As summer winds down in Central Florida, it’s worth noting how hot it was here – and not because of the 90-degree heat or humidity. The real heat was simmering in the real estate market.
In Florida and across the nation, the real estate market was exceptionally hot this summer, with home values up 7 percent nationally. The only challenge facing the market has been a lack of inventory in most parts of the country. But at the same time, a strong economy and historically low mortgage rates are helping to make this an exceptionally healthy and vibrant housing market.
Research also indicates that the South is fast becoming the preferred region for home buyers. According to a study by the real estate site Zillow, the nation’s strongest housing markets– and that includes the Orlando area – are in the South.
Zillow found that U.S. house prices were accelerating most rapidly across the South, with Florida, Texas and Tennessee leading the way.
If you’re a prospective buyer in the Central Florida area, now is a great time to buy. Waiting only runs the risk that prices will be even higher a few months from now.
Why is the South outpacing the nation?
It’s no coincidence that Florida, Texas and Tennessee are three of the fastest growing states in the country. All three benefit from solid economic growth, and home prices are still lower there than in California, where affordability is becoming a serious challenge in cities like San Jose, Los Angeles and San Francisco.
The combination of a healthy job market and affordable home prices have brought a steady flow of newcomers to the South, where prices keep rising as demand just gets stronger. But prices are not approaching the point where most buyers are priced out. And Zillow also reports that there are no signs on the horizon that prices will flatten out or stall in the remaining months of the year.
Where can first time buyers go?
Job growth is bringing newcomers to states like Florida and Texas, but so are affordable prices – even as prices rise here.
According to the Zillow report, Nashville and Tampa reported the fastest year-over-year home value growth, where houses have been appreciating by more than 10 percent.
Two other Florida cities, Orlando and Miami, were also among the top 10 fastest appreciating markets.
But if it sounds like it’s becoming outrageously expensive to live in Central Florida, think again. These cities are getting a boost because prices there are still affordable compared to other parts of the country.
In fact, Zillow researched markets across the nation for metro areas with lower-than-average median home values in the midst of this red-hot housing market. Zillow wanted to see which regions were most appealing to first-time buyers. Among the top 35 largest metros, Orlando and Tampa both made the list.
Zillow is also projecting that homes in Central Florida will continue to appreciate by 4.5 percent through August 2018.
Orlando and Tampa are following a nationwide trend. Home values are setting new records in half of the country’s largest metros. Those areas have not only fully recovered from the housing market crash in 2008, but are doing better than the previous peaks in 2004-2006.
Among the 35 largest housing markets, 15 now have the highest median home values ever recorded. The median home value in Portland, Oregon is now 26 percent higher now than during the peak bubble years, and in San Francisco and Seattle, prices are 20 percent higher.
Florida remains a popular destination, and Metro Orlando also has done very well this year, with the fifth fastest-growing home prices in the U.S. compared with a year earlier, a 10.8 percent jump. Still, home prices in Orlando are not five times higher than the average wage, which is the case in cities like Seattle and San Francisco. Prices in Orlando remain affordable, even as they edge higher than the pre-recession levels.
Everything lined up perfectly to keep prices rises: a strong economy and job market; strong interest in home buying, particularly among Millennials; and low inventory that meant homes on the market sold quickly.
Where are first time buyers going?
Central Florida remains one of the nation’s best markets for first-time buyers. Zillow’s research into markets with lower-than-average median home values put Orlando and Tampa near the top.
Those two cities also are projected to benefit from solid appreciation in value, and an above-average supply of homes on the market.
That’s likely to continue to bring more buyers to Central Florida. According to the real estate site CoreLogic, of the nation’s top 50 markets, 46 percent were overvalued, because home prices there are at least 10 percent higher than what is sustainable in the long-term. That’s particularly true in the Pacific Northwest and in northern California. Las Vegas, Denver and Washington D.C. are also on that list. Orlando and Tampa are not.
CoreLogic also predicted that strong buyer demand combined with tight inventory means prices will keep rising for the rest of the year. And the real estate brokerage firm Redfin reported that buyer demand keeps soaring, since there were 35 percent more requests for home tours this past July compared to July 2016. Redfin noted that buyer demand has been stronger in 2017 than last year.
That means buyers have a strong incentive to find a home now. Any challenges they’re confronting today will only get magnified as summer turns to fall, and then winter.
Like many other regions of the country, Central Florida has a strong and vibrant real estate market. That’s why AV Homes continues to build in this region, in communities that are close to the jobs in downtown Orlando, to the popular theme parks, and within easy driving distance of Orlando International Airport. AV Homes also builds communities in Jacksonville, a city with a burgeoning nightlife and located close to the beaches.
Even as the housing market has been heating up over the summer, affordability is still one of Florida’s strengths. How long that lasts is anyone’s guess, but projections are that the market will stay strong. That’s the key reason why buyers shouldn’t hesitate when it comes to finding their dream home – now.
Call us today at 1-800-AVHOMES to learn more about the homes we have available in some of Central Florida’s most appealing communities.