Home prices in metro Orlando were flat from July to August, sales fell for a second month and housing inventory rose slightly for the fourth straight month, according to the latest report from the Orlando Regional Realtor Association. But homebuyers hoping the red-hot seller’s market is tipping in their favor still have a while to wait, experts warn.
“I think we’re near the peak of the cycle, I just don’t think it’s going to be in the next month or two,” said Ken H. Johnson, a real estate economist with Florida Atlantic University.
Orlando’s median price for an existing home sale remained at $320,000 in August, the same number as reported for July, ORRA reported. Although that price reflects a 16% increase from the same time last year, it’s the first time since January that the median price didn’t rise month-to-month.
But Johnson noted that the average home price rose by more than 2% from July, which he says means the real price is still ticking up. “You multiply that by 12, you’re looking at a 24% increase over the next year,” he said.
The median is a different calculation that’s the midpoint between the lowest and highest price.
Housing inventory rose to nearly a month’s supply, according to the report, the fourth straight increase after hitting a record low in April. ORRA’s report includes homes in Orange, Osceola, Seminole and Lake counties.
Real estate agents such as Christopher Beverly of NobleGate Realty in Orlando say the market still feels tight.
“No matter what city you go to, it’s hard to find what people are looking for,” he said. “It causes some buyers to forego some wants and needs.”
Average 30-year mortgage rates were at 2.84% for the month, helping to keep the market going.
“It’s important to note that interest rates have remained low, which continues to drive demand, especially among first-time homebuyers,” ORRA present Natalie Arrowsmith wrote in a statement. “Despite our inventory increases, there are still not enough homes on the market to accommodate buyers.”
Johnson says people will likely start putting more houses on the market when they feel confident they can find another one quickly, but that won’t solve the root of the inventory crisis, which is a lag in new construction dating back to the Great Recession of 2008.
“We can’t solve the long-term inventory shortage until builders get out there and start putting units in the ground,” Johnson said.
Beverly says buyers looking for more reasonable prices need to look away from Orlando proper.
“That’s where the demand is highest,” he said. “As you go further out, it slows down, but it’s still very high.”
Typically, autumn has slowed down the demand for houses as people are hesitant to move after their children start school. But Johnson says not to count on that this year to bring prices down.
“A lot of that has gone away with the pandemic and these incredibly low interest rates,” he said.
“I think after we look back, we’ll have a little bit of seasonality, but it’s not going to have the impact that it used to. Florida is open for business, people want to relocate here, [and] in the wintertime, we become even more popular.”
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