2015 FORECAST: Real Estate

WEST ORANGE COUNTY — It doesn’t take a ton of driving around for one to see the growth in West Orange County.

Drive through any of the cities or areas that make up the region, and you’ll see neighborhoods and shopping centers being constructed and homes being placed on the market — and quickly sold.

If an outside observer were to reason that the real-estate market in West Orange County — or in Central Florida as a whole, for that matter —must be on an uptick, that outside observer would be right. 

Just ask Zola Szerencses, the chairman of the Orlando Regional Realtor Association.

“It’s been 41 consecutive months that the (median) price has risen (locally); almost 45% since July 2011,” Szerencses said. “Your area is actually one of the better areas. It’s been very good in Central Florida, overall — especially the Winter Garden, Ocoee, Windermere, Dr. Phillips and MetroWest area. It’s been growing continuously.”

Szerencses said the growth was so encouraging, based on what has happened in 2014, where sales picked up significantly in October, November and December to close the year, that one of the bigger problems he and his colleagues in the real estate field are having to contend with as 2015 arrives is simply needing more homes to sell to meet the demand.

“We need as much as we can — we need more inventory, and we need more available homes for sale,” Szerencses said.

GROWTH IN THE GARDEN

Winter Garden, a historic citrus town and the largest municipality in West Orange, continues to grow and carve out a niche as an under-the-radar place that is attracting new residents from throughout the region.

“I think it just has to be like discovering the value of the area; (Winter Garden is) kind of like a best-kept secret,” Szerencses said. “The Winter Garden area, we see close to a 19% increase in sales (in 2014) compared to 2013 — that’s really good.”

Pat Sharr, the owner of Pat Sharr Realty, has nearly 40 years of experience in West Orange County and parts of Lake County and said Winter Garden’s ability to retain its identity, even through tremendous growth, has been key to its success.

“Winter Garden has grown in that area of being in a smaller town but having all the conveniences, too,” Sharr said. “Still, even though it has grown, it hasn’t lost its family feeling.”

The numbers back up her assertions. According to the ORRA, 70 homes were sold in Winter Garden in November — up from 59 homes sold in the same month in 2013. The inventory is also increasing, up nearly 31% from a year ago, according to the group, another encouraging sign.

In addition to the great schools and all the amenities that the Winter Garden market offers, there is also plenty of choice. Prospective buyers can chose from new and more recent builds to some of the city’s historic, older homes near the downtown area — an area that has been one of the great catalysts for the area’s growth.

“Traditionally, more people are interested in being downtown in the Winter Garden area, where they can walk to downtown because downtown Winter Garden has changed in so many ways,” Sharr said. “Being able to go downtown to all the restaurants — whether you walk or you have a golf cart — they like the convenience. A lot of the old homes are being remodeled. Just for the atmosphere and the convenience of being able to go somewhere and not having to get in the car and go.”

A TALE OF TWO O’S

Local growth isn’t limited to Winter Garden, either.

For Oakland and Ocoee, though, neighbors of Winter Garden to the west and east, respectively, some growth may be tied to proximity. Ocoee, for instance, has the distinction of being near enough to the shopping and dining offered in Winter Garden while having a market that — while trending up — isn’t nearly as expensive.

“The median price in the Ocoee area, it was approximately $170,000 last month, and in Winter Garden, it was close to $275,000 — so it’s a huge difference,” Szerencses said. “It’s been growing, so it’s changing for a positive. In November 2013 the median price in Ocoee was $162,000, and last month, it was $170,000. So it is an increase; but it is more like a moderate increase compared to the Winter Garden area.”

ORRA numbers show growth in Oakland, too.

“Oakland is in similar shoes to Winter Garden,” Szerencses said. “We’ve had such a low inventory the past few years, and there is tremendous growth going on there. … There is also growth expected for the years to come — moderate growth, I should say.”

Sharr, who also works in both of those markets, attributes the growth in all three cities to the aggressive commercial growth locally. Places such as the outdoor mall at Fowler’s Grove and the renewal of downtown Winter Garden, along with shopping springing up in Clermont and elsewhere, represent a level of growth that longtime residents of the area find remarkable.

“Who ever thought Winter Garden would ever have anything like that?” Sharr said. “It’s just amazing to me, the growth that has happened in Winter Garden, Ocoee and Clermont. Oakland used to be a sleepy little town, and it’s not that way anymore. I’ve seen quite a change.”

SOLID SALES IN THE SOUTHWEST

Quietly, it would seem, sales in West Orange County are actually strongest in Dr. Phillips and MetroWest — areas that are also considered parts of southwest Orlando.

“Dr. Phillips actually has been the winner,” Szerencses said. “I would say MetroWest and then Dr. Phillips, in the sales, they are close to a 24% increase compared to last year in MetroWest and close to 20% in Dr. Phillips, which is also a good indication. Those are two major areas (of growth).”

Proximity to downtown Orlando and the heart of the metropolitan area has boosted these two areas, which, like Winter Garden, have also done well to maintain family-friendly images.

“The economy of Central Florida, I think, is just driving the market toward the centralized places,” Szerencses said. “Dr. Phillips and MetroWest are easily accessed.”

BUILDING BOOM

With the Horizon West area being the most noticeable example, construction is on an uptick again as 2015 gets underway.

This is good news for construction, and home builders are optimistic that there is room for more growth within the market.

“We still see an industry that it is under-producing (on a national scale), given the population growth that has occurred over the last six or seven years,” said Fred Cooper, a senior vice president for luxury home builder Toll Brothers. “We believe there is still significant, pent-up demand that is waiting to be released. We’re producing a million homes a year as an industry right now, compared to throughout the last 40 years where normal, average production has been about 1.5 million a year. 

“We think that there is going to be a continuing recovery,” he said. “As the economy gets stronger, hopefully mortgage availability gets more flexible for the first-time buyer — which will help the whole of homebuilding price points. So we’re optimistic that 2015 is going to be a strong year.”

Toll Brothers has multiple properties in West Orange County, including Casabella at Windermere and Royal Cypress Preserve off County Road 535, and Andre Vidrine, the vice president of the builder’s Central Florida operation, said the local market is encouraging.

“We’ve had some really good, strong sales (since 2012),” Vidrine said. “The good thing about West Orange County and the Horizon West area is they have a solid school system. Commutes to shopping, access to interstates — it’s well positioned within Orange County. You have State Road 429 — that’s a huge, brand-new highway that is producing a lot of growth out there.”

Of course, anytime there is so much building going on, current residents may have concerns about whether there is an adequate demand for such construction, lest they have half-filled neighborhoods and shopping centers. Sharr said the demand to be in West Orange County these days likely even exceeds the current rate of construction, though, and that more growth is on the way.

“Yes, definitely,” Sharr said. “Over in Avalon, off of (State Road) 545. They’re going to put up more houses there, and I think that contributes to the 429 because of easy access. The 429, I think, has brought a lot more families in.”

MARKET TRENDS

As the market trends upward, it merits an assessment as to whether the growth favors buyers or sellers. While things are encouraging for either side of the equation, Szerencses said there is little doubt as to who is favored currently.

“Definitely this is a buyers’ market,” the ORRA chairman said.

Another trend, though, and one that favors sellers, is that as the median price continues to rise, Szerencses and his colleagues are finding that would-be sellers that have been on the fence about putting their home on the market are becoming more likely to do so. There also has been a noticeable rise in prominence of rentals — both in terms of people buying or renting out properties and the prices of rentals, which are also on an upward trend.

A study released by the National Low Income Housing Coalition in March found that Florida was the 15th-most-expensive rental market, given the relationship between rising rental rates and stagnant median income. The coalition found that foreclosures have forced more families into the rental market, driving up rates.

“The reason for that (rising rental rates) is because of the inventory and the people that aren’t able to get into the mortgages,” Szerencses said. “Eventually it has to level off so it can be affordable for people who cannot purchase … the market is going to adjust itself.”

SELLING POINTS

There are a variety of factors that go into each and every family’s decision on what home to by.

While school systems are always a big part of decisions, one trend longtime West Orange County Realtor Pat Sharr has noticed is that families are looking for those good schools — and more.

“Schools play a very important part for all the families, but they want that family atmosphere (in the community) also,” Sharr noted, citing Winter Garden as a prime example.

In terms of trends in newer homes recently constructed or being built, Orlando Regional Realtor Association Chairman Zola Szerencses said buyers are favoring more open floor plans. Accessibility to highways is another key factor, with State Road 429 standing out as an example as growth continues to pop up along the corridor.

LEANING TOWARD LUXURY

Within the home building industry is a subindustry of luxury home builders, some of whom have a foothold in West Orange County.

Toll Brothers, a Philadelphia-based luxury home builder with a presence in 50 markets nationwide, has experienced great success in Central Florida and has two properties in West Orange County — Casabella at Windermere and Royal Cypress Preserve off County Road 535.

So what sets luxury builders like Toll Brothers apart from other builders?

“A buyer who chooses to build a home with Toll Brothers selects from a variety of base houses and then, typically, our average buyer has about 20% in customization features to the house,” said Senior Vice President Fred Cooper. “And it’s not just upgrading the carpeting, cabinetry and flooring — they can make structural changes to the house. They can very significantly alter the physical footprint of the house through structural options as well as the upscale options.”