasing power as sellers, making it critical to learn what to look for in a real estate agent.
The increase in housing supply will provide buyers with a better selection of houses to choose from. This will lead to buyer’s being pickier over purchasing a house, comparing prices, and many will wait on a house that suits them. Over time, this will result in houses remaining on the market longer. Orlando’s Cash home buyers will become even more cautions as to what prices they will offer, because there’s inherently more risk associated with buying to flip than buying a home as a personal residence.
Combining these factors will help the market correct itself to create a more balanced Orlando housing market. However, because Orlando remains one of the hottest housing markets, it will take longer for this market correction to happen.
As more people rent houses instead of purchasing them, they’ll find that rent prices continue to increase as real estate investors ensure they get a good return on their investment.
Currently, sellers continue to hold most of the cards at the table. Real estate investors are buying up homes quickly before prices rise further. However, it’s still a good time to buy. Those interested in moving to Orlando will have more houses to choose from if they want to purchase a home. Want to check out other housing markets? Check out this article on the Jacksonville housing market.