Orlando Trending Toward a ‘More Healthy’ Housing Market but High Prices Still a Barrier
The journey toward achieving a balanced housing market in Orlando has seen its fair share of ups and downs. With home prices reaching unprecedented highs this summer, the landscape for buyers and sellers in Central Florida has been anything but predictable. Yet, as we step into the later half of the year, signs of stability begin to surface, signaling a potentially ‘more healthy’ housing market on the horizon.
Despite the promising shift towards market stability, with an increase in property listings and a slight dip in home prices, a significant hurdle remains for many prospective buyers — affordability. Central Florida has witnessed a sharp rise in housing costs, a trend that has unfortunately outpaced wage growth in the region. In June, the median home price soared to $395,000, marking a record high for the Orlando area, as reported by the Orlando Regional Realtor Association. Although there was a slight decrease to $390,000 in July, the comparison to June 2019’s median price of $250,000 starkly highlights the rapid escalation in property values over a relatively short span.
The latter part of the previous year saw a minor reprieve in mortgage rates, alongside an uptick in the number of homes hitting the market — a development that has revitalized buyer interest and activity. July’s data showcased an inventory of 11,158 properties, a significant rise from figures recorded five years prior and the most substantial since November 2015. “Our inventory has been rising… that’s actually a really good indication of a much more healthy market,” commented Rose Kemp, president of the association, highlighting the positive trend.
For individuals like Sehara Hill, a 29-year-old pharmacist who recently relocated to Central Florida, the dream of homeownership is becoming a reality. Initially considering renting, Hill soon recognized the financial wisdom in building equity through property ownership, especially given the closing gap between rental and mortgage costs. “If there’s assistance for the down payment you might as well be working to own something,” she advised, reflecting a growing sentiment among first-time buyers navigating today’s complex market.
However, Anne Ray, manager of the Florida Housing Data Clearinghouse, points out that for many, the dream remains just out of reach. “Wages have gone up a little bit… but the housing costs growth really has outpaced that,” Ray explained. The affordability crisis impacts not only buyers but also renters, further emphasizing the need for a substantial increase in affordable housing inventory — both for rent and purchase.
Prospective homebuyers like Louis Bieler, a 35-year-old airline pilot, recount the competitive and costly nature of the housing market. Bieler’s quest to buy a multi-family home required months of search and a strategic overbid to secure a property amidst a fiercely competitive environment dominated by cash investors. “The multi-family property market is aggressive… That was the only way I was able to get my name on a list,” Bieler shared, highlighting the challenges faced by many looking to enter the market.
The interest in homes priced at or below $400,000, attractive to both first-time buyers and investors, has intensified the competition, making these properties particularly elusive. According to Kemp, the influx of new residents, estimated at 1,000 people per week, coupled with the region’s expansive development, continues to strain the housing supply, despite the growing inventory.
As Orlando navigates its path towards a more equitable housing market, the challenges of affordability and demand persist. Though the recent trends offer a glimmer of hope for stabilizing the market, addressing the affordability gap remains a critical hurdle to ensure that the dream of homeownership becomes accessible to all.
