Orlando Real Estate Market: Prices, Trends, Forecast 2022-2023

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. The median home price for September 2022 was recorded at $365,000, a decrease of 3.4% compared to August’s median home price, $377,750. This is the third month in a row that the median home price has fallen. Overall sales in September dropped by 18.3% for a total of 2,717 sales compared to 3,324 sales in August.

Inventory rose 1.8% in September, from 6,762 to 6,884. This is the fifth straight month of inventory increases, according to the latest report from the Orlando Regional REALTOR® Association (ORRA). Homes spent an average of 31 days on the market in September, jumping 14.8% from August when the average was 27 days. New listings decreased by 27.1% from August to September, with 3,318 new homes on the market in September.

Overall State of the Orlando Housing Market: “We are starting to feel the impacts of rising interest rates on the Orlando housing market as they have more than doubled over the past 12 months,” said Tansey Soderstrom, Orlando Regional REALTOR® Association President. “Rising interest rates are causing buyers to be more cautious, resulting in fewer Orlando home sales for the month of September. This cooling off in sales does have an upside for buyers, as they now have the luxury of being more patient when looking for a home.”

According to the national real estate brokerage, Redfin, the Orlando City housing market is very competitive. In September 2022, Orlando home prices were up 15.3% compared to last year, selling for a median price of $361K. On average, homes in Orlando sell after 20 days on the market compared to 13 days last year. There were 826 homes sold in September this year, down from 1,316 last year.

• Sale-to-List Price was 98%
• Homes Sold Above List Price = 21.7%
• Homes with Price Drops = 35.2%
• Many homes get multiple offers, some with waived contingencies.
• The average homes sell for about 2% above the list price and go pending in around 17 days.
• Hot homes can sell for around the list price and go pending in around 6 days.

According to last month's data, Orange County is a seller's market, which means that more people are looking to buy than there are homes available. Hence, the prices are expected to rise.

• In October 2022, the median listing home price in Orange County, FL was $430K, trending up 17.8% year-over-year.
• The median listing home price per square foot is $237.
• The median sold price was $393.5K.
• Sale-to-List Price Ratio: 98.4% — a seller would always prefer scenarios that can yield a ratio of 100% or higher while a buyer would prefer a sale-to-ask price ratio that’s closer to 90%.
• There are 50 cities in Orange County, Florida.
• Lake Butler has a median listing home price of $1.3M, making it the most expensive city.
• Lockhart is the most affordable city, with a median listing home price of $278.3K.
• The median listing home price in Orlando City was $390K, trending up 16.4% year-over-year.
• The median listing home price per square foot is $233.
• The median home sold price is $369K.
• Orlando is also a seller's market, which means that there are more people looking to buy than there are homes available.
• Lake Nona South has a median listing home price of $793.7K, making it the most expensive neighborhood.
• South Semoran is the most affordable neighborhood, with a median listing home price of $174.9K.

Below is the latest housing market data for the Orlando Area released by the Orlando Regional REALTOR® Association (ORRA).

Is Now a Good Time to Buy a House in Orange County, FL?

As interest rates continue to increase, this might imply that the Orlando real estate market is beginning to cool. As a result of increased interest rates, it will be more difficult for some purchasers to make their monthly mortgage payments. Nonetheless, demand is robust, and properties continue to sell rapidly.

Inventory in the Orlando MSA increased by 1.8% from August to September from 6,762 homes to 6,884 homes. Inventory in September 2022 was 87.9% higher than in September 2021, when it was recorded at 3,664 homes. The number of new listings decreased in September from August by 27.1% down to 3,318 homes and the supply of homes increased to 2.53 months.

Housing economists generally consider a five to six-month supply to indicate a healthy market that is balanced between buyers and sellers. Less than that is considered a seller’s market. This shows that Orlando is a seller's real estate market having low inventory combined with lots of buyers looking for properties. A hot market would lead to a faster sale at or above the asking price. Although buying a home in a strong seller’s market can be difficult, it’s still possible to secure a deal.

Composite Homebuyers Affordability Index based on 20% down 80% Loan to Value Ratio – U.S. Housing & Urban Development

• Interest rate: 6.32% (Sept 2022)
• Median Price: $365,000 (Sept 2022)
• Down Payment: $73,000
• Mortgage Amount: $292,000
• Monthly Payment: $1,811.40
• Income to Qualify: $86,947
• Median Income: $61,484
• Affordability Index: 70.71%

Orlando Median Home Sales Price

September's median home price was recorded at $365,000, a decrease of 3.4% compared to August’s median home price, $377,750. This is the third month in a row that the median home price has fallen. according to the Orlando Regional Realtor® Association. However, low inventory coupled with high demand continues to drive up home prices on a year-over-year basis.

Housing Sales Year-Over-Year Comparison

ORRA's latest report shows the number of pending home sales decreased by 26.8 percent YTY in Sept 2022. The number of new homes listed for sale decreased by 17.6% year-over-year. A total of 2,717 properties were sold in Sept, accounting for a -28.3% decrease over Sept 2021, when 3,789 homes were sold.

• 12 distressed homes (bank-owned properties and short sales) accounted for 0.4% of all home sales in September.
• That represents a 100% increase from August when 6 distressed homes sold.

Note: ORRA REALTOR® sales represent sales involving Orlando Regional REALTOR® Association members, who are primarily – but not exclusively – located in Orange and Seminole counties.

Orlando Real Estate Market Forecast 2022 – 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 2022 – 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 25.8% (Zillow Home Value Index). For your information, ZHVI is a seasonally adjusted measure of the typical home value and market changes across a given region and housing type. It reflects the typical value for homes in the 35th to 65th percentile range.

ZHVI represents the whole housing stock and not just the homes that list or sell in a given month. The typical home value of homes in Orlando is currently $387,298. It indicates that 50 percent of all housing stock in the area is worth more than $387,298 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 176.36% over the last ten years.

Its annual appreciation rate has been averaging 10.70% — more than the national average. This figure puts Orlando in the top 10% nationally for real estate appreciation. During the twelve months, from 2021 Q2 – 2022 Q2, the Orlando appreciation rate was nearly 22.50%. Between the first two quarters of 2022, the appreciation rate was nearly 5.59%, which annualizes to a rate of 24.30%.

Here is the latest housing forecast for Orlando and Orlando MSA until Sept 2023. 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 $401,894
• Orlando-Kissimmee-Sanford Metro home values have gone up 27% over the past year
• Zillow predicts they will rise by 3% between Sept 2022 to Sept 2023.

These numbers can be positive or negative depending on which side of the fence you are — Buyer or Seller?  What does it mean for homebuyers in Orlando? The biggest mistake buyers make is sitting around waiting for sale prices to decline while their potential mortgage payment plummets. Mortgage rates are rising in 2022. This is the time for buyers to take advantage before they rise more in 2023. Properties purchased today are expected to continue appreciating over the next 12 months.

In conclusion, we can say that Orlando and the entire metro area market is so hot that it cannot shift to a complete buyer’s real estate market, for the long term. In a balanced real estate market, it would take about five to six months for the supply to dwindle to zero. In terms of months of supply, Orlando can become a buyer’s real estate market if the supply increases to more than five months of inventory. And that’s unlikely to going to happen in the near future, at least.

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 2022 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. Compared to other cities with competitive real estate markets, investing in Orlando real estate makes more sense since it has experienced a 14.6% increase in the median home price (all residential) since November 2019.

Not to mention, the Orlando region is booming in terms of both population and jobs. From the years 2016-2019, Orlando achieved an 11% growth rate, according to the Orlando Business Journal. According to Orlando Weekly, the Central Florida region will have 5.2 million people calling the area home.

The city is ranked #3 on the AdvisorSmiths report analyzing the best cities with job growth. There is a great demand for rental properties due to the high proportion of renters (65.29%). Moreover, Orlando's real estate prices remain highly affordable with a median value of $275,000 (as of Nov 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's real estate market ranked high in the “Top 10 best cities for first-time homebuyers.” Compared to saturation in similar markets in other cities like New York, Orlando has all the indicators of flourishing growth in the coming years.

Top Reasons To Invest In The Orlando Real Estate Market

Orlando is a beautiful city to live in having more than 100 lakes. The city is nicknamed “the City Beautiful.” Also, nicknamed the ‘Theme Park Capital of the World.” Ranked #2 In America's Fastest-Growing Cities – Forbes. The Orlando area is home to Walt Disney World, Universal Orlando, and many others. The City has over 100 parks and 21 community centers offering athletics, camps, and social programs. It is the center of the Orlando metropolitan area, with a population of about 2.5 million. These figures make it the 23rd-largest metropolitan area. Orlando's real estate has been one of the best long-term investments throughout the last decade. Strong renter's market. Over 60% of the population rents. Strong economic and job growth. Orlando is a major industrial and hi-tech center employing thousands of people. More than 150 international companies, representing approximately 20 countries, have facilities in Metro Orlando. One of the main driving forces in Orlando's economy is its tourism industry. It is one of the most visited cities in the world primarily driven by tourism, major events, and convention traffic. The city drew more than 75 million visitors in 2018. It was listed as a “Gamma−” level global city in the World Cities Study Group's inventory.

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 November 06, 2022, the average rent for a 1-bedroom apartment in Orlando, FL is currently $1,680. This is a 2% increase compared to the previous year. Over the past month, the average rent for a studio apartment in Orlando decreased by -5% to $1,734. The average rent for a 1-bedroom apartment increased by 5% to $1,680, and the average rent for a 2-bedroom apartment increased by 1% to $1,921.

• Two-bedroom apartment rents average $1,921 (a 3% decrease from last year).
• Three-bedroom apartment rents average $2,300 (a 5% increase from last year).
• Four-bedroom apartment rents average $2,695 (a 9% 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.

1. Baldwin Park East
2. Lake Fredrica North
3. Baldwin Park
4. Azalea Park South
5. Southport / Lake Nona Estates
6. Countryside
7. Engelwood Park North
8. Monterey / Dover Shores East
9. Fox Hunt Lanes
10. 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.

Let us know which real estate markets in the United States you consider best for real estate investing!

---

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.

REFERENCES

Market Prices, Trends & Forecasts
https://www.orlandorealtors.org/marketreports
https://www.orlandorealtors.org/housingmarketnarrative
https://www.zillow.com/orlando-fl/home-values
https://www.redfin.com/city/13655/FL/Orlando/housing-market
https://www.neighborhoodscout.com/fl/orlando/real-estate
https://www.realtor.com/realestateandhomes-search/Orlando_FL/overview

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/