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.

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Orlando Regional Housing Market Report - July 2023

The housing market in the Orlando Region experienced notable shifts in July 2023. This report provides an in-depth analysis of the key trends and developments that unfolded within the housing market during July 2023 in Central Florida (Lake, Orange, Osceola, and Seminole Counties). Sales Activity The impact of higher interest rates and the amount homeowners holding onto favorable mortgage rates, led to a mild slowdown in sales activity across the Orlando Region in July 2023. Closed sales recorded an 8.7% decrease compared to June 2023, indicating a modest reduction in buyer demand. Moreover, compared to the same period in the previous year, sales in July 2023 experienced a more pronounced decline of 13.8% from July 2022. This trend can be attributed to the cautious approach of potential buyers in light of the changing interest rate landscape. Interest Rates July 2023 witnessed interest rates hovering just under 7% (specifically, 6.8% in Central Florida). This marks the second-highest level in the past two decades within Central Florida. The impact of these rates on the housing market cannot be understated due to the influence on buyer affordability and demand. Price Trends The housing market in the Orlando Region experienced a moderation in price growth during July 2023. Average Home Price: The average home price in July 2023 settled at $444,555, signifying a decline of 3.6% from the preceding month when the average price was $461,242. Median Home Price: The median home price for July 2023 was reported at $380,000, reflecting a 1.3% drop from the median price of $385,000 observed in June 2023. Importantly, July 2023 marked the first instance in the year where the median home price experienced a decrease. Single-Family Market Snapshot As of August 15, 2023, recent data on single-family-only home prices (looking back 30 days) was: Median Price: $440,000 Average Price: $540,516 Inventory July 2023 saw a 15% increase in inventory when compared to June 2023. Despite this rise, the housing market remains characterized by tight supply, with inventory equivalent to approximately 2 months of supply. This scarcity of inventory continues to influence market dynamics and impact buyer choices. Market Resilience The Orlando Region's housing market remains resilient, influenced by various factors that are shaping buyer behavior. The recent migration of approximately 80,000 individuals from Miami to areas like the rural parts of Central Florida underscores the desirability of the region. The evolving interest rate landscape and Federal Reserve rate plans introduce an element of uncertainty to the market. Clarity on these plans is expected to provide a more accurate forecast of future interest rate trends. Recap The housing market in the Orlando Region during July 2023 has been influenced by a combination of high-interest rates and the propensity of individuals to hold onto lower mortgage rates. This has led to a slight reduction in closed sales, with a decline of 8.7% compared to the previous month, and a more significant decrease of 13.8% from last year. Price trends also indicate a moderation in growth, with average and median home prices experiencing declines. While inventory levels showed a marginal increase, the market remains supply-constrained. The coming months will provide better data on how the market adapts to changing economic conditions and buyer preferences.   *Source Orlando Regional Realtor Association State of Market Report for July 2023

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From Miami To Central Florida

Between 2020 and 2022, a remarkable shift in population started in Miami, experiencing an unexpected transition as around 80,000 individuals chose to leave the city in search of something different. This transition is leading to additional growth throughout Central Florida. Pay attention to Palm Bay, Davenport, Minneola, Groveland, The Villages, Ocala, Mount Dora, Eustis, and Tavares as this transition unfolds. Oftentimes, these cities are characterized as smaller, more affordable cities that are becoming the top landing spots for homebuyers transitioning out of Miami and other urban centers across the United States. Miami has always been renowned for its vibrant culture, stunning beaches, and lively nightlife. However, for some, the cost of living increased along with other challenges posed by urban congestion and rising property prices intensified, and an increasing number of individuals and families began looking for alternatives. This trend gained significant momentum between 2020 and 2022, leading to a notable decrease in Miami's population – the first drop since the 1970s. One of the key reasons many left Miami was the pursuit of affordability and space.  Miami residents and individuals from other high-cost areas similar to New York found the allure of Central Florida's smaller cities irresistible. The cost of living in these cities is significantly lower, making homeownership more attainable. The desire for larger living spaces, more greenery, and a quieter atmosphere attracted individuals to search for options outside urban life. Palm Bay, Davenport, Minneola, Groveland, The Villages, Ocala, Mount Dora, Eustis, and Tavares are some of the cities outside Orlando that have emerged as hot spots for those seeking an improved quality of life. These areas offer a mix of suburban charm, natural beauty, and proximity to amenities driving their popularity among migrants. Palm Bay and Davenport, for instance, offer a blend of suburban living with easy access to beaches and Orlando's attractions. Minneola and Groveland boast a more laid-back atmosphere, making them ideal for those looking to escape the urban hustle. The Villages, a retirement community, offers a unique lifestyle centered around active living and social interactions. Ocala, known for its equestrian culture and scenic landscapes, provides a rural retreat. Meanwhile, Mount Dora, Eustis, and Tavares exude old-world charm, featuring historic downtowns, lakeside views, and a strong sense of community. These Central Florida cities may be the perfect landing spots for those departing from Miami, New York, and other metropolitan centers throughout the U.S. As individuals and families seek communities that offer a higher quality of life, these smaller cities provide the perfect blend of affordability, tranquility, and access to amenities. Spacious homes and a more relaxed pace of life draw individuals from various walks of life to explore these cities. The migration of around 80,000 people from Miami to smaller, more affordable cities in Central Florida between 2020 and 2022 signals a significant shift in population trends. The allure of escaping high costs and urban congestion has driven individuals and families to explore areas like Palm Bay, Davenport, Minneola, Groveland, The Villages, Ocala, Mount Dora, Eustis, and Tavares. As these cities provide an escape from the urban grind while maintaining access to amenities and community, they stand poised to become the perfect landing for homebuyers leaving Miami, New York, and other urban areas. *source Business Insider

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