The Orlando Real Estate Market Makes Zero Sense

According to a recent Redfin article, home prices in Florida are up by 1.8% and more homes are selling this year than last. But at the same time, homes are sitting longer and price cuts are everywhere. So what's actually going on here? Yeah, it kind of makes no sense. So today we're going to break it down. We're going to share what actually is happening in the Orlando, Florida real estate market and what it means for you if you're thinking about making a move. I'm Savannah. And I'm Kathy. And together, we are Team Williams, mother-daughter realtor duo, and your Orlando relocation experts. Real estate is hyper local. So it's important to understand the market of the specific area you're planning to buy in. What's happening regionally does not always reflect what's happening in an individual city or neighborhood. Right. And what's happening in one city can be totally different than what's happening in the city right next door. For example, Claremont and Winter Garden are cities side by side in greater Orlando. However, the median sale price has been trending upward in Winter Garden over the past year and a half, while the median sale price in Claremont has been trending downward. The median sale price in Winter Garden is currently about 40% higher than it is in Claremont. So very different. Very different. Okay. So that Redfin article said home prices were up in Florida by 1.8%. Let's see how that compares to the greater Orlando area as a whole. I have on the screen here a chart showing the median sale price of homes in Orlando since about July of 2023. Prices have been holding pretty steady, staying in the low 400s as the median sale price. As of this year, which is the latest data we have, there is a zero change year over year in the median sale price overall in the greater Orlando area. Meaning prices haven't gone up and they haven't really come down either. They've just kind of stayed flat over the past few years. This is similar to what we're seeing across Florida as a whole. So then why are we seeing some listing with price cuts over and over? As Savannah mentioned, when you zoom in closer, things look very different city by city. The overall data may tell one story, but when it comes to strategizing as a buyer, it's important to look at the specific market you're purchasing in. That's right. And you might be seeing some homes stay on the market for weeks or months on end while others seem to fly off the market. And most fall somewhere in between. There is an explanation for this, which we'll get to in just a minute. First, let's look at what's happening with inventory on a larger scale in greater Orlando. As you probably know, the more inventory a market has, the more likely it is to lean towards a buyer's market unless demand outweighs that inventory. So that's why we look at months of supply, which tells us how long it would take for the current inventory to sell. This metric helps us understand how balanced the market is and whether it leans more towards a seller's market or a buyer's market. Right now in the greater Orlando market, the month's supply of inventory is sitting at 4.8 months, which means the Orlando area is pretty much a balanced market. Yeah. And what's interesting about this chart is that since July of last year, the month's supply of inventory has been trending downward, meaning it was slightly leaning toward a seller's market. But over the past few months, since about the beginning of this year, we've started to see that line move back up again toward a buyer's market. So it'll be interesting to see where inventory goes from here and whether it continues to hover in this balanced range like it has been for a while now. Yes. And again, this is just the picture of greater Orlando. It doesn't capture what's happening in individual cities or neighborhoods. Some areas lean more towards the buyer's market, while others still slightly favor sellers. It really depends on how desirable that area is. And something crucial to know as a buyer in this market is that besides location, the type of home and price point you're looking at can completely change the market for you. So in other words, two people can be looking for homes in the same city, but the market can respond to them in totally different ways. For example, if person number one is looking for a single family home under $400,000, they're very likely to face multiple offer situations. On the other hand, person number two is looking for a single family home between $2 to $3 million. Based on the month's supply in that price range, that person is actually in a buyer's market and will be able to negotiate a substantial discount off the asking price. Now let's look at another scenario. If person number one decides to look at townhomes or condos instead of single family homes, still in that $300,000 to $400,000 price range, they are actually no longer in a seller's market. Instead, they are actually in a buyer's market where they're more likely to get a discount or concessions at closing. Which is why it can be really difficult to say whether any city is in a buyer or a seller's market because it really depends on the individual buyer and what they're looking for. Exactly. So that's why it's important to consult someone who understands your specific situation or scenario and how it relates to the market. For many buyers in the Orlando market right now, things have softened and that's opened the door for purchase price discounts and or concessions at closing. But one question you may still have is, why are some homes selling quickly while others are sitting in the same neighborhood? There are two main factors here. The first is price. I'll give you an example. The other week I saw a home come onto the market that was dated and had a mid-century vibe, no recent updates, but it was priced really well. Priced under $350,000. The seller received multiple offers within days and it went under contract in just four days. But if that same house had been priced $100,000 higher, it might still be sitting right now. And so as I mentioned earlier, the lower the price tier, the more likely there is to be buyer competition. It just happens that way. Yeah, it does. And this is exactly why we do a price analysis on any home our clients are interested in purchase. Because a home could be priced well, or it could be overpriced relative to that neighborhood or that market. The second factor is presentation. Many buyers in today's market don't want to take on a lot of work. And if you're watching this, chances are you feel the same way. Yeah, things are more expensive in general right now. And people are trying to save money wherever they can. Buyers don't want to immediately take on a bunch of updates or projects or renovations. So if a home looks like it needs a lot of work and it's not priced correctly, it's very likely to sit for a long time regardless of the price tier. But something important to understand is that it's actually normal for homes to sit in this type of market. The median number of days before a home goes under contract is about 45 days. Now it can be much faster if the home is priced really well, but even a fairly priced home may still sit for a few weeks or more because the market has just slowed down compared to in Central Florida anyways. And it's become more balanced, if you will. Yes. And going back to your point, that's exactly why we do a price analysis before our clients submit an offer. When we do that, we look at comparable homes that have sold in the last six months within about a one mile radius of the property. This is a slower, more buyer-friendly market. And when you break it down at a more detailed level and look at individual factors like location and price range and things like that, things start to make a lot more sense. And that's exactly what we help our clients navigate every day. If you're moving to the Orlando area, we'd love to help you navigate this market. Reach out to us today. Our contact information is below and in the description box. We hope you found this video helpful. Have a great day and we'll see you next time.