Like Central Florida itself, the housing market in the Orlando area remains hotter than almost anywhere else in the country. Between April 2020 and April 2021, the state grew by 300,000 new residents, and the influx contributed to a rise in Orlando area home prices that will likely benefit long-time homeowners who are ready to downsize – and profit from that decision.
While it’s unlikely that metro Orlando home prices will match the 20% statewide price increase of 2021 which sent the median home price here up to $330,000, high demand and low inventory should keep sellers in a strong position this year. That’s especially good news for people who’ve owned larger properties for a long time, since the national average profit on the sale of a median-priced home rose to just over $100,000 over the summer, the highest figure since 2008.
Looking at figures from Realtor.com and the Orlando Regional Realtor Association (ORRA), the local housing market will stay active, though its 8.8% forecast for 2022 falls short of last year’s double-digit jump. They’ve forecasted a 5.4% median price increase, too. While that’s short of the November year-over-year figures that put home sales up 12.7% from November 2020, with a whopping median price increase of 20% for the month, it’s still a rising market.
Some nationwide predictions track the Orlando market pretty closely, particularly Realtor.com’s conclusion that sellers who won’t need to buy another home right away may be in the strongest position for 2022, encouraging news for people selling vacation homes or second homes.
For buyers, actually finding a property may be difficult. Housing inventory in Metro Orlando reached a 200-year low in April 2021, and ORRA data show that it improved only slightly by the end of the year. That may mean buyers will need to seek out new homes. Statewide housing start projections were set to rise more than 20% in 2021, then recede a bit this year. According to the University of Central Florida Institute for Economic Forecasting’s most recent report, 2022 will still see more new homes built this year than in 2020.
While mortgage rates may climb a bit as the Federal Reserve ponders a hike in the prime rate, they are still close to historic lows, which should keep the metro Orlando market active and rising. A recent report from Zillow forecasts a continuing rise in home prices here, and notes that we will be the ninth-hottest market nationwide (Florida claimed the No. 1 and 2 spots as well, as forecasts put Tampa and Jacksonville as the leaders among 50 metropolitan areas in the report.)
So, who’ll be moving next door this year? Millennials, most likely. There’s a generational groundswell among this generation, according to CoreLogic’s analysis of first-time home buyers’ mortgage applications in 2020, which said two-thirds of applicants were part of the generation born between 1981 and 1996.
When they start making offers, though, they can expect pretty stiff competition. According to national realtor firm Redfin.com, 57% of their Orlando home offers faced bidding wars in November 2021, a sizable jump from 45.1% of their offers getting multiple offers in November 2020. Add these factors together, and the Orlando market forecast will be a good one this year – sunny, but not blazing hot.
Eric Schreck serves as the Executive Vice President & Florida Regional Presidentof Trustco Bank. He has been with Trustco Bank for over 30 years, where he directs operations for all Florida branch offices in the state. Eric has extensive experience in sales and service initiatives, along with developing measurement standards to monitor branch performance. Eric holds a Management Science degree from Cortland College, and an MBA in Finance from Rensselaer Polytechnic Institute. Trustco Bank operates 147 branches in total, 53 located within the state of Florida, 39 of which are in Central Florida. Trustco is known for offering a wide variety of great deposit and loan products and the bank specializes in residential mortgage lending. To learn more about the bank visit www.TrustcoBank.com.