Christina Rordam: The state of real estate in 2016

Home prices are up and have been steadily rising for many months now. There’s no denying that the housing market in Orlando and the surrounding areas has come alive again.

If you are a homeowner you can (most likely) finally exhale and take a look at your neighborhood sales again without wanting to crawl into the fetal position on the floor and cry. OK, that’s a bit dramatic for most, but some of you can relate! Home values took a tumble starting in 2007 and finally came to a resting point around 2011 for most Orlando area neighborhoods. Unfortunately the glut of distressed homes persisted even after 2011, with some short sales and foreclosures cropping up to this day. Distressed homes can be great for some buyers and particularly investors if they are truly distressed enough. Let’s face it though; nobody wants to look across the street at what was once a nice yard but has now evolved into a facsimile of the Amazonian jungle!

So what exactly is the current state of the market in Orlando, Winter Park, Maitland and the surrounding towns like Lake Mary, Longwood, Dr. Phillips and Windermere? What can greater Orlando homebuyers and sellers expect this spring and for the rest of the year? Here are some stats and a few trends to watch for.

Median sales price is up. Median price of existing homes is now $182,000 as of November 2015. It’s up 10 percent over the same time in 2014 when the median sales price was $165,000.

Sales slowed but traditional sales are increasing. While the number of sales took a slight dip in November, 77 percent of all homes sold in the greater Orlando area were traditional i.e. person-to-person or family-to-family versus short sales or REOs. The amount of homes sold was down 2 percent in November 2015 year-to-year. Slightly fewer homes sold but more regular sales.

Decrease in inventory. Available homes for sale dropped 6 percent below November 2014 to 11,300.

More on this trend: normal or traditional home inventory dropped 5 percent while foreclosures decreased 39 percent and short sales decreased 45 percent. With fewer distressed homes to contend with traditional home sales are making a comeback.

In 2016 I would predict a slow but steady increase in property values, but nothing meteoric. Appraisers are starting to tighten their reigns a bit from what I have seen and heard, so forget about overpricing your property. If there isn’t sales activity in your area to support your asking price you could find yourself having to adjust after the appraiser pays a visit. That said, if inventory continues to be low, it will remain a sellers market overall so it’s a great time to sell if you’ve been thinking about doing so.

For buyers, interest rates have climbed a bit but are still historically low (remember the ’80s?). Rents are projected by some analysts to climb 3 percent this year, so it’s always better to own than rent if you are able to afford it. You’re paying someone’s mortgage so best to make it your own.

Christina Rordam is a licensed Realtor and Central Florida native with 10 years experience helping Orlando area buyers and sellers achieve their real estate dreams. She is a member of the Orlando Regional Realtor Associations Top Producer Club and holds the CDPE, CNE and CSP designations. Do you have any questions or a topic of interest that you’d like to read about? Contact Christina at 407-928-8294 or [email protected]. View homes online at ChristinaSellsOrlando.com.