Orlando trending toward a 'more healthy' housing market but high prices still a barrier

Home prices hit a record high in the Orlando area this summer, but experts say 2024 has brought some stability to the housing market, with more properties for sale and more buyers securing a home.

Still, housing costs have increased more than wages in Central Florida, so many would-be buyers still struggle to find properties they can afford.

The median monthly home price in Central Florida was $395,000 in June, according to Orlando Regional Realtor Association, the highest price on record. It fell slightly to $390,000 in July, but five years ago, in June 2019, the median monthly home price was $250,000.

A small drop in mortgage rates last year and an increased number of homes for sale has made the market busier.

The number of homes for sale in the Orlando area has increased seven months in row, hitting 11,158 properties in July, up about 3,000 from five years ago and the highest number since November 2015, according to the realtor association.

“What we’re seeing is, as of late last year around November and December when the interest rates came down just a little bit, it really triggered the market and got buyers back out there,” said Rose Kemp, the association’s president. “The other awesome trend is that we started seeing more inventory,” she said. “Our inventory has been rising since last year around November and that’s actually a really good indication of a much more healthy market.”

Sehara Hill, a 29-year-old pharmacist from Maryland, moved to central Florida to work at the Veterans Affairs Health Care System and first planned to rent.

“I just got my real career a year ago, so I didn’t even think I could do this, I thought it would be too expensive and I didn’t know what I needed,” she said. “I was actually going to move into an apartment.”

But Hill decided owning would make better financial sense than renting and is in the process of purchasing a home in east Orange County.

“So many people are afraid of that commitment but the equity will build over time and, if you can afford it at today’s rate, the difference between the rent and the mortgage is pretty close,” she said. “If there’s assistance for the down payment you might as well be working to own something.”

But for some would-be buyers the high cost of many of the homes for sale is keeping them out of the market, said Anne Ray, manager of the Florida Housing Data Clearinghouse at the University of Florida’s Shimberg Center for Housing Studies.

“Wages have gone up a little bit as inflation has taken place, and there’s been a lot of job growth, but the housing costs growth really has outpaced that,” Ray said. “An increasing number of people are having difficulty purchasing homes and an increasing number of people are having difficulty affording the rent. That’s all kind of leveled off recently, but it’s leveled off at these higher levels.”

Central Florida needs to increase the supply of affordable housing units, both those available for rent and purchase, Ray said.

“I think affordable rental housing is one of the best home ownership programs we have out there,” she added. Otherwise, people are “paying so much of their income for rent that they can’t really get ahead and get ready to save for a home.”

For some looking to buy in Central Florida, it can take months of waiting and a few extra dollars to actually land a house. as Louis Bieler discovered.

Bieler, a 35-year-old airline pilot who moved to Orlando last year, said he didn’t want to pay thousands in rent due to his flight schedule and constant traveling for work. Instead, he wanted to buy a multi-family home, with a unit he could live in and another he could rent out.

“It took me about three months before I found something, and I lost three prospective properties that fit the bill,” he said. “The multi-family property market is aggressive and when I bought, I actually ended up offering $10,000 more just to get a seat at the table because there’s so many cash investors coming in and just buying. That was the only way I was able to get my name on a list.”

Bieler said real estate companies seem to be buying lots of houses they turn into rentals, making it hard for individuals to get into the market.

“Once they raise a neighborhood up, the prices are so inflated because they’ve got the monopoly of the neighborhood,” Bieler said. “People are coming from South Florida or other places and buying it cash because they have money.”

Homes at or below the median monthly home price, or selling for less than $400,000, are sought after by both first-time buyers and investors looking for rental homes, making that share of the market particularly competitive, Kemp said.

Newcomers moving to the region add to the pressure, she said.

“We’re currently at an estimated 1,000 people per week relocating so, although our inventory climbs, we still have that huge housing demand at the same time,” she said. “There’s a lot of builders, Orlando is growing in every single direction every quarter, every sector.”

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