The metro saw a record 1,200 new homes come up for sale in May, according to Orlando Regional Realtor Association data released June 15. While that’s a sign Central Florida’s hyper-competitive market may be softening, prices continue to climb and buyers remain at a disadvantage.
That’s because even with a 44% bump in home inventory from April to May, the Orlando region still features just under a month’s supply of homes. The metro is far from the six months of supply that indicates a balanced housing market.
The region needs a few more inventory bumps like the one in May to replenish rock-bottom levels of supply.
The surge in new inventory is a sign the local housing market is “beginning to level out,” Tansey Soderstrom, 2022 Orlando Regional Realtor Association President, said in a June 15 report. “Buyers will find more homes to choose from and sellers are still getting top dollar as Orlando’s median home price continues to rise.”
After two years of a historic seller’s market nationwide, there are signs the residential real estate sector is cooling. Namely, record-low mortgage rates are surging upward, and they surpassed 5% in Orlando in May for the first time in 12 years. Low rates in 2020 and 2021 were one of the factors that encouraged many to jump into the homebuying frenzy.
The housing market does appear to be slowing down, and though U.S. home prices are projected to continue to rise for the foreseeable future, it will be at a slower rate, PNC Financial Services Group Inc. (NYSE: PNC) Senior Economist Abbey Omodunbi old OBJ. “We’re at or near an inflection point.”
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To Omodunbi’s point, prices are not expected to fall. Zillow Group Inc. (Nasdaq: ZG) in April released a revised forecast that projected home values across the U.S. will grow an average of 5.5% by July and grow 14.9% by March 2023.
After home sales slowed in March and April, they improved 1.9% year-over-year to 3,946 sales in May. With demand strong and supply still low, the median price marched upward to a new record: $379,950, up 27% from $300,000 in May 2021.
Here’s a look at other trends in Orlando’s housing market last month:
- Homes spent an average of 21 days on the market, less than the average of 24 days in May 2021.
- The average interest rate of 5.3% was the highest the Realtor association has tracked since July 2009, when it was 5.34%.
- The median sales price hit a record high for the fourth consecutive month.
Local housing market trends are important, as every home sale in the state has an estimated local economic impact of $112,500, according to the National Association of Realtors. In addition, the housing market often is considered a reflection of the local economy’s overall health.
News Source: Orlando Business Journal
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