Housing demand in Orlando grew again

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Sun, Jan 31, 2021 at 10:45AM

Housing demand in Orlando grew again

Housing demand in Orlando grew again last month, depleting the inventory of homes in the region’s most popular price range to less than a month’s supply. Local home sales were up 3.8% from July to August, according to the Orlando Regional Realtor Association, as the local housing market blows past its early pandemic sales slump and faces a new issue: not enough homes for willing buyers.Thats the case this weekend when we have submitted above asking prices for homes on behalf of clients only to be told to come back with our highest and best and re submit yet another offer.Land sales are in an equally stupid place with every parcel now pending at crazy $.We wont name and shame the Agents who are unethical in their current approaches.Its leaving first time buyers heart broken.A major builder had agreed to sell an inventory home to our client yesterday and an appointment was set to write contracts. We drove an hour as did the client and arrived early to the meeting and told to sit in waiting room.Three hours later the site agent said sorry we have sold it to the person who arrived before your set appointment but we have another but that will be $5000 more..... So thats the current market conditions that we are facing.

Not slowing down 

There were 3,539 home sales recorded in the Orlando area in August, up 4.2% from 3,397 sold in August 2019 and nearly a 4% bump from the 2,679 sold last month, according to the Realtor association.

The approach of fall usually signals a slowdown in home sales, but this year is different,

There are a couple of reasons the housing market remains hot.

  • One is low interest rates. In fact, the average rate paid by an Orlando homeowner last month was 2.85%, down nearly 3% from July. Low rates open the possibility of a home purchase up to more buyers. In fact, the current rates on average give buyers a 10% bump in purchasing power,
  • The second reason is a resumption of migration to Central Florida. Realtors across Orlando consistently identify California and New York as common places buyers have poured in from during the pandemic. They’re mostly seeking cheaper home values and less dense living environments.

These factors have resulted in rising prices. The median sales price last month was $275,000, up 10% from the August 2019 median price of $250,000, and a 1.9% increase from last month’s median price of $270,000.

Home supply slips 

The demand also has drained the region of available homes. There were 5,958 local homes available to buy last month, down 22.1% from the previous year and a 4.2% drop from July.  In the $160,000-$400,000 price range, where the bulk of purchased homes are priced, the hit is even more severe. There’s less than a month of home supply in that range .For comparison, a balanced housing market has roughly six and a half months of supply, according to the Real Estate Center at Texas A&M University. Home construction fell behind early in the pandemic. In fact, new Orlando residential construction was down 31% year over year in May, according to Hamilton, New Jersey-based Dodge Data & Analytics. As home demand has roared back,new home construction is on the rise too, though it hasn’t kept up with the demand. 

The state of the housing market is important because it often is considered a reflection of the overall health of the local economy. Plus, every home sale in the state has an estimated local economic impact of $77,858, according to a 2018 study by the National Association of Realtors.

Wendy Morris

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