Orlando Housing Market Trends
We'll be discussing the latest Orlando real estate market trends & forecasts to find out how they can affect homebuyers and sellers in the next twelve months. Orlando is a city located in central Florida, well-known for its theme parks and tourist attractions. However, it's also home to a bustling real estate market. In February 2023, the Orlando housing market saw a significant increase in home sales and median home prices. In this blog post, we'll take a closer look at the current state of the Orlando housing market and what it means for buyers and sellers.
State of the Orlando Housing Market
According to the latest report from the Orlando Regional REALTOR® Association (ORRA), the Orlando housing market saw a 33.8% increase in home sales from January to February 2023, with a total of 2,240 sales in February. However, compared to February 2022, there was a 30.0% decrease in overall sales. Inventory also dropped from 6,115 homes in January to 5,555 homes in February. Interestingly, February 2023 inventory was 140.2% higher than February 2022, when it was recorded at only 2,313 homes.
The median home price for February was recorded at $358,000, up from $350,000 in January. This is noteworthy as it comes after three consecutive months of declining median home prices. On the downside, February's interest rate was recorded at 6.4%, up from 6.1% in January. Homes also spent an average of 62 days on the market (DOM) in February, up from 57 days in January. Compared to February 2022 when homes spent an average of 30 days on the market, this is a 106.7% increase.
In February 2023, interest rates increased to 6.4%, which is 64.5% higher than in February 2022 when interest rates were 3.9%. Pending sales increased by 21.2%, from 3,453 in January to 4,184 in February. Moreover, 22 distressed homes (bank-owned properties and short sales) accounted for 1.0% of all home sales in February. That represents a 57.1% increase from January when 14 distressed homes sold.
Orlando area inventory decreased by 9.2% from January to February, from 6,115 homes to 5,555 homes. However, inventory in February 2023 was 140.2% higher than in February 2022 when inventory reached a record low. The supply of homes decreased to 2.48 months in February, down from 3.65 months in January. A balanced market is six months of supply. The number of new listings also decreased from January to February by 3.1%, from 2,911 homes to 2,820 homes.
What Does it Mean for Buyers and Sellers?
Overall, the Orlando housing market continues to look positive as we head into the spring selling season. The significant increase in home sales and median home prices from January to February 2023 is a good sign for sellers. The rise in pending sales also indicates that there is still demand in the market. However, buyers should be aware of the increasing interest rates and longer DOM.
For buyers, the higher interest rates could mean a higher monthly mortgage payment. Hence, it's essential to stay within your budget when purchasing a home. Additionally, with homes spending an average of 62 days on the market, buyers can take their time and not rush into purchasing a home.
For sellers, the decrease in inventory and increase in pending sales means there is less competition in the market. However, with homes spending an average of 62 days on the market, sellers should still be patient and price their homes accordingly. In conclusion, the Orlando housing market is currently seeing an increase in home sales and median home prices heading into the spring buying season.
Despite interest rates increasing from January to February, the market still looks positive with pending sales and distressed home sales on the rise. Sellers may benefit from the current market conditions, as homes are spending more time on the market, giving them the opportunity to sell at higher prices. However, buyers may face more competition due to the low inventory levels, which could drive up prices even further.
It's important for buyers and sellers to work with experienced real estate agents who have a deep understanding of the local market conditions. A skilled agent can help buyers navigate the competitive market and find the right home at the right price. Sellers can benefit from an agent's expertise in pricing, marketing, and negotiating to ensure they get the best possible outcome.
Is Orlando a Buyer's or Seller's Market?
Orange County is located in the central portion of the U.S. state of Florida. As of the 2010 census, the population was 1,145,956, making it Florida's fifth-most populous county. The county seat is Orlando. Orange County is the central county of the Orlando-Kissimmee-Sanford, Florida Metropolitan Statistical Area. The following housing market trends are based on single-family, condo, and townhome properties listed for sale on realtor.com. Land, multi-unit, and other property types are excluded.
Based on the data presented, it is clear that both Orange County and Orlando are currently seller's markets in March 2023. This is due to the fact that there are more people looking to buy homes than there are available homes on the market. In Orange County, homes are selling for 1.39% below the asking price on average, while in Orlando, homes are selling for 1.38% below the asking price on average.
Additionally, the median listing home prices for both Orange County and Orlando are trending up year-over-year, indicating that demand for homes in the area is increasing. In Orange County, the median listing home price is $411.5K, while in Orlando, it is $369.9K. These prices are up 4.2% and 5.7% year-over-year, respectively.
The sale-to-list price ratio for both Orange County and Orlando is also high, at 98.61% and 98.62% respectively. This means that sellers are getting almost all of their asking price, further supporting the notion that these areas are currently seller's markets.
It is worth noting that the median days on market for both Orange County and Orlando are relatively low at 62 days. While this is an increase from last year, it is still a relatively short amount of time for homes to be on the market. This further supports the idea that there is high demand for homes in the area, and that buyers need to act quickly in order to secure a home.
Finally, it is interesting to note that there is significant variation in median listing home prices across different cities and neighborhoods within Orange County and Orlando. For example, Lake Butler is the most expensive city in Orange County with a median listing home price of $1M, while Pine Hills is the most affordable with a median listing home price of $278.9K.
In Orlando, Lake Nona South is the most expensive neighborhood with a median listing home price of $695.2K, while Rosemont is the most affordable with a median listing home price of $179.9K. This variation means that there are options for buyers with different budgets and preferences, but it also highlights the importance of working with a knowledgeable real estate agent who can help navigate the market and find the right home at the right price.
In conclusion, the Orlando housing market is currently a seller's market, with high demand and low inventory driving up home prices. While this can be challenging for buyers, there are still options available across different cities and neighborhoods. Working with a knowledgeable real estate agent can help buyers navigate the market and find the right home at the right price.
Orlando Real Estate Market Forecast 2023
Orlando's housing market will 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 real estate. What are the Orlando real estate market predictions for 2023? Let us look at the price trends recorded by Zillow over the past few years.
Since the last twelve months, Orlando's typical home values have appreciated by nearly 8.3% (Zillow Home Value Index). The typical home value of homes in Orlando is currently $361,125. It indicates that 50 percent of all housing stock in the area is worth more than $361,125 and 50 percent is worth less (adjusting for seasonal fluctuations).
Orlando is a seller’s real estate market. There exists a limited supply of homes in Orlando, and buyers are forced to compete often resulting in higher prices and/or quicker sales that tend to benefit sellers. NeighborhoodScout.com's data also shows that Orlando real estate appreciated 186.52% over the last ten years. Its annual appreciation rate has been averaging 11.10% — more than the national average. This figure puts Orlando in the top 10% nationally for real estate appreciation.
Here is the latest housing forecast for Orlando and Orlando MSA until Feb 2024. Orlando is the hub city of the Orlando-Kissimmee, Florida, Metropolitan Statistical Area, colloquially known as “Greater Orlando” or “Metro Orlando”. The area encompasses four counties (Orange, Osceola, Seminole, and Lake), and is the 26th-largest metro area in the United States.
- The typical value of homes in Orlando-Kissimmee-Sanford Metro is $376,888
- Orlando-Kissimmee-Sanford Metro home values have gone up 9.4% over the past year
- Zillow predicts they will rise by 0.4% between Feb 2023 and Feb 2024.
Orlando Real Estate Investment: Should You Invest in Orlando?
Is Orlando a Good Place Real Estate Investment? Many real estate investors have asked themselves if buying rental property in Orlando is a 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 2023 forecast for answers on why to put resources into this market.
Let’s talk a bit about Orlando and the surrounding metro area before we discuss what lies ahead for investors and homebuyers. The City of Orlando is nicknamed “the City Beautiful and is one of the most-visited cities in the world primarily driven by tourism, major events, and convention traffic.
Orlando's 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. 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.
Top Reasons To Invest In The Orlando Real Estate Market
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.
Increasing Foreign Investment in Orland0
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.
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 major population growth. During the last 3 years, the population in Orlando has been growing at a 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. Another reason for the growing economy and population expansion in Orlando, Florida, is the developed transportation infrastructure which makes traveling between destinations more convenient. Generally, Florida has an efficient transportation network that complements its tourism growth as well.
Orlando's Increasing Job Opportunities
While improving the Orlando real estate market and flourishing tourism is 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 a better economy for the city. 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 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 area 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.
Orlando's Rental Market
Thanks to a strong economy, Orlando's rental market continues to boom. It is consistently named as one of the best rental markets in the nation and the #1 place in Florida to buy a 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. Around 46% of the households in Orlando, FL are renter-occupied.
Current Rental Market Trends
The average size for an Orlando, FL apartment is 962 square feet with studio apartments being the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage. About 60% of the apartments can be rented for $1,500/mo or less. 26% of the apartments fall in the price range of $1,501-$2,000, and only 8% are as expensive as $2,000/mo.
As of April 2023, the average rent for a 1-bedroom apartment in Orlando, FL is currently $1,645. This is a 1% decrease compared to the previous year. Over the past month, the average rent for a studio apartment in Orlando increased by 2% to $1,729. The average rent for a 1-bedroom apartment remained flat, and the average rent for a 2-bedroom apartment decreased by -2% to $1,917.
- Two-bedroom apartment rents average $1,917 (a 2% decrease from last year).
- Three-bedroom apartment rents average $2,340 (a 1% increase from last year).
- Four-bedroom apartment rents average $2,695 (a 4% increase from last year).
Flexible Tax Laws
Investing in Orlando's 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 a booming economy. Tax laws in Florida are considered to be the 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. 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.
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 some 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 attract thousands of tourists every year.
Maybe you have done a bit of real estate investing in Florida 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. Speaking about Orlando's 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.
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 the best investment property in Orlando in a growing neighborhood would be key to your success. 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 of 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 for 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.
Here are the ten neighborhoods in Orlando having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.
- Baldwin Park East
- Lake Fredrica North
- Baldwin Park
- Azalea Park South
- Southport / Lake Nona Estates
- Engelwood Park North
- Monterey / Dover Shores East
- Fox Hunt Lanes
- University Estates
Florida is a great place to invest in real estate with several affordable and growing markets. The state will continue growing by more than 300,000 people a year and will top 22 million residents in 2022, according to a report posted online by state economists. That's equal to adding a city slightly larger than Orlando every year. The report estimated the population on April 1, 2018, at 20.84 million, with it increasing to 21.2 million on April 1, 2019. It is forecast to hit 22.2 million as of April 1, 2022, and be at 22.8 million on April 1, 2024. The population increases will primarily stem from “net migration” as people move into the state, rather than births, which are largely offset by deaths.
Several Fortune 500 corporations call Florida home including World Fuel Services, Publix Super Markets, Auto Nation, Office Depot, Hertz, Fidelity National Financial, and Lennar Corp. With a diverse collection of industries supporting Florida’s economy, it further strengthens the drive for workers to want to live and work here. Those factors in turn create a strong demand for rental properties and increasing rental rates.
While there are investment opportunities in the Florida housing market, major metros are some of the most popular choices, like Jacksonville, Orlando, Miami, St. Petersburg, and Tampa. 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 their way to Tampa for the search for better prospects and lesser expenses for running their start-ups. Acquiring residential spaces is one of the 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 factors make the 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 several factors will insulate it from a future downturn. The Ocala housing market is buoyed by several near 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 the 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.
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 areas, such as changes in market conditions, market forecasts, consumer attitudes, best locations, timing, and interest rates.
NORADA REAL ESTATE INVESTMENTS has extensive experience investing in turnkey real estate and cash-flow properties. We strive to set the standard for our industry and inspire others by raising the bar on providing exceptional real estate investment opportunities in many other growth markets in the United States. We can help you succeed by minimizing risk and maximizing the profitability of your investment property in Orlando.
Consult with one of the investment counselors who can help build you a custom portfolio of Orlando turnkey properties. These are “Cash-Flow Rental Properties” located in some of the best neighborhoods of Orlando.
Not just limited to Orlando or Florida but you can also invest in some of the best real estate markets in 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 and structuring complete Orlando turnkey real estate investments, we help you succeed by minimizing risk and maximizing profitability.
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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, Norada Real Estate Investments makes no claims or assertions about the future housing market conditions across the US.
Market Prices, Trends & Forecasts
Reasons to Invest in Orlando Florida