Central Floridians looking to sell their homes have been very fortunate as of late, enjoying positive market conditions for several years now.
Central Floridians looking to sell their homes have been very fortunate as of late, enjoying positive market conditions for several years now. Inventory continues to dip, which drives demand up. Interest rates are historically low overall, and median prices continue to rise.
According to the National Association of Realtors’ 2017 Q2 Housing Opportunities and Market Experience survey released June 2017, 71% of those surveyed believe now is a good time to sell. The Pending Home Sales Index, another report compiled by NAR shows that contract signings are on the rise as well, up 1.5% from May to June, despite a decrease in inventory of 7.1% nationwide from last year.
Locally, we have a 2.4-month supply of available homes with 9,141 homes for sale as of the end of June. That represents a decrease of 14% from 2016 in The City Beautiful, and buyers are feeling it. The shrinking supply is putting some buyers on edge, making them wonder if they can afford the home of their dreams. For others, the current conditions are spurring them into action.
Orlando saw an increase of 27.5% in new contracts year-over-year and 10% more listings. Once listed, homes survive an average of 55 days on the market versus 67 days in June 2015 and 62 days in June 2016. Overall, 2017 means more contracts in faster time and with fewer homes from which to choose.
Although sellers remain enthusiastic, some wonder how long we can keep this momentum going. Some agents I encounter think we have passed top of market conditions for the next while, and sellers are smart to sell while the selling is good. I agree — but only to a small extent. As I see it, Orlando and Greater Orlando are like most of the nation in terms of housing supply and demand — more buyers than sellers. And Orlando continues to rank highly among foreign nationals looking to buy homes in America.
Canadian investors ramped up their U.S. real-estate purchases from $11.2 billion in 2015 to $19 billion in 2016, and half of that was in Florida, California and Texas. It would appear that demand locally and internationally is on trend to remain robust. For many Canadians, a home here in Florida is simply more affordable than in many cities such as Toronto and Vancouver.
But what about would be first-time buyers and local renters? Will making the transition to homeownership remain affordable and attainable? Thirty percent surveyed by NAR in the HOME report felt it was not a good time to buy a home. Although they are the minority, with the remaining 70% saying it is a good time to buy and 41% feeling strongly it’s a great time to be a homebuyer, those with concerns do exist.
Among the less confident were buyers living in urban areas, currently renting and or under age 34. These facts are not surprising, with rents rising steadily the past few years and wages not keeping pace in some industries. It can be harder for someone younger renting in downtown Orlando to save money for a down payment and closing costs without a high-paying job.
But new homebuilders and banks are doing their best to bridge the gap for those first-timers or just buyers looking to own a home close to work in the city or at the parks. Both Central Florida Educators Federal Credit Union and Fairwinds CU are rolling out new programs designed to be more flexible and supportive of first-time homebuyers, and many traditional lenders are doing the same.
If a buyer can tolerate a longer commute, traveling north and west on Interstate 4 just outside of Orlando cities such as Deland and St. Cloud offer more bang for their buck with new construction options. Possibilities do exist even if buyers have to cast a wider net to find them. If a buyer is set on owning in urban areas such as downtown Orlando but on a budget, condos, townhomes and duplexes are good options. Most homeowners associations have been able to get their reserves back up and their finances in order since the market crash. And multifamily housing can offer investors a bright spot too, especially with owner occupants willing to pay full market value.
It is true that for some, and in some parts of Orlando, the dream of home ownership is more challenging to obtain now. Short supply, rising rents and relentless demand all play their part. However there are methods for buyers to achieve this dream of buying a home, even if it may take some creative thinking and more proactive saving.
Sellers can expect fair market value but would do well to avoid overpricing and becoming unaffordable or undesirable to buyers. Just because it’s a sellers market doesn’t mean buyers will overpay.
Christina Rordam is a local Realtor with 12 years experience and a member of ORRAs Top Producer Club. For more, visit christinasellsorlando.com.