The great weather, low tax rates, and living experience keep people moving to Orlando, FL every year. In fact, Orlando has been gaining 1,000 new residents a week for the past 60 years. COVID increased the number of people wanting to make the move, even if only temporarily. The real estate market in Orlando is one of the few that have a global interest. Whether it is international investors, or people from other countries seeking a vacation home, Orlando attracts people from all over the world.
While COVID shook up the real estate industry and continues to change the way we buy and sell properties, not all the changes in the real estate market are a direct result of the Pandemic. We have sorted out all the details for you here.
How it started
In April of 2020, home sales plummeted. They were 28% below the prior year. Buyers were leery of walking through someone else’s home during the start of the Pandemic and sellers only wanted serious buyers walking through their home. Virtual home tours and videos became increasingly important because they offered a safe way for buyers to view and engage with the property. Many properties went under contract before the buyer stepped foot on the property. Closings were even happening virtually, and realtors, bankers, and title companies had to adjust quickly. The real estate that did sell though, was often closing above their listing price. The median sales price of Orlando real estate for sale increased by 12.2%.
Why sales prices are up
Orlando was already seeing a shortage of homes on the market before the Pandemic hit. In previous years, there would be an average of 10,000 new construction homes on the market. Now there are not even half that. Then, as people were able to work from home many left the dense urban areas in search of larger living spaces. The influx of people moving to Orlando, FL looking for permanent or seasonal housing, increased the demand for real estate in an already tight market. The low inventory is the reason homes were selling over their list price even while home sales dropped by 28%.
How it is going
In May of this year, there were more new listings and higher sales prices for single-family homes and condominiums compared to May of last year. It is proof that the immediate effects of the shutdown were short-term. Single-family home sales are up almost 60% and sales of condominiums and townhouses are up 155%. The median sales price of single-family homes continues to rise for Orlando real estate for sale and is up 27.7% over last year. Condominium sales prices are up 24%. Keep in mind sales prices a year ago were also up from the prior year. The shortage of available housing will continue to drive sales prices up.
Where we are now
In October of 2021, home prices were up 18.2% compared to last year, putting the median sales price of homes at $325,000. Homes are selling in about half the time as they were a year ago. Last year, homes were on the market for 21 days and now they are averaging 13 days on the market. So, buyers and sellers need to be ready to move quickly. Sellers need to have their property staged and ready for closing when they list the property. Buyers must have their financing lined up and ready to go before they can make an offer. Many homes are currently receiving multiple offers and buyers are finding they need to waive some contingencies to win the bid. This is where a real estate agent, who has experience in a seller’s market, can be a great service to you if you are moving to Orlando, FL. They can negotiate terms better suited for the buyer and the seller.
What the future will bring
While no one can predict what the state of Orlando real estate for sale will be a year from now, there are a few things that we can be sure of. One, inventory will continue to be tight for a while and this will keep home prices steady and high. Due to the fires, hurricanes, and other natural disasters, raw materials for new construction is tight. Thus, new construction will not be able to catch up to current demand in the short term. Two, the trend toward virtual showings, and increased dependence on real estate technology will continue. Even when buyers and sellers feel completely comfortable touring homes in person, the convenience of the first look through video can’t be replicated any other way. And third, mortgage rates will go back up at some point, when that will be is anyone guess. So, now is the time to act and take advantage of the great rates.
Is it a good time to invest?
Orlando is still one of the best places in the country to own rental property. It is in high demand for international property buyers, investors, and new residents moving to Orlando, FL. In the spring of 2021, 46% of Orlando’s housing was occupied by renters. Even though mortgage rates have ticked up a bit, they are still low making this a great time to invest in real estate. Working with a real estate agent experienced with negotiating in a seller’s market will be your best asset. They will be able to help you win the bid without always resorting to increasing the sales price. Because of their local connections, they will be able to gain a better understanding of the seller’s needs so they can offer other contingencies.
Fernanda Negromonte is an experienced negotiator in a seller’s market. She has in-depth knowledge of the Orlando area and can help you find the primary home or investment property to meet your goals. She is happy to answer your questions and help you determine if now is the best time to sell your Orlando property.