Orlando has once again proved to be one of the best places to invest in real estate in Florida. Owing to its picturesque beaches, rapidly improving quality of life, booming population and economy, Orlando is proving to be a secure real estate investment destination for not only local but also international investors.
We’ll be discussing the latest Orlando real estate market trends & statistics to find out how they can affect the investors and homebuyers in 2020. Orlando home prices are expected to rise by around 5% in 2020. With a median home price of $250,000, the Orlando housing market is expanding at a great pace and people from all over the country and even beyond are either choosing to move permanently or invest here.
Compared to other cities with competitive real estate markets, investing in the Orlando real estate makes more sense since it has experienced a 6.38% increase in the median home price since February 2019. Not to mention, the Orlando region is booming in terms of both population and jobs.
There is a great demand for rental properties due to the high proportion of renters (65.29%). Moreover, Orlando real estate prices remain highly affordable with a median value of $250,000 (as on Feb 2020). We can say that this is true for the entire Florida real estate market. According to Zillow, the first-time buyers in the U.S. looking for an affordable home without much competition may have the best luck in the State of Florida, with Orlando real estate market ranked high in the “Top 10 best cities for first-time home buyers.”
Is Orlando going to be the best real estate market for investors in 2020? To answer this question, let’s take a look at the latest Orlando housing market trends and find out the prospects of investing in the Orlando real estate in 2020. The home prices are expected to flatten nationwide, increasing by just 0.8%, and buyers will continue to move to affordability, benefiting mid-sized markets.
However, the real estate appreciation rate in Orlando in the latest quarter was around 2.21% which equates to an annual appreciation forecast of roughly between 8.5% to 9%. For sellers in Orlando, a nice profit could be on the horizon. Even small changes in the appreciation rate can change the long-term value of buying considerably. Let’s learn more about the factors that make Orlando a nice place to invest in real estate.
What Makes Orlando Real Estate Market Attractive For Investment? | |
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These are just some of the highlights that make Orlando a great place to live and invest in real estate. The list can go on and on. Let’s continue to explore the Orlando's housing market to understand what it will look like in 2020.
Real estate prices are deeply cyclical because its demand side is impacted by economic cycles, and also because demand has historically outweighed supply. Much of it is dependent on factors you can’t control. Therefore, there are many variables that can potentially impact the value of real estate in Orlando in 2020 (or any other market) and some of these variables are impossible to predict in advance.
Orlando Real Estate Market Forecast 2020 – 2021
Orlando housing market 2020 is shaping up to continue the trend of the last few years as a strong sellers' market. It is also one of the hottest real estate markets for investing in rental properties.
What are the Orlando real estate market predictions for 2020? Let us look at the price trends recorded by Zillow over the past few years. Since 2015, the median home prices in Orlando have appreciated by roughly 46.6% from $177,000 to $259,407, according to Zillow’s data.
In the last twelve months, the Orlando real estate has appreciated by 3.2%. The latest Orlando real estate market forecast is that the home prices will continue to rise by 4.4% – in the next twelve months.
The latest real estate data from Zillow shows that the current median home value in Orlando is $259,407. This indicates that home prices in Orlando are well above the national average for all cities and towns in the United States.
Here is a snapshot that shows the median home values in the some of the popular neighborhoods in or around Orlando.
Orlando is currently a hot seller’s real estate market. This indicates that there are more real estate buyers in the Orlando than there are sellers. When demand is higher than the supply, home prices increase, which benefits sellers.
Here is the Orlando real estate price appreciation graph by Zillow. It shows us the current home price appreciation forecast of 4.4% till Feb 2021.
Orlando Housing Market Forecast 2021
Here is a short and crisp Orlando housing market forecast for the 3 years ending with the 3rd Quarter of 2021. The accuracy of this forecast for Orlando is 85% and it is predicting a positive trend.
The LittleBigHomes.com estimates that the probability for rising home prices in Orlando is 85% during this period. If this price forecast is correct, the Orlando home values will be higher in the 3rd Quarter of 2021 than they were in the 3rd Quarter of 2018.
Check this page each quarter for updates to the Orlando Housing Market Forecast.
Latest Orlando Housing Market Trends
Analyzing real estate data from multiple sources gives us a much broader perspective of the direction in which a market is moving. We shall now discuss some of the most recent housing trends in the Orlando area from multiple sources and compare it with past couple of years. We shall mainly discuss about median home prices, inventory, growth and neighborhoods, which will help you understand the way the local real estate market moves in this region.
Note: Currently, we are unable to predict what might be the impact from the ongoing pandemic on the real estate market. So we shall keep that factor aside as things are changing on an hourly basis.
Orlando has an average Walk Score of 41 with 238,300 residents. The city has some public transportation and is somewhat bikeable. The most walkable Orlando neighborhoods are South Eola, Central Business District and Lake Eola Heights.
On average, homes in Orlando, FL sell after 76 days on the market. The trend for median days on market in Orlando, FL has gone up since last month, and slightly down since last year.
Orlando housing market in February saw its home sales improve by more than 4% compared to February 2019, while the median price increased by 6%. Inventory experienced a year-over-year decline of 17% and continues to be a mitigating factor, according to the latest housing market report released by the Orlando Regional REALTOR® Association.
The overall median price of Orlando homes (all types combined) sold in February is $250,000, which is 6.38% above the February 2019 median price of $235,000 and up 2.0% compared to the January 2020 median price of $245,000. The median price for single-family homes in February increased 8.0% over February 2019 and is now $270,000. The median price for condos increased 6.2% to $145,500.
Orlando Housing Affordability Index
The median household income in February was $59,717, and the housing affordability index was 139.71, down from 140.36 last month. The first-time homebuyers affordability index decreased a fraction to 99.35 from 99.81% last month.
The lower the aforementioned ratio, the more affordable homes are – when comparing the house price to the household income. For e.g; an affordability index of 99% means that buyers earning the state-reported median income are 1% short of the income necessary to purchase a median-priced home.
Conversely, an affordability index that is over 100 means that median-income earners make more than is necessary to qualify for a median-priced home.
The affordability index shows the relative affordability of cities (on a scale of 1 to 10; 1 is the most affordable, 10 is least affordable). It’s based on the percentage of annual income required to buy a median-priced home in each metro area in late 2019.
Orlando Housing Units
According to Neighborhoodscout.com, a real estate data provider, one and two bedroom large apartment complexes are the most common housing units in Orlando. Other types of housing that are prevalent in Orlando include single-family detached homes, duplexes, row houses and homes converted to apartments.
At the national level, the 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. With 2020 being, theoretically, in the middle of a boom, there’s still 4 years for residential construction to surge. Most likely, a housing shortage will remain in 2020, keeping home prices high.
Orlando has a mixture of owner-occupied and renter-occupied housing units. Trulia has 3,325 resale and new homes for sale in Orlando, FL, including open houses, and homes in the pre-foreclosure, auction, or bank-owned stages of the foreclosure process. The median sales price of homes in Orlando is $255,000 and homes are selling for about $154/sqft.
Some of the most popular neighborhoods in Orlando are Alafaya, Meadow Woods, Metro West, Lockhart and College Park. Here you’ll find the maximum no. of listings.
Orlando Real Estate Market Inventory
Currently, there are 1308 homes for sale in Orlando on Zillow, an online real estate database company. Additionally, there are 520 homes for rent. Under potential listings, there are about 11 Foreclosed and 574 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).
- The median list price per square foot in Orlando is $163, which is higher than the Orlando-Kissimmee-Sanford Metro average of $151.
- The median price of current listings is $285,000.
- 5.2% of the listings in Orlando had a price cut in Jan 2020.
- The median price of homes that were sold out is $267,800.
- The median rent price in Orlando is $1,600, which is the same as the Orlando-Kissimmee-Sanford Metro median of $1,600.
There are currently 5016 homes for sale and 2026 homes for rent in Orlando, FL on Realtor.com, a real estate listings website. According to their statistics, in February 2020 the Orlando housing market was a balanced market, which means there was a healthy balance of buyers and sellers in the market.
However, as per other real estate data sources, Orlando is a hot seller’s market due to very tight inventory. It is having a clear positive price appreciation forecast for the next twelve months.
Ideally a buyer would prefer a sale to asking price ratio that’s closer to 90%. The sellers in Orlando have managed to hold good leverage in these negotiations in the past month. On an average, they could sell homes for 98.15% of the asking price. A seller would always prefer scenarios which can yield a ratio of 100% or higher.
- In February 2020, the median list price of homes in Orlando was $275,900, trending up 6.1% year-over-year.
- The median listing price per square foot was $158.
- The median sale price was $260,000.
- The median rent price was $1,590.
The asking price of single family homes in Orlando can start from $25,000 and can go up to $7.9M for a luxury property located in the neighborhood with zip code 32836. There are currently 356 newly listed homes and 442 new construction houses available for sale in the Orlando housing market.
Baldwin Park has a median listing price of $580,000, making it the most expensive neighborhood. Rosemont is the most affordable neighborhood, with a median listing price of $105,000.
Orlando Real Estate Foreclosure Statistics 2020
Looking for foreclosure homes in Orlando? As per the Orlando foreclosure data by Zillow, the percent of delinquent mortgages in Orlando is 1.2%, which is higher than the national value of 1.1%. The percent of Orlando homeowners underwater on their mortgage is 6.6%, which is higher than Orlando-Kissimmee-Sanford Metro at 6.1%.
There are currently 1,673 properties in Orlando, FL that are in some stage of foreclosure (default, auction or bank owned) while the number of homes listed for sale on RealtyTrac is 1,308. In February 2020, the number of properties that received a foreclosure filing in Orlando, FL was 11% higher than the previous month and 15% lower than the same time last year.
| Potential Foreclosures in Orlando | 1673 (RealtyTrac) |
| Homes for Sale in Orlando | 1308 |
| Recently Sold | 7737 |
| Median List Price | $274,900 (2% rise vs Jan 2019) |
In Orlando, the zip code with the highest foreclosure rate is 32810, where 1 in every 849 housing units is foreclosed. 32806 zip code has the lowest foreclosure rate, where 1 in every 1378 housing units becomes delinquent.
Is Orlando a Good Place To Invest in Real Estate?
Now that you know where Orlando is, you probably want to know why we’re recommending it to real estate investors. Is Orlando a Good Place Real Estate Investment? Investing in real estate is touted as a great way to become wealthy. Many real estate investors have asked themselves if buying a rental property in Orlando is good investment?
You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Orlando housing market 2020 forecast for answers on why to put resources into this market.
Purchasing an investment property in Orlando real estate is a little different from shopping for your car or primary residence. While you still want to get the most for your money, if you are looking to make a profit, you don’t want to buy the most expensive property on the Orlando real estate market and expect to make a good profit on rents.
Perhaps you are looking for a slightly different hold-over, a turnkey investment property in Orlando 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.
Let’s take a look at the number of positive things going on in the Orlando real estate market which can help investors who are keen to buy an investment property in this city.
1. Increasing Foreign Investment
International investors from all major countries of the world are exhibiting their interest in the Orlando real estate market because of its beautiful scenery, improving quality of life and ambient weather. It is also extremely popular for foreign investments because of its intercultural connectivity with people from various Latin American countries. In addition to this, many Chinese as well as Spanish and Middle Eastern investors are also attracted to Orlando, FL for real estate investment.
2. Dramatic Population Growth
Owing to people from various walks of life and demographic differences choosing to reside in the suburbs of Orlando, this city is going through a major population growth. During the last 3 years, the population in Orlando has been growing at the rate of 7.2% which has never been experienced by this city before. The current population of Orlando in 2020 is 1,964,000, a 2.13% increase from 2019.
The population of Orlando in 2019 was 1,923,000, a 2.18% increase from 2018. Orlando is rapidly becoming a central attraction for businessmen, students and small families owing to its growing trend of upward life mobility which makes lures investors to invest in the Orlando real estate market.
3. Increasing Job Opportunities
Orlando is the new hub for many young professionals especially those with various types of technological expertise, including engineers and IT professionals. This city has experienced an annual job growth of around 4.4% and is also one of the fastest growing metro areas in the country. The city is also set to experience its highest job growth rate in the 10 years to come. A market with high job growth is a great market for real estate investment as well.
Orlando metro areas is adding STEM jobs at a faster clip than the Bay Area metros. The Orlando–Kissimmee–Sanford MSA was ranked among Forbes’ 15 Best Big Cities for Jobs. They cited Orlando’s science, technology, engineering and mathematics (STEM) job growth in recent years as one contributing factor.
4. More Rental Income
Thanks to a strong economy, Orlando's rental market continues to boom. It is #1 place in Florida to buy profitable rental property. While tourism is one of the driving forces in the local economy, Orlando is also an important high-tech hub. Since job opportunities in Orlando are growing, people from all over the country and even some other countries are choosing to move here.
This directly translates to a boom in rental income as there is a resultant increase in the demand for both residential and commercial property rentals, and this means more steady income for investors in Orlando real estate market. The soaring rental rates are good signs for real estate investors. The median rent price in Orlando is $1,600, which is the same as the Orlando-Kissimmee-Sanford Metro median of $1,600.
5. Transport Infrastructure
Another reason for the growing economy and population expansion in Orlando, Florida, is the developed transportation infrastructure which makes travelling between destinations more convenient. Generally, Florida has an efficient transportation network which complements its tourism growth as well.
6. Booming Economy
While improving Orlando real estate market and flourishing tourism are two of the most important reasons behind Orlando’s economic stability, these two industries have a lot to gain from the successful economy. This expansion is related to the growing population and job opportunities in this city, this translates to more rental income and tourism leading to better economy for the city.
7. Flexible Tax Laws
Investing in Orlando real estate market can help investors to lighten their taxes as Florida is one of the few states with no personal income tax. Its flexible tax laws are a blessing for investors especially in this climate of booming economy. Tax laws in Florida are considered to be 4th friendliest laws in the country which is why a significant number of businesses choose to be based here. Florida does impose a 5.5 percent corporate income tax.
8. Orlando is a Top-notch Tourism Center
Orlando has been boasting of economic stability since the beginning of the year 2018, and tourism growth and opportunities are one of the main reasons for its smooth expansion. Considered to be a “Theme-Park Capital of the World,” Orlando attracts most of its tourism due to the presence of Universal Studios as well as SeaWorld and the most popular, Disneyland. In addition to this, Orlando’s beautiful beaches and warm weather also attracts thousands of tourists every year.
9. Orlando Adds Value to Real Estate
Compared to saturation in similar markets in other cities like New York, Orlando real estate market has all the indicators of a flourishing growth in the current year. Emerging Trends in Real-Estate 2018 has listed Orlando as the 16th growing real estate market in USA with potential to grow rapidly. This list also includes other cities from Florida like Miami, Ft. Lauderdale, and St. Petersburg.
10. Entrepreneurship in Orlando
Orlando, owing to its friendly tax environment and affordable real estate can prove to be a vital opportunity for up and coming start-ups. Entrepreneurs and small business owners can rent showrooms and shops on better terms than most other cities and states.
Investing in Orlando Real Estate: Advice For New Buyers
Maybe you have done a bit of real estate investing in Orlando 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. Orlando real estate market has a high potential for growth considering the current state of its economic expansion and population influx. This market currently has an ideal environment for US investors in housing properties especially for turnkey real estate investments.
A good cash flow from Orlando rental property 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 best investment property in Orlando in a growing neighborhood would be a key to your success.
If you invest wisely in Orlando 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. The less expensive the Orlando investment property is, the lower your ongoing expenses will be.
When looking for real estate investment opportunities in Orlando or anywhere in the country, the generally accepted standard is to purchase a property that will give you a modest but minimum 1% profit on your investment. An example would be: at $120,000 mortgage or investment cost, $1200 per month rental.
That would be the ideal equation example. Even with rent increases, buying a $500,000 investment property in Orlando is not going to get you $5000 per month on rent. When looking for the best real estate investments in Orlando, you should focus on neighborhoods with relatively high population density and employment growth.
Both of them translate into high demand for housing. If housing supply meets housing demand, real estate investors should not miss the opportunity since entry prices of homes remain affordable. You must also collaborate and learn from savvy real estate investors who have retired early on in their lives by investing in some of the best real estate markets like Orlando.
You should also join real estate investment clubs in Orlando and try to make connections with fellow investors. To be effective in the real estate industry, a concrete marketing design is vital. The real-estate market is constantly changing in their methods on how to look for that right property.
Let Us Help You In Buying Your First Investment Property in Orlando
Buying or selling real estate, for a majority of investors, is one of the most important decisions they will make. 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. Consult with one of investment counselors who can help build you a custom portfolio of turnkey cash flow rental properties in the various growth markets across the United States.
All you have to do is fill up this form and schedule a consultation at your convenience. We’re standing by to help you take the guesswork out of real estate investing. By researching top real estate growth markets and structuring complete turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
Other Best Places in Florida to Invest in Real Estate
We also recommend Tampa FL real estate market for turnkey rental property investing. The real estate in Tampa Florida has been estimated to grow rapidly during 2020. Investors are recommended to buy properties now and hold on to them until good price appreciation for maximum return on investment. The Tampa real estate market has been seeing constant development for the last two years, a trend that does not seem to be stopping any time soon.
Tampa has the headquarters of four Fortune 500 companies which makes it a moderately attractive city for work and economic growth. In addition to this, many entrepreneurs and small businesses are also making way to Tampa for search of better prospects and lesser expenses for running their start-ups. Acquiring residential spaces is one of earliest priorities for such professionals when they move here.
Tampa, FL has a very diverse economy with financial services, STEM, health care, research, education, tourism, beaches, and military bases all making significant contributions to jobs and growth. These all factors make Tampa housing market a hot destination for real estate investors in 2019.
You can also invest in another hot market in Ocala, Florida. Ocala is an affordable real estate market for investors who can still reap a decent return on investment. The area has recovered from the Great Recession, and a number of factors will insulate it from a future downturn. The Ocala housing market is buoyed by several nearly recession proof industries.
It is quite affordable for investors compared to the rest of Florida markets like Tampa where the median home value is $221,500. The median home price in Ocala in 2018 was around $150,000. You can buy several homes in the Ocala FL real estate market for the price you would of one mid-market condo in Miami real estate market.
Another market that we suggest is the housing market in Lakeland, Florida. The Lakeland housing market presents the perfect balance of currently affordable real estate for buyers and future growth. We can expect the population of the area to grow rapidly, and the renting population will grow even faster. The time to buy real estate in Lakeland is now.
While the Lakeland FL real estate market is cheaper than Orlando and Tampa, it is not a good overall value given the lower average wages of its residents. That explains why U.S. News and World Report gave the city an index score of 5.5 out of ten. This is due to the average resident earning around $23,000 a year, several thousand less than the U.S. average. Median household incomes are no better.
Remember, caveat emptor still applies when buying a property anywhere. The aim of this article was to educate investors who are keen to invest in Orlando 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. 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.
References:
- Market Data, Trends And Forecasts
https://www.movoto.com/orlando-fl/market-trends
https://www.zillow.com/orlando-fl/home-values
https://www.orlandorealtors.org/news/422237/ORRA-Housing-Market-Report—September-2018.htm
http://www.worldpropertyjournal.com/real-estate-news/united-states/orlando-real-estate-news/orlando-home-sales-report-2018-orra-reports-orlando-regional-realtor-association-orlando-rising-home-prices-in-2018-orlando-real-estate-news-10995.php - Foreclosures
https://www.realtytrac.com/statsandtrends/fl/orange-county/orlando - Reasons to Invest in Orlando Florida
- https://www.thebalance.com/the-best-places-to-invest-in-real-estate-4163978
http://www.noradarealestate.com/blog/best-cities-to-invest-in-real-estate-in-2018
https://www.mashvisor.com/blog/orlando-real-estate-market-new-investors
https://www.lee-associates.com/centralflorida/2018/01/15/5-reasons-to-invest-in-central-florida
https://news.orlando.org/blog/orlando-leads-nation-in-job-growth-four-years-in-a-row/
Was interested in this read until you quoted Zillow. Real estate professionals know Zillow is not the expert.
Hi Kimberly — We’re not big fans of Zillow either. But we use it as just one source from many. We actually use a propriety tool internally that is far more accurate. Thank you.