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Orlando Home Sales Have 25% Spike in October

Orlando home sales have 25% spike in October; buyers ‘shocked at how fast things are getting snapped up’

For Hannah Young, listing her house on Halloween proved not to be scary at all.

“By Tuesday, we had 10 showings,” the Winter Park resident said. Before the week was done, she was under contract for her full asking price of $289,000.

Her search for a new home to accommodate her expanding family is more challenging.

“We were just shocked at how fast things are getting snatched up,” said Young, 25. “It’s definitely tough waters to navigate when you’re trying to buy.”

In October, Orlando home sales spiked 25% over the same time last year, according to the latest report from the Orlando Regional Realtor Association released Monday. Tight inventory and buyers returning to the market who were hesitant after the start of the pandemic means home prices in Central Florida are expected to remain strong.

“We’re seeing what we’ve been seeing,” ORRA president Reese Stewart said. “Inventory’s tight, but that’s been a broken record for how many months now.”

The median home price for single-family homes in the region is $290,000, 10% higher than October last year, but down $5,500 from September. Stewart said it’s unlikely that the slight drop is the start of a trend.

“One month really isn’t going to predict anything,” he said.

Other factors point to Orlando real estate remaining a seller’s market in the coming months. Total inventory is down 20% year-over-year. ORRA estimates it would take under a month to sell all homes below $300,000 in the area. Housing economists consider a six-month supply to be a more balanced ratio between home buyers and sellers.

“They’re benefiting from the lack of listings,” said Jeff Tucker, senior economist at Zillow.com. “That gives buyers fewer options and it means sellers face less competition from each other.”

Several factors are driving down the inventory, according to Tucker. “The pandemic had a noticeable effect,” Tucker said. For example, people who would have sold their homes to move into nursing homes have been hesitant to make those transitions while COVID-19 numbers remain high.

Unemployment also played a role, with some homeowners going into forbearance and unable to qualify for new mortgages, Tucker said. Central Florida’s unemployment rate remains around 10% with steep cuts to jobs in the tourism industry.

Tucker also notes that the measures to combat the effects of the pandemic on the economy have also spurred some new buyers. “One thing that is motivating buyers, especially first-time home buyers, are these record-low lending rates,” he said.

Currently, a 30-year fixed loan can be obtained for 3% or even less. But much of this started before the pandemic. Tucker points to a lack of home building in the years since the 2008 recession, keeping supply low. Then there’s the “big wave” Tucker sees of people between ages 26 and 35 getting ready to buy their first homes.

“That’s an extra few million people currently moving,” he said. “That source of demand is so robust, I wouldn’t see that as a bubble.”

Orlando ranks 35th out of the top 50 metro areas for home appreciation. In September, more than one in five homes sold for above their list price across the country. But Stewart still sees plenty of signs that people are flocking here.

“We’re a destination city,” he said. “People like Central Florida.”

Stewart said prospective home buyers such as Young need to make sure they have their finances in order when they go out to buy in order to avoid getting scooped.

“Prepare,” he said. “When they’re out looking at homes, they need to be ready to put an offer right in.”

Young keeps looking and has already sacrificed some things from her wish list.

“We wanted a pool, but it looks like we’ll probably have to find something and put a pool in,” she said.

She said she doesn’t believe the homes she’s looking at are overvalued, but competing with all the other buyers is the real challenge.

“I think the prices are fair, but as a buyer, you need to go in with your A-game,” she said.

 

Source: “Orlando real estate a seller’s market,” Orlando Sentinel