Local real-estate experts offered their predictions for the 2019 housing market in West Orange based on 2018’s trends.
Although the Orange County real-estate market experienced a slight cooling in 2018 compared to the red-hot environment of 2015 through 2017, local experts agree the area will continue to enjoy a healthy market in 2019.
Jeffrey Fagan, president of the Orlando Regional REALTOR Association, predicts an increase in housing inventory with new construction becoming available; an increase — and then leveling out — of home prices; and a likely increase in interest rates depending on the Federal Reserve.
Fagan said those factors could lead to an overall more balanced market.
“2018 has been a good year,” he said. “Albeit, it has slowed down a little bit compared to what we were experiencing in 2015 through 2017. It slowed down a bit this year, but we have pockets in the county that increased, and other areas that slowed down.
“Overall, Orange County came down about 3% compared to what it had been at the same point in time in 2017,” Fagan said. “But that’s not a bad thing, because it needed to slow down a little bit. Prices were gaining a little bit too fast, and for long-term sustainable growth, you need a bit of a balance. If it rises too fast, you end up getting too much price appreciation, but you certainly don’t want it going too far down either. So we’re coming more into a balanced position in our real-estate market.”
Veteran West Orange real-estate agent Suzi Karr agrees.
“If this month (December) is any indication, I would say 2019 is going to be dynamite,” Karr said. “I fully expect we’re going to see a whole lot going on. We’ve been seeing a lot of foreign buyers coming in and paying cash. But I think everything is stabilizing. The economy is good, and that helps a lot. And, of course, interest rates were going up, but they may come down a little bit and then level out, depending on a lot of factors. But the country is in a pretty good position right now. We can never predict what will happen with home prices too accurately, but I don’t think we’re going to see them go down; I hope not. I think they will go up and then level out, according to availability.”
WEST ORANGE AMENITIES
In West Orange, high demand and the area’s unique amenities will continue to make it a popular place for families.
“We offer so much in Orange County,” Karr said. “Horizon West is doing really well, and Winter Garden is phenomenal. Their downtown is great. A lot of people are moving there — including people from Windermere — to be close to the West Orange Trail and downtown. And of course, you have the 12 lakes joined by canals — you can’t beat that. And old Windermere, just as it is, is beautiful.”
“People want to live in areas that have strong schools and are in aesthetically pleasing areas close to transportation and jobs,” he said. “The West Orange area checks off a lot of those boxes. Winter Garden is probably one of the fastest-growing areas in Orange County. A community that only had a few sales and all of a sudden had 10 sales will see a significant increase in percentage growth. And Winter Garden is near the top five in the county.”
However, the news isn’t all positive. Finding affordable housing in Orange County will remain difficult.
Although the new construction coming online will increase inventory, it won’t be at a price some buyers can afford.
“We don’t have a lot of builders that are building lower-priced homes right now,” Fagan said. “The challenge with new construction, typically, is the price point. Because of the costs for labor, materials and even permitting, the entry-level price point for new construction is a little more than would be ideal. So first-time homebuyers are having a bit of a challenge finding new housing because of low inventory, lack of builder inventory and high demand that prices homes outside of their budget.”
Realtor Christina Rordam noted any increase in interest rates also will make it harder for first-time buyers to afford a home.
“I cannot say how high rates will climb in 2019,” she said. “However, they will rise, and in doing so, will cause mortgage payments to increase. … Although I see many new home developments coming up, I do not see many in what would be an entry-level price range based on Orlando-area incomes, leaving first-time buyers most vulnerable.”
“I think it’s inevitable that mortgage rates are going to have to go up,” Fagan said. “The federal government was artificially depressing interest rates for a while to stimulate the economy. That said, it does need to come into more normal ranges. I should say, though, that even at 6% or 7% — even if that seems terrible to people — that really is a normal interest rate. We had artificially low interest rates for a decade.
“And now, necessarily, interest rates will have to go back up, but it’s going to take people a bit of time to get used to that, because it does decrease your purchasing power,” he said. “But, back in the day, interest rates were as high as 18 or 19% and people still bought houses. Of course, I’d never want to see that again, but it’s still going to have to normalize a bit. And I think we will see it go up a bit in 2019.”
To compound the problem, rental rates also are rising.
“The rental markets are very strong, and that is a concern because rental rates are going up, but vacancy rates are down,” Fagan said. “I heard (Orange County Mayor) Jerry Demings talking about affordable housing. And that is something that should be high on the priority list going into 2019. We’re actually working with communities, Florida Realtors and with the Orlando Regional REALTOR Association to address affordable housing in Tallahassee, because we absolutely need some assistance.”