August 2023 Orlando Area Housing Market Update

In August 2023, the Orlando housing market showed some interesting trends that could significantly impact both buyers and sellers. With inventory on the rise, closed sales slipping, and mortgage interest rates remaining over 7%, the real estate landscape points to a cooling period this fall. What does the rest of 2023 hold for Orlando's housing scene?

One of the standout features of the Orlando housing market in August 2023 is the notable increase in inventory. Compared to July 2023, there was a 6.9% month-over-month rise in available properties. However, it's crucial to note that inventory is still 9.6% lower when compared to August 2022. 

Closed sales in August 2023 have taken a hit, with a 2.1% decrease compared to July 2023 and a substantial 16% decline year over year when compared to August 2022. This decline in closed sales can be attributed to several factors, including rising interest rates and the increase in inventory. Buyers are now more cautious, taking more time to make decisions and many backing out of deals, which has contributed to the overall decrease in sales.

The rise in interest rates on 30-year fixed mortgages has and will continue to affect the Orlando housing market (now hovering over 7%). These higher rates have made it more expensive for buyers to finance their homes, reducing the pool of qualified buyers. As a result, many potential buyers and sellers are adopting a wait-and-see approach, hoping for more favorable conditions in the future.

Traditionally, the fall season tends to bring a cooling effect to the real estate market. Given the increased inventory and decreased closed sales, it appears that Orlando is poised for a buyer's market this fall. Buyers can expect less competition, a wider range of choices, and potentially some relief in home prices. Sellers, on the other hand, may need to adjust their expectations and pricing strategies to attract buyers in this changing landscape.

As we move closer to 2024, there is a lot of uncertainty in the housing market, primarily driven by the Federal Reserve's actions and policies. Many are eagerly awaiting more clarity on the Fed's direction, as it will undoubtedly have a substantial impact on interest rates and the overall economic environment. Orlando's housing market will likely continue to evolve in response to these broader economic factors.

In August 2023, the Orlando housing market is experiencing a shift towards a buyer's market. Rising inventory, declining closed sales, and the challenge of high-interest rates are the defining characteristics of this period. Buyers have a unique opportunity to benefit from reduced competition and more choices, while sellers may need to adjust their strategies to accommodate changing market conditions. The future remains uncertain, we are hoping to gain more clarity - on the Orlando housing market - from the Federal Reserve as we head into 2024.