Orlando Housing Market Forecast 2025-2026: Will Prices Fall?

Are you thinking about buying or selling a home in Orlando? Then it's essential to understand the current Orlando housing market trends. The Orlando market is showing some interesting shifts. Inventory is up, median prices are slightly down month-over-month, and new listings are surging. This means that buyers are beginning to have a little more power.

The market is constantly evolving, and staying informed is crucial whether you're a first-time homebuyer, a seasoned investor, or just curious about the real estate scene in Central Florida. Let's dive into a detailed analysis of what's happening in the Orlando housing market right now.

Current Orlando Housing Market Trends:

Home Sales

Looking at the latest data, home sales in Orlando experienced a notable dip from December to January. There were 1,514 sales in January, compared to 2,154 sales in December. That's a drop of 29.7%, according to the Orlando Regional Realtor® Association.

This decline isn't necessarily a cause for alarm. Historically, January tends to be a slower month for real estate transactions following the holiday season. Many people are focused on other priorities during the holidays and often wait until the new year to actively pursue home buying or selling.

Home Prices

One of the biggest questions on everyone's mind is, “What's happening with home prices?” In January 2025, the median home price in Orlando was recorded at $375,000. This is a slight decrease from the $380,000 recorded in December.

While a $5,000 drop might not seem like a lot, it’s important to view it within the broader context of the market. It suggests that the rapid price appreciation we saw in previous years is starting to cool off.

Are Home Prices Dropping?

It's too early to definitively say that home prices are dropping significantly in Orlando. A single month's data doesn't establish a trend. However, the slight decrease in the median home price combined with the increased inventory suggests that the market is becoming more balanced.

We’re not seeing a crash, but a correction. A move towards a more balanced market after the heated pandemic-era boom is a good thing, preventing another bubble.

Comparison with Current National Median Price

How does Orlando stack up against the national median home price? As of January 2025, the national median home price is $396,900, according to recent data. This represents a +4.8% year-over-year change.

• Orlando's median home price of $375,000 is lower than the national median. This can make Orlando an attractive option for buyers moving from more expensive areas of the country.

Here's a quick comparison table:

Metric	Orlando (January 2025)	National (January 2025)
Median Home Price	$375,000	$396,900
Year-over-Year Change	–	+4.8%

Housing Supply

Here’s where things get interesting. The housing supply in Orlando has seen a significant increase. Inventory for January was recorded at 11,697 units, which is up 16.4% from the 10,049 units in December. This is the highest inventory level since July 2015!

This surge in inventory is great news for buyers who have been frustrated by the lack of options in recent years. More choices mean more negotiating power and potentially less competition for each property.

• New Listings: New listings spiked by an impressive 68.1% from December to January, with 4,220 new homes hitting the market compared to 2,510.
• Months of Supply: The supply of homes rose to 7.73 months in January, up a whopping 65.5% from 4.67 months in December.

Is It a Buyer's or Seller's Housing Market?

A balanced market is generally considered to have around six months of supply. With Orlando now at 7.73 months of supply, the market is leaning towards being a buyer's market. While not overwhelmingly in favor of buyers, it certainly shifts the balance of power compared to the seller-dominated market we've seen in recent years.

Sellers need to be more competitive, offering attractive terms and ensuring their homes are in top condition. Buyers, on the other hand, have more time to consider their options, negotiate prices, and conduct thorough inspections.

Market Trends

Let's recap some key trends observed in the Orlando housing market:

• Increased Inventory: The most significant trend is the substantial increase in the number of homes available for sale.
• Slight Price Correction: A small decrease in the median home price suggests a cooling off of the rapid price appreciation.
• Rising Interest Rates: Interest rates have been trending upwards, influencing affordability and buyer behavior.
• Increased Time on Market: Homes are taking longer to sell, indicating less urgency among buyers. The average was 74 days on the market in January, up from 68 in December.
• Surge in New Listings: A significant increase in new listings provides buyers with more options.
• Pending Sales Rose: Pending sales rose 24.8%, with 2,661 in December and 3,320 in January.

These trends collectively paint a picture of a market that is transitioning towards greater balance, offering more opportunities and choices for buyers.

Impact of High Mortgage Rates

Mortgage rates play a huge role in the housing market, and Orlando is no exception. As of early March 2025, the average 30-year fixed mortgage rate is around 6.63%, according to Freddie Mac's Primary Mortgage Market Survey®. Most forecasts predict it to remain at or slightly above this level for the near future.

Impact of high mortgage rates include: Decreasing home affordability, Reduced home buying activity, and Moderating Home prices

Here's what higher mortgage rates mean for both buyers and sellers:

• For Buyers: Higher rates increase the overall cost of buying a home, making it more expensive to finance a mortgage. This can reduce the number of qualified buyers and put downward pressure on home prices.
• For Sellers: Sellers need to be realistic about pricing their homes in a higher interest rate environment. Overpriced homes are likely to sit on the market for longer, potentially leading to price reductions.

Additional Market Insights

Here is some more in depth information for the Orlando Market,

• Distressed Homes: 18 distressed homes (bank-owned properties and short sales) accounted for 1.2% of all home sales in January. This is a 5.9% increase from December, when 17 distressed homes sold. This remains a very small part of the overall market, but it's something to keep an eye on. If distressed sales start to rise significantly, it could indicate broader economic challenges.
• Lawrence Bellido, president of the Orlando Regional REALTOR® Association stated that “Sales slowed in January coming off of the holidays, which is typical for this time of year. More notably, though, new listings and pending sales rose as people kicked off the year by entering the market,”

My Thoughts

As someone who has been following the Orlando real estate market closely for years, I believe we're entering a period of greater opportunity for buyers. The increased inventory and slight price correction are creating a more level playing field.

Here are my recommendations:

• For Buyers: Don't rush into a purchase. Take your time to explore your options, negotiate prices, and get a thorough home inspection. Work with a knowledgeable real estate agent who can guide you through the process.
• For Sellers: Be realistic about pricing your home. Work with your agent to conduct a comparative market analysis (CMA) to determine the fair market value of your property. Consider making necessary repairs and improvements to make your home more attractive to buyers.
• For Everyone: Stay informed about market trends and consult with real estate professionals to make informed decisions.

I have seen all the ups and downs, and now is a great time to get back into the market!

Orlando Housing Market Forecast: What's Next for Home Prices?

You're probably wondering what the future holds for the Orlando housing market. Well, here's the short answer: experts predict a modest increase in home values over the next year. Specifically, Zillow forecasts a 1.5% rise in home values in the Orlando-Kissimmee-Sanford metro area between January 2025 and January 2026. So, if you were wondering, “will home prices drop in Orlando?”, it looks unlikely.

I've been watching the real estate market closely for years, and while predictions aren't guarantees, this forecast gives us a good idea of where things might be headed. Let's dive into the details.

As of now, the average home value in the Orlando-Kissimmee-Sanford area sits around $389,268. It's been a bit of a rollercoaster, with a slight decrease of 0.1% over the past year. Homes are moving at a decent pace, typically going to pending in about 45 days. This indicates a market that's neither blazing hot nor ice-cold.

Digging into the Home Price Forecast

Zillow's data provides a more granular view of the expected changes:

Timeframe	Projected Change in Home Values
February 2025	0%
April 2025	0.2%
January 2025 – January 2026	1.5%

This suggests that we might see a period of relatively stable prices in the short term (February and April 2025), followed by a gradual upward trend over the next year.

Orlando vs. Other Florida Markets

How does Orlando's forecast stack up against other major Florida metro areas? Here's a comparison:

Metro Area	Projected Change (Jan 2025 – Jan 2026)
Miami	2.5%
Tampa	1.9%
Orlando	1.5%
Lakeland	1.6%
Jacksonville	1.3%
Deltona	0.9%
Cape Coral	0.9%
North Port	0.8%

As you can see, while Orlando is expected to see growth, it's slightly less than Miami and Tampa. This could be due to a variety of factors, including differences in job growth, population migration, and housing supply.

Will the Orlando Housing Market Crash?

I don't foresee a housing market crash in Orlando. While anything is possible, the current data suggests a period of moderate growth. The projected increase isn't astronomical, indicating a more sustainable and balanced market.

My Thoughts and What to Watch For

Several factors will influence the Orlando housing market in the coming months:

• Interest Rates: Changes in mortgage rates can significantly impact buyer affordability and demand.
• Job Growth: Orlando's economy, particularly in tourism and technology, will play a crucial role. Strong job growth usually leads to increased housing demand.
• Inventory Levels: The number of homes available for sale will affect price appreciation. A shortage of homes could drive prices up.

Looking Ahead to 2026

Predicting beyond a year is always tricky, but if the current trends continue, I expect the Orlando housing market to maintain a steady, albeit modest, growth trajectory into 2026. I anticipate that home values will continue to appreciate as new residents flock to the area.

Disclaimer: I am not a financial advisor, and this is not financial advice. Real estate is hyper-local, and many factors could affect the real estate market. Consult with a qualified professional before making any real estate decisions.