Tag: real estate market report

Real Estate Market Update

Just wanted to give you another update market report because as crazy as it is for me to believe, we are more than halfway through the year and see no signs of prices dropping for buyers while sellers are still in firm control.

Interest Rates

Some good news for buyers though is that according to Jerome Powell, the chairman of the Federal reserve, interest rates will not change in 2021 or 2022.

They will, however, increase in 2023 twice and twice in 2024. So this year and next are a great time to try to make a purchase.

Federal reserve now forsees first rate hikes in 2023 across the board which obviously affects the housing market.

Current Market Conditions

One of the biggest issues we’ve seen in real estate has been the lack of inventory. While we did see a few more houses on the market in June and July, that’s nothing compared to the amount of buyers still looking for homes.

Inventory has also been in a slump because development of new construction has been slowed tremendously due to the cost of construction.

Lumber went up 275% last year. Peaked in May and now down 40%.

We won’t see the trickle effect in our housing market for several months or possibly until next year but it is starting to stabilize which is good news.

Private Equity Funds

Not so great news is that private equity firms like Black Rock are spending billions to buy property to become one of the largest landlords. More than 1/2 of the countries properties are owned by institutional investors.

We want to always try to give homeowners and families a chance to purchase because investors are constantly coming up as cash offers outbidding many would be homeowners.

The next two years are a great time to buy as far as interest rates but it’s all about getting your foot in the door.

New Construction

Then a few days ago in a CNBC article, the CEO of Taylor Morrison, thinks the housing shortage that began before the pandemic will stick around for a long time as market demand soars.

As I mentioned before, the new construction has slowed down so it’s going to be difficult for builders to make up the shortage, the deficit that been building up for more than a decade now.

In Oviedo, I went to 4 new communities and they were all but sold out. Two had no more lots and one had 5 lots left and over two dozen approved buyers in waiting. There’s such desperation for homes that these new communities weren’t even giving buyers options or design center consultations like in times past. They are literally paying over half a million for a brand new home they don’t get to customize until after the move in on their own dime.

Mortgage Demand Dropping

So even though interest rates will increase, the overwhelming demand and lack of supply will be with us for years to come. We’ve been seeing the decline in inventory since 2012 and no increase in sight.

The Mortgage Bankers Association’s seasonally adjusted index showed that mortgage demand decreased for the second week in a row this week, dropping by 1.8% to their lowest level since the beginning of 2020. Home purchase applications and mortgage applications to refinance a home both dropped for the week, even though mortgage rates dipped.

Refinancing now has penalties so homeowners are considering if it’s worth it when many had already refinanced at a low rate in the last few years anyways. New purchase applications are low because there is a low inventory and many are cash buyers out there.

Housing Inventory Issue

Growth in housing inventory has slowed over the past decade in the aftermath of the 2008 housing crisis, creating an “underbuilding gap” of 5.5 million to 6.8 million housing units across the country since 2001, according a recent report from the National Association of Realtors.

Right now, we need new inventory. People either love where they live or they don’t want to sell because they have no where to move. New construction is where we will see some resolve but it has to start sprawling outside of the cities people want to live in due to space and land costs.

Home Price Inflation

Home prices have risen sharply during the coronavirus pandemic across the U.S. but Orlando has moved up to becoming one of the most expensive per median income when we used to be considered affordable.

This hike has sparked affordability concerns especially for first-time buyers being priced out.

We have clients that were taking their time looking for a home for the last two years and have now they found their dream home. They’re paying $200K more than when they started. We’ve seen that time and time again.

If you see something you can afford now, don’t hesitate because when interest rates go up, it will cost you more and there’s no guarantee pricing is going to go down until we get more inventory pumped into the market for which there is no plan in sight to keep up with the demand.

If you have any market questions or concerns, please reach out to us:

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Orlando Housing Market Snapshot- October 2018

Orlando home prices, sales rise as inventory continues to slip in September

One year after Hurricane Irma threw a wrench into the Orlando housing market, data from the Orlando Regional REALTOR Association shows positive September-to-September comparisons for both sales and median price. Inventory, however, stayed on its year-over-year downward slide.
The good news, points out ORRA President Lou Nimkoff, is that in September the actual number of homes available for purchase reached its highest point this year. The month-to-month increase in inventory, combined with the traditional autumn lull in sales, is an opportunity for those buyers who struggled with competition during the summer. In addition, fall home shoppers can also enjoy a bit more attention from REALTORS, lenders, and other service providers who typically do not have quite as many clients to attend.

Median Price

The overall median price of Orlando homes (all types combined) sold in September is $233,000, which is 3.6 percent above the September 2017 median price of $225,000 and 1.3 percent above the August 2018 median price of $230,000. The median price for single-family homes that changed hands in September increased 3.8 percent over September 2017 and is now $254,250. The median price for condos increased 6.4 percent to $125,500.

Sales and Inventory

Sales of single-family homes (2,096) in September 2018 increased by 7.6 percent compared to September 2017, while condo sales (390) increased 23.4 percent year over year. Sales of distressed homes (foreclosures and short sales) reached 124 in September and are 3.1 percent less than the 128 distressed sales in September 2017. Distressed sales made up just 4.5 percent of all Orlando-area transactions last month. The overall inventory of homes that were available for purchase in September (8,092) represents a decrease of 6.4 percent when compared to September 2017, and a 3.6 percent increase compared to last month. There were 5.6 percent fewer single-family homes and 2.6 more condos, year over year. Current inventory combined with the current pace of sales created a 2.9-month supply of homes in Orlando for September. There was a 2.3-month supply in August 2018 and a 3.4-month supply in September 2017. The average interest rate paid by Orlando homebuyers in September was 4.66, up from 4.57 percent the month prior. Homes that closed in September took an average of 48 days to move from listing to pending and took an average of 84 days from listing to closing.

Buyers

This is a great time where we see buyers coming out of hiding because inventory and pricing has stabilized. At Waypointe, you have access to properties not listed publicly as well as get properties before they come on the market. Buyers need the assistance of REALTORS to help them compete against other buyers, for example by crafting attractive offers that take into consideration current appraisal issues and advising on contingencies, in addition to assistance through the many traditional functions that a buyers’ agent performs. Ready to start the homebuying process? We can help! Contact us today.

Sellers

Inventory and pricing has stabilized. If you’re looking to sell, we can help you get the MOST money from the sale of your home. Looking to relocate, move up to a larger home, purchase your first home or sell your rental? We can help. Contact us today!