Orlando Real Estate Market Sees Significant Shifts in May 2024

The Orlando housing market continues to evolve, displaying significant trends that signal both opportunities and challenges for buyers and sellers. The May 2024 housing report from the Orlando Regional Realtors Association (ORRA) paints a detailed picture of the current state of the market.

Inventory Surge Signals Market Shifts

In May 2024, the Orlando real estate market experienced a substantial rise in inventory. With 10,282 homes available, inventory levels surged nearly 100% year-over-year from May 2023. This marks the highest inventory level since September 2016, and the fifth consecutive month of inventory growth. This influx of homes on the market is providing buyers with more options, although it still remains below the six-month supply threshold that signifies a balanced market.

Steady Sales Amidst Rising Inventory

Despite the increase in available homes, the market remains active. May 2024 saw 2,909 closed sales, reflecting a 5.4% increase from April 2024. However, when compared to May 2023, there was a 7.7% decline in sales. This juxtaposition of rising inventory and steady sales indicates a complex market where homes are still moving quickly, but not at the previous year's pace.

Price Trends: Stability and Growth

Home prices in Orlando continue to rise, albeit at a moderate pace. The average home price in May 2024 was $482,295, a 5.3% increase from the previous year. The median home price also saw a slight uptick, reaching $385,000, up 1.9% from May 2023. While these price increases may challenge affordability, they also reflect the underlying strength of the Orlando housing market.

Mortgage Rates and Affordability

Interest rates saw a minor dip in May 2024, recorded at 6.6%, down from 6.9% in April 2024. Compared to May 2023’s rate of 6.62%, this stability in mortgage rates is crucial for maintaining buyer interest in a market with rising home prices. Lower rates can help alleviate some affordability concerns, although the overall impact is nuanced.

New Listings and Contracts

May 2024 was a busy month for new listings, with 4,521 homes entering the market, a 6.9% increase from April 2024. However, new contracts saw a decline, with only 2,653 new agreements signed, an 11.4% decrease from May 2023. This decline in new contracts suggests a potential slowdown in buyer activity, even as more homes become available.

Market Balance and Competition

The months of supply in May 2024 stood at 3.53, indicating a more balanced market compared to the extremely tight conditions of the past year. However, with inventory levels still below the six-month mark, the market continues to favor sellers. Homes are spending an average of 54 days on the market, unchanged from the previous month, underscoring the continued competitiveness.

Decline in Distressed Sales

A positive note for market stability is the significant decrease in distressed property sales. Only 17 distressed homes were sold in May 2024, making up 0.6% of total sales, a 34.6% drop from April 2024. This decline suggests a healthier market with fewer distressed properties influencing overall sales dynamics.

Monthly Volume and Market Health

The total sales volume for May 2024 reached $1.4 billion, a 7.0% increase from April 2024, but a slight 2.8% decrease from May 2023. This indicates strong transactional activity, even as the market adapts to the new dynamics of increased inventory and steady, though slightly tempered, demand.

Conclusion

The May 2024 housing report underscores the dynamic nature of the Orlando real estate market. With significant increases in inventory, steady sales, and rising home prices, the market presents a mix of opportunities and challenges. Buyers now have more options but must act quickly in a competitive environment. Sellers benefit from continued price appreciation but face the reality of a market with more choices for buyers. As we move into the summer months, these trends will be crucial to watch, providing insights into the market’s trajectory and the opportunities it holds for all stakeholders.