- November 21, 2024
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Despite the challenges of 2020, the Orlando real-estate market fared better than many expected — and that trend is forecast to continue into 2021.
When the coronavirus pandemic first hit, some people feared a repeat of the 2008 Great Recession. However, it turned out to be the exact opposite — demand remained high, and inventory remained low.
The local market was hot prior to the pandemic, but other factors throughout the year contributed to creating an even stronger market, said local Realtor Christina Rordam — of Florida Realty Investments.
According to the Orlando Regional Realtor Association, as of November 2020, total Orlando-area home sales were up 20%. ORRA also reported that while demand is high, supply is low. Inventory in November 2020 was down 26%, with just a few thousand Central Florida homes available.
“We don’t have enough inventory, and we haven’t had enough houses to sell to people,” Rordam said. “We have people competing with each other to have the opportunity to purchase a house.”
Rordam said she foresees more of the same in 2021, especially as people continue to work from home and evaluate their living spaces. Other factors, such as historically low interest rates, also should keep the market hot.
As one of the nation’s hotspots for tourism, the Orlando area — especially West and Southwest Orange County — also has become one of the most family-friendly and most desirable places to live. After all, many families dream of having theme parks like Walt Disney World or Universal Studios in their backyard.
Things got tough for many residents last year, when the Walt Disney Company and Universal Studios announced thousands of furloughs and layoffs. In fact, it was one of the situations that concerned Rordam the most.
“I was afraid this was going to be really bad, and it was … really bad for us in terms of some of the locals,” she said. “They were laid off, and that was not good, but also we’ve seen (the companies have) brought some of those folks back, and I think they’re going to continue to bring more people back.”
However, there are plenty of people looking to relocate to Florida as they find themselves working from home. Especially for buyers coming from one of the coasts, Florida’s prices and taxes could seem “like a dream.”
“People feel they’d be in remorse if they didn’t take action to purchase a home now as opposed to once interest rates decide to go back up.” — Jane Dunkelberger
“We’re a destination state to begin with, and more people are rethinking where they’re at and the cost of living, and we’ve got a really good cost of living here for a lot of people,” she said. “I don’t feel that we have inflated values, either. Values have gone up … but they’re reasonable, predictable gains. Appraisers aren’t just going to sign off on something. Things are appraising correctly. I’m not seeing a lot of things under-appraised or over-appraised.”
Additionally, statistics show the pandemic has helped migrate some of the Northeast population to Florida, the ORRA recently reported,
“Websites like Redfin.com reported that in just their third quarter, 22,000 more Redfin.com users searched moving to the Sunshine State,” ORRA representatives said. “New York Redfin.com users are flocking to Florida, Texas, North Carolina, north Virginia and many others.”
Redfin.com Economist Taylor Marr said when the pandemic hit the United States in March, remote workers started leaving New York City in search of open spaces, sunshine and more affordable living spaces. That makes Florida one of the top candidates — plus, it has no state income tax.
ORRA wrote that as the pandemic continues and people are more confident in their remote work and school plans, the trend continues. This could increase Orlando-area sales for months and possibly years to come.
The demand for homes in Central Florida has increased, but supply is not in abundance — a big difference from the Great Recession, Rordam said.
“We had an oversupply (then),” she said. “When all that kicked off with the recession, we had at one point 24 months of inventory. These days, we’re lucky to have two or three months of availability. We don’t have an oversupply.”
In general, a five- to six-month supply is what housing economists consider an indicator of a healthy market balanced between buyers and sellers.
“These days, we’re lucky to have two or three months of availability. We don’t have an oversupply.” — Christina Rordam
In ORRA’s Dec. 28 market statistics report, single-family home inventory decreased by 184 and currently sits at 3,734. Condo inventory decreased by 42, leaving 2,277 condos, townhouses and villas on the market.
That also increases prices. According to the Dec. 28 report, the median price of an existing single-family home in Lake, Orange, Osceola and Seminole counties increased to $371,673. The median price for a condo, townhouse or villa increased to $215,000.
The demand is so high that Rordam said she’s had many buyers purchasing homes without ever stepping foot in them.
“I’m increasingly doing video showings — FaceTiming customers and spending 30 to 40 minutes at a property,” she said.
Another difference from the Great Recession is there are more regulations in terms of lending, and there aren’t as many adjustable-rate interest loans or stated-income loans.
“People really have to qualify, lenders are much more thorough, and we have protection where people have three days to review their closing disclosure before they can close on the property,” Rordam said. “The lending programs are different, the guidelines are different. There’s a lot more oversight, there’s not as much predatory lending that’s happening, and there’s not the oversupply.”
In September, Realtor Jane Dunkelberger, of UPSIDE Real Estate, said she has seen interest rates as low as 1.75%.
“I have a positive outlook. I think we’re going to have a better year than last year.” — Christina Rordam
“People feel they’d be in remorse if they didn’t take action to purchase a home now as opposed to once interest rates decide to go back up,” she said.
Rordam said she believes these good interest rates at historical lows will continue for a while longer.
Overall, Rordam said, the real-estate industry and consumers alike adapted well — and quickly — to their new needs.
“Consumers, to their credit, have really said, ‘This is the new norm for the foreseeable future: I’m allowed to work from home, and I’m not going to just stay where I’m planted, I’d like to be here or there,’” she said. “I have a positive outlook. I think we’re going to have a better year than last year.”
