Another months brings another sign of a decelerating Central Florida housing market.
Metro Orlando home deals in September plummeted compared to sales activity in August and September 2021, according to Orlando Regional Realtor Association data released Oct. 17.
Meanwhile, the median sales price slipped for the third consecutive month, something that hasn’t happened since 2019, before the local housing market accelerated into a historic seller’s market.
The region’s residential real estate sector still would be classified as a seller’s market, but the latest housing report is further proof the red-hot market that persisted since 2020 has peaked. At the same time, national real estate and financial firms are growing more bearish on the single-family home industry’s future.
Here’s a closer look at home the local housing market performed in September:
- Sales: The Orlando Regional Realtor Association recorded 2,717 existing home sales in September, down 18% from 3,324 sales in August and down 28% from 3,789 last September.
- Prices: The median sales price fell 3.4% month-over-month to $365,000. Still, the enormous home price appreciations of the past couple of years haven’t come close to being wiped out; the median price was up nearly 15% year-over-year.
- Mortgage rates: The Realtor association tracked an average rate of 6.3% in September, the first time it has been above 6% since 2008. Rates are more than double what they were a year ago: 2.86%.
- Days on market: Similar to August, houses took longer to sell last month. Homes spent an average of 31 days on the market in September, compared with 27 days in August and the year-ago period.
- Inventory: Inventory increased for the fifth straight month, rising 1.8% month-over-month to 6,884 available homes. That’s up 88% compared to last September. However, that only puts metro Orlando at a little more than two months of supply, short of the six months of inventory that indicates a balanced market.
Metro Orlando residents “are starting to feel the impacts of rising interest rates,” 2022 Orlando Regional Realtor Association President Tansey Soderstrom said in a prepared statement. “Rising interest rates are causing buyers to be more cautious, resulting in fewer Orlando home sales for the month of September. This cooling-off in sales does have an upside for buyers, as they now have the luxury of being more patient when looking for a home.”
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Zillow Group Inc. forecasts metro Orlando home values to flatline the rest of the year. The Seattle-based property data firm in September projected local home values will stay the same through Oct. 31, tick up 0.3% by Dec. 31 and gradually increase 3% by September 2023.
Meanwhile, the national outlook on the residential real estate sector is softening. For example, New York-based financial giant Morgan Stanley recently adjusted its forecast for nationwide home price changes from a 3% year-over-year increase by the end of 2023 to a 3% decrease.
That means prices would be down 7% from where they are today, Co-Head of Securitized Research Jim Egan said in Morgan Stanley’s “Thoughts on the Market” podcast.
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: bizjournals.com