Homes in Greater Orlando are selling at a record pace
For a sense of just how strong the housing market is in the Orlando area today, consider that, according to the Orlando Regional Realtor Association, in May, 30 percent of home sales landed a contract within a week of getting listed.
That’s a remarkable figure; one that indicates Orlando’s housing market is getting stronger – and hotter. Clearly, the number of prospective buyers who are house hunting in the region is on the rise.
That report from the Orlando Regional Realtor Association also noted that in May, Orlando homes sold at the fastest rate since 2005.
For prospective buyers, that’s likely to sound frustrating. However, keep in mind that the market is expected to remain strong for the foreseeable future. That means sitting on the fence and waiting for prices to drop is not a realistic strategy.
How strong is the housing market nationally?
Across the country, home sales are booming, as more and more Americans are taking advantage of a strong economy and low interest rates. According to the Zillow Real Estate Market Report in May, the typical home stayed on the market for just 77 days. That was the shortest number of days ever reported on Zillow.
Another reason why home sales are so strong is that inventory keeps dropping. Zillow reported that across the country, prospective buyers had 9 percent fewer homes to choose from than a year ago. That represents the steepest drop in inventory since August 2013.
The drop was even more pronounced in some cities, including Columbus, Ohio, San Jose, Calif. and Minneapolis, which reported 30 percent fewer homes for sale in their respective markets.
Why is the Orlando housing market so strong?
The Orlando Regional Realtor Association notes that several factors are helping to heat up the Central Florida housing market, including:
- Very strong job growth that’s given Orlando a lower unemployment rate than the national average;
- A shrinking number of home listings, with just 2.3 month’s worth of supply, the lowest in 12 years;
- Rising buyer demand across the region, fueled in part by continued population growth as more people move to Central Florida;
- A growing number of prospective buyers who have responded to the hot housing market by being fully prepared, pre-qualified and ready to make an offer when they find the right home.
In May, Florida homeowners selling a single-family home received 96.4 percent of their original listing price. The ones selling townhouse-condo properties received 94.7 percent. That means this is a competitive market where listing prices are very close to market value.
Prices are also rising as the inventory falls. Residential real estate prices in the Orlando area — which includes houses, townhomes and condos — shot up 7 percent in May compared to a year earlier, hitting $218,000 as the median. The Orlando Regional Realtor Association reported 3,817 sales of all home types by its members in May, which is up 14 percent from a year ago.
On the other hand, buyers had 8,781 properties to look at in May, and that’s 17 percent fewer than May 2016.
The website CoreLogic reports that home prices in the Orlando-Kissimmee-Sanford metro area increased by just 0.8 percent in May compared to April – a modest hike – but that masks the fact that prices were up 8.1 percent in May compared to May 2016, a much bigger jump.
That jump is higher than the trend nationwide, where home prices increased year over year by 6.6 percent between May 2016 and May 2017. Orlando home prices are also rising faster than in Florida as a whole. In the Sunshine State, home prices rose 6.4 percent year-over-year in May.
When is a good time to start looking?
The obvious answer is now. CoreLogic is forecasting that home prices will increase an additional 5.3 percent from May 2017 to May 2018. That means there is no strong reason to wait and hope prices will eventually fall.
Florida’s housing market has been issuing the same reports month after month, including:
- More closed sales.
- Higher median prices.
- A higher number of pending sales.
In fact, according to the research department for Florida Realtors, May marked the 66th consecutive month that statewide median prices rose from one year to the next.
As prices go up, interest rates are doing the same. Freddie Mac reported that in May, the interest rate for a 30-year fixed-rate mortgage averaged 4.01 percent. In May 2016, it was lower, at 3.60 percent.
Clearly, buyer demand is helping to fuel the record-breaking upward swing in the Greater Orlando housing market. And there are no signs on the horizon that buyer demand will start to wane anytime soon.
Florida Realtors reported that the total number of sales in May — 27,850 existing single family homes and 11,538 existing condos and townhomes — was the most ever recorded for a single month in either category.
As long as the Orlando area remains a leader for creating new jobs in Florida, people will keep relocating here looking for opportunities. And those newcomers will be looking for homes.
That means prices will keep rising as buyer demand only gets stronger.
Postponing your home search would be the wrong strategy. Instead, consider contacting AV Homes today. We have built homes in some of Central Florida’s more appealing communities, including Orlando, Winter Garden, Clermont, Apopka, St. Cloud, Kissimmee, Minneola, Eustis and Groveland.
These are brand new homes with diverse floor plans, close to the major employment centers, the theme parks, and downtown Orlando.
Contact us today at 1-800-AVHOMES to learn more about the new homes we have for sale, and how we can help you make your dream of homeownership a reality.