Kissimmee, Florida is often referred to as the city that ignores the fact it is next door to Walt Disney World. Yet that fact affects everything from the job market to the rental market. However, this and other factors don’t necessarily mean you should invest in the Kissimmee real estate market.
Let’s look at the pros and cons of Kissimmee real estate investment and the factors that should be taken into consideration after learning more about this central Florida town. Kissimmee is a town in central Florida. Kissimmee is a town in central Florida. It is home to roughly 70,000 people. It is also a Principal City of the Orlando-Kissimmee-Sanford, Florida, Metropolitan Statistical Area which includes a population of over 2 million.
The Kissimmee real estate market sits on the southern edge of the Orlando metro area. The Orlando-Kissimmee-Sanford area is home to more than two million people. Orlando may be famous for the Disney Parks, but it has seen significant economic development in its own right. In the latest quarter, real estate appreciation rates in Kissimmee have been around 2 to 2.25%.
If they remain steady, the annualized appreciation rate would be between 8% to 9%, which could trigger massive interest in the real estate investment opportunities in Kissimmee. In this article, we shall discuss some more important reasons why you may want to consider buying Kissimmee investment properties in 2020. Please note that there are many variables that can potentially impact the value of a home in Kissimmee (or any other market) and some of these variables are impossible to predict in advance.
Kissimmee Real Estate Market Forecast 2020
What are the Kissimmee real estate market predictions for 2020? Kissimmee housing market 2020 is shaping up to continue the trend of the last few years as one of the hottest markets in Florida. The latest real estate data from Zillow shows that the current median home value in Kissimmee is $230,077. Kissimmee is currently a seller’s market – which means there are a lot of qualified buyers in the market place and not enough homes for sale in the market.
The home prices have risen by 5.1% over the last year. Looking forward in this year, the Kissimmee real estate market forecast is that home prices will continue to increase by 2.1%. Since 2015, the median home price in Kissimmee has increased from $163,000 to $234,000.
Here is the Kissimmee, FL real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 2.1% till Dec 2020.
The median list price per square foot in Kissimmee is $133, which is lower than the Orlando-Kissimmee-Sanford Metro average of $151. Zillow reports that 11.1% of the listings in Kissimmee had a price cut in Dec 2019, which is a good thing for buyers. The median price of current listings in Kissimmee is $259,900 and the median price of homes that have been sold is $230,900. Homes are selling below their asking prices as the median price of homes that have been sold out is $250,300. It shows sellers were willing to negotiate on prices as they were finding it more and more difficult to sell homes at asking prices. The median rent price in Kissimmee is $1,600, which is the same as the Orlando-Kissimmee-Sanford Metro median of $1,600.
Here is a snapshot that shows the median home values in the cities which are nearby Kissimmee.
Kissimmee Real Estate Market Trends
We shall now discuss some of the latest real estate market trends in the Kissimmee such as median home prices, inventory, economy, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region. Relative affordability, strong economy and steady appreciation are some of the distinguishing factors making Kissimmee real estate market an alluring place for real estate investment in 2020.
Trulia has currently 2,947 resale and new homes for sale in Kissimmee, FL including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sales price is $220,000 and homes are selling for about $127/sqft.
As per the real estate company called Neigborhoodscout.com, the median house price in Kissimmee is $209,938, which indicates that home prices in Kissimmee are above the national average for all cities and towns in the United States. Three and four bedroom single-family detached homes are the most common housing units in Kissimmee. Other types of housing that are prevalent in Kissimmee include duplexes, row houses and homes converted to apartments. Kissimmee has more renter-occupied housing accounts as compared to owner-occupied.
Currently, there are 769 single family homes for sale in Kissimmee, FL on Zillow. Additionally, there are 219 single family homes for rent in Kissimmee, FL. Under potential listings, there are about 10 Foreclosed and 216 Pre-Foreclosure homes. These are the delinquent properties that may be coming to the market soon but are not yet found on a multiple listing service (MLS).
Following the housing market decline in 2007, single family rental properties became favorable options for investors, saving in construction or refurbishment prices. The quick turnaround for an owner to rent out their property means cash flow is almost immediate. Single family rental homes have grown up to 30% within the last three years. Almost all the housing demand in the US in recent years has been filled by single family rental units.
In the past month, 511 homes have been sold in Kissimmee, FL on Redfin.com. In addition to houses in Kissimmee, there were also 213 condos, 312 townhouses, and 6 multi-family units for sale in Kissimmee last month. The median listing price is $260,000. According their statistics, the Kissimmee housing market is very competitive. Homes in Kissimmee receive 1 offers on average and sell in around 34 days.
The average sale price of a home in Kissimmee was $239K last month, up 3.9% since last year. The average sale price per square foot in Kissimmee is $133, up 5.6% since last year. A hot listing in Kissimmee can sell for around list price and go pending in around 10 days.
Here is the latest Kissimmee housing market data for the month of Dec 2019 from Redfin.com. The sale to list price ratio shows us that it was a trending more like a seller’s market in the past month.
Kissimmee Housing Market Trends in Dec 2019
|Median List Price||$260,000|
|Avg. Sale / List||97.5%|
|Median List $/Sq Ft||$138|
|Median Sale Price||$239,000|
|Median Sale $/Sq Ft||$133|
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. There are currently 2,675 homes for sale in Kissimmee, FL on Realtor.com. The asking price of single family homes can start from $115,000 and can go up to $2.5M for a luxury property located just off 17-92 and Ham Brown Road in Kissimmee.
Kissimmee is a big rental property market. There are currently 675 rental properties in Kissimmee and their rent prices range from $100 to $45,000 per month. There are 232 new construction homes for sale in Kissimmee within a price range of $188,000 to $2.3M.
The most affordable new constriction homes can found in Poinciana-Village 3 neighborhood in the city of Kissimmee, FL. Poinciana-Village 3 is a popular neighborhood for home buyers who can afford to buy a home in the median price range of $195K. Flora Ridge is the most affordable neighborhood in Kissimmee, with a median listing price of about $190,000.
According to Realtor.com, in December 2019, the Kissimmee housing market was a seller’s market, which means there were roughly more buyers than there were active homes for sale. In other words, there were a lot of qualified buyers and not enough homes for sale in the market. Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. In Kissimmee, the sellers have held good leverage in these negotiations in the past month. On an average, they could buy homes for 97.96% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
In December 2019, the median list price of homes in Kissimmee, FL was $249.9K, trending up 6.3% year-over-year. The median listing price per square foot was $137. The median sale price was $234K.
Kissimmee is a minimally walkable city in Osceola County of Florida. Some of the popular neighborhoods in Kissimmee are Buenaventura Lakes, Celebration, Solivita, The Oaks, Terra Verde, Veranda Palms, Capri at Hunters Creek, Pebble Creek, Venetian Bay, Kissimmee Bay, Kissimmee Highlands, Lake Berkley, Kissimmee Isles, Remington, Lakepointe and Orlando Sun Village. Celebration has a median listing price of $427.4K, making it the most expensive neighborhood. Flora Ridge is the most affordable neighborhood, with a median listing price of $189.9K.
The median list price in Kissimmee, FL is $279,990 on Movoto.com. The median list price in Kissimmee was less than 1% change from December to January. Kissimmee’s home resale inventories is 1,337, which increased 0 percent since December 2019. The median list price per square foot in Kissimmee is $141.
As you can see in the graph, the median price per sq ft in Kissimmee rose to its peak value in Oct 2019, when it was $141. In December 2019 it was $140. Distressed properties such as foreclosures and short sales remained the same as a percentage of the total market in January 2020.
Kissimmee, FL Foreclosures And Bank Owned Homes Statistics
As per the Kissimmee foreclosure data by Zillow, the percent of delinquent mortgages in Kissimmee is 2.0%, which is higher than the national value of 1.1%. With U.S. home values having fallen by more than 20% nationally from their peak in 2007 until their trough in late 2011, many homeowners are now underwater on their mortgages, meaning they owe more than their home is worth. The percent of Kissimmee homeowners underwater on their mortgage is 8.9%, which is higher than Orlando-Kissimmee-Sanford Metro at 6.1%.
|Total No. of Foreclosures in Kissimmee||1062 (RealtyTrac)|
|Homes for Sale in Kissimmee||724|
|Median List Price||$235,000 (0% rise vs Nov 2018)|
There are currently 1,062 properties in Kissimmee, FL that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 724. In December 2019, the number of properties that received a foreclosure filing in Kissimmee, FL was 25% higher than the previous month and 6% higher than the same time last year.
In Kissimmee, the zip code with the highest foreclosure rate is 34758, where 1 in every 628 housing units is foreclosed. 34741 zip code has the lowest foreclosure rate, where 1 in every 1,648 housing units becomes delinquent.
Is Kissimmee a Good Place For Real Estate Investment?
Investing in good real estate markets is touted as a great way to become wealthy. Is Kissimmee a Good Place Real Estate Investment? Many real estate investors have asked themselves if buying a property in Kissimmee is good investment? If you want to find out whether Kissimmee real estate is a good investment or not, you need to drill deeper into local trends. The Kissimmee real estate trends will tell what the market holds for the year 2020 which we have already discussed.
If you are looking to make a profit, you don’t want to buy the most expensive property on the Kissimmee real estate market and expect to make a good profit on rents. Perhaps you are looking for a slightly different hold-over, an investment property in Kissimmee that you might move into or sell at retirement in the future. Either way, knowing your profit potential and purpose is the first thing to consider. When looking for the best real estate investments in Kissimmee you should focus on neighborhoods with relatively high population density, employment growth and strong appreciation potential.
Let’s now discuss state of the Kissimmee real estate market, which can help investors who are keen to buy an investment property in this city.
Kissimmee Job Growth
The Kissimmee job market is stronger than average. Its unemployment rate is currently a fraction of a percent below the national average. The downside of the Kissimmee job market is how heavily it depends on the state of the Disney parks. If there is an economic downturn, Kissimmee suffers as the tourism numbers drop.
Barring another Great Recession, the area is expected to see better than average job growth for the next ten years. The Kissimmee real estate market is affected by the tourism industry by its wealth of service jobs, though that means many residents can’t afford to own a home here. That’s also why the area’s cost of living was rated a B- by AreaVibes.
The Property Market
The Kissimmee real estate market is constrained by Lake Tohopekaliga to the southeast and Walt Disney parks to the west. A significant amount of land inside the city limits is off-limits to development, as well. This limits where homes can be built and prevents expansion, driving up prices in the Kissimmee real estate market. The strong overall demand is why the average home costs 240,000 dollars. This is roughly in line with the average home price for the state of Florida.
And the Kissimmee real estate market is generally in line with the Orlando real estate market. This is why the Kissimmee housing market can be considered neither under nor over-priced. Yet the Kissimmee real estate market is strong. Demand in the market is so strong that homes sell on average in just a month, while the Kissimmee housing market received a competitiveness score of 72 out of 100. Prices rose roughly 3.5 percent in 2019. Prices are expected to increase 4 to 5 percent in 2020.
The relatively large number of second homes and investment properties in the area mean that there is a larger than average number of distressed properties. For example, there are twice as many people delinquent on their mortgage than average. And nearly 10 percent more than average have negative equity in their homes. This presents the opportunity to find bargains in the Kissimmee housing market.
Florida doesn’t have an income tax, but it makes up for it in sales taxes and property taxes. The average effective property tax rate in Florida is roughly 1 percent. Osceola County has a high property tax burden relative to local incomes, and this prevents many from being able to afford owning a home here. That’s partially due to the disproportionate number of people working in seasonal or low-paying service jobs. Note that you’ll have to pay a sales tax on any short term rentals.
However, the tax burden on a Kissimmee real estate investment is far lighter than what you’d pay on a Miami property. The average Kissimmee property tax bill is around 2,000 dollars. It approaches three thousand dollars in Miami’s Dade County. However, the impact of low paying jobs relative to the cost of housing is much greater for those living in the Kissimmee housing market.
The Legal Climate
High rental rates are one point in favor of Kissimmee real estate investment. Kissimmee and Orlando are two of the hottest short term rental markets in the country. Kissimmee hasn’t banned short term rentals, but it requires permits and hotel tax collection. You may have to get a license from the state, the county and the city, depending on how the area is zoned. Be very careful about buying Kissimmee real estate investment property to rent out to Disney tourists.
In general, you can’t rent out the entire property to tourists unless it is in a R-3 transient rental district. And that excludes most residential areas. Primary residences can often be rented out short term if the resident is home and only renting out a room. That precludes investors buying homes in the Kissimmee real estate market and renting it out to tourists. Homeowners associations in Florida are very strong. If the property is part of an HOA, you must have their permission to rent it out. Note that this includes condos controlled by a condo association.
Yet the Kissimmee housing market is relatively landlord friendly. A Kissimmee real estate investment rented to locals is a relatively safe investment. Florida itself is landlord friendly, and you won’t face a lot of hurdles evicting someone for non-payment of rent. You can begin the process once the rent is three days late. After five days, you can legally lock them out. Deposits can include several months’ rent, and the deposit is often non-refundable. And unlike other states, Florida recently passed laws making it more landlord friendly. For example, security deposit disclosures were reduced.
Quality of Life
One downside of the massive influx of tourists is that it contributes to higher than average crime rates. Schools are rated a D-. That makes the Kissimmee area a great place to visit but not raise a family. The infrastructure geared toward tourists is why the city received an A+ for amenities. Yet that means many are willing to live in Kissimmee and commute to jobs in Orlando which is about half-hour drive away.
Investing in Kissimmee Real Estate or Not: The Conclusion
Maybe, you have done a bit of real estate investing in Kissimmee, FL but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Should you consider Kissimmee real estate investment? The Kissimmee real estate market is reasonably priced with a massive rental market. The legal and tax climate is so amenable that the area is attracting investors from California and New York. As long as you understand the rules and restrictions, it is a good opportunity for investors.
A good cash flow from Kissimmee investment properties means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding a good Kissimmee real estate investment opportunity would be a key to your success. If you invest wisely in the Kissimmee real estate, you could secure your future.
If you are a beginner in the business of cash flow real estate investing, it very important to read good books on real estate. You must also collaborate and learn from savvy investors who have retired early on in their lives by investing locally in the Kissimmee real estate market. As with any real estate purchase, act wisely. Evaluate the specifics of the Kissimmee housing market at the time you intend to purchase.
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. Choosing a real estate professional/counselor continues to be a vital part of this process. They are well-informed about critical factors that affect your specific market area, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing and interest rates.
NORADA REAL ESTATE INVESTMENTS strives to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in the U.S. growth markets. We can help you succeed by minimizing risk and maximizing profitability.
The aim of this article was to educate investors who are keen to invest in Kissimmee real estate in 2020. Purchasing an investment property requires a lot of studies, planning, and budgeting. Not all deals are solid investments. We always recommend to do your own research and take help of a real estate investment counselor.
Other Good Markets To Invest in Real Estate in 2020
The other good place for real estate investment is Clarksville in Tennessee. The Clarksville TN housing market offers a number of strong fundamentals. There is a solid job market and massive rental market. As long as the military base doesn’t close, the area will see continual growth. Yet there isn’t enough demand to lead to a building boom that will kill property prices.
Another good market to invest in real estate in 2020 is Edmond in Oklahoma. If you are considering investing in the south central part of the United States, we would recommend Edmond real estate market over trying to buy more expensive and more heavily taxed properties in Texas. The Edmond housing market isn’t as cheap as other parts of Oklahoma, but it benefits from strong population growth, a solid job market and excellent long-term trends that will keep both rents and property values growing for years to come.
Remember, caveat emptor still applies when buying a property anywhere. Some of the information contained in this article was pulled from third party sites mentioned under references. Although the information is believed to be reliable, Norada Real Estate Investments makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. All information presented should be independently verified through the references given below. As a general policy, the Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
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