FORECAST: How will the housing market fare in 2025?

Real estate is a constant hot topic because it turns the wheels of the economy, said Rose Kemp, 2024 president of the Orlando Regional Realtor Association.

“Real estate is a great indication of how our economy is going to go,” she said. “Every sector of the Orlando region is growing; we have about a thousand relocations a week. We have investors investing in the Orlando region.

“The West Orange sector has really grown over the last three to four years because of the high demand for housing,” Kemp said. “There’s such growth in Horizon West.”

There’s no doubt Horizon West is the community with the hottest housing market — in both new construction and resales.

Ken Pozek, a real-estate agent with The Pozek Group, said one of the trends he is seeing is Horizon West residents moving within the community.

“We’ve had a lot of people from other places … but there are a lot of residents moving from one part of Horizon West to another,” Pozek said.

Many folks originally flocked to the southwest area of Orange County in search of a new home — but now that they are established, they want a bigger house or one that better suits their needs, he said. Inventory continues to be strong there, he said.

Simon Simaan, a Realtor and broker with The Simon Simaan Group, has been successful in the more established areas of Winter Garden and Windermere, in addition to Horizon West.

Simaan is optimistic about the 2025 real estate market and expects interest rates — which currently are about 6.7% — to go down.

“I hope they’ll go down to somewhere in the 5s, and with the cost of everything going down, affordability will be better for first-time homebuyers, people looking to upsize or downsize,” he said. “I think we’ll be in a better position (this) year.”

Kemp has had much success selling homes in the areas surrounding Walt Disney World.

“I specifically have served customers who specifically want to live in that quadrant because they are Disney lovers,” she said. “That trend has not stopped; that trend continues. People are definitely moving into those areas because they love Disney.”

SUPPLY AND DEMAND

The real estate market stabilized in 2024 for probably the first time since the pandemic, Kemp said.

“At the beginning of the year, we were at about three months’ supply of inventory,” she said. “Prior to the pandemic, we were at six months’ supply. When everything shut down, we had two months because everyone pulled off the market. The values went up because there wasn’t much inventory.”

“When the interest rates started dipping a bit, that regenerated the market, and what you’ll see is a lot of homebuyers jumping off the sidelines and buying property,” Kemp said. “Those that are waiting are coming back on the market and securing a home. … We’re on an upward trend of inventory.”

Sixty-seven is the average number of days homes are staying on the market, Kemp said, meaning it takes about two months for the average home to sell.

Central Florida is sitting at a four- to five-month supply of single-family homes, according to real-estate agents; it’s closer to a four-month supply in West Orange County, Simaan said.

At the start of 2025, it’s definitely a buyer’s market, he and Pozek said.

“We’re seeing anywhere from 5 to 7% off list price,” Simaan said. “Things aren’t selling for asking price. A year ago, it was a seller’s market, six months ago it was definitely a buyer’s market. … The market changed so fast that sellers are still thinking they can still get prices they got two years ago and buyers are still thinking they can get a better deal.”

Some months are better than others when it comes to buying or selling, Simaan said.

“The seller will get the best price in May; the buyer will get the best price in December,” he said. “Sellers want to offload at the end of the year; everyone’s focusing on the holidays. Historically, between the election, the interest rate and the holiday season, this fourth quarter has been challenging in real estate. It’s been slow this past quarter. In the middle of January, I expect it to pick up.”

WHAT ARE BUYERS LOOKING FOR?

Several post-pandemic trends continue, said Rose Kemp, 2024 president of the Orlando Regional Realtor Association. People are looking for an outdoor/indoor lifestyle.

“They’re looking for an area outside, whether it’s a simple patio outside, so they can spend time outdoors,” she said. “If the house doesn’t have an outdoor space that’s designated and designed specifically to use as an outdoor living room … they’re looking for homes that can be converted. … not only to entertain family and friends, but also making outdoor working space.”

The COVID-19 pandemic also saw a rise in home offices.

“People being able to work remotely became a big thing during the pandemic. … That’s a reason people are relocating because they still have an opportunity to work for their company in a remote location.”

Buyers who like to travel are looking for townhomes and condominiums because they want lock-and-go housing without the worries of lawn maintenance. Others who are looking to buy a house are looking for low-maintenance and low-energy properties.

“If you’re selling a home and have energy-saving features and green features, that’s a big selling point,” Kemp said.

Simon Simaan, of The Simon Simaan Group, has found that people are looking for more turnkey homes that are updated and not in need of repairs or major renovations.

“With the costs of high interest rates … people expect more for their buck,” Simaan said. “They’re going for homes that don’t have issues … and are move-in ready.”

Many of his clients are looking for pools, big backyards, privacy space between neighbors, three-car garages for extra storage.

“Now that kids and in-laws are staying in people’s homes, they want more space,” Simaan said. “With costs increasing, children are staying with their parents longer; parents need those extra bedrooms.”

REAL ESTATE ADVICE

Kemp has advice for both buyers and sellers.

“Seek to work with a local realty,” she said. “Find yourself a local Realtor that knows the local market and trends. … If you don’t have a Realtor, you can go to ORRA to find one. … This is not a do-it-yourself market.”

Pozek suggested people in the market for buying visit the ORRA website and search “quarterback.” This provides weekly statistics on the supply of homes and how many are short sales or bank owned.

“If you’re a buyer, this is a great market with great opportunities for buyers; opportunities we haven’t seen pre-pandemic,” Kemp said. “Why? Because there are more houses coming on the market, you have more options. … There was a time when buyers just had to get what was available.”

Current interest rates in the 6% range changes that, she said.

“You have more houses on the market to pick from, and that gives you better options for negotiating and finding the home that’s right for you.”

This means there are more sellers because they have more options for making their next purchase.

Pozek said buyers definitely have more flexibility now than in past years. In this season of buying and selling, sellers need to be prepared to have multiple offers.

Simaan said sellers should do everything they can to enhance the price of their home — increase curb appeal, stage their home and remove distracting personal items, make sure it has a pleasant scent, and consider new furniture.

“You really want your home to look like a model home,” he said. “Look at any new-construction model home … and resemble those.”

For buyers, Simaan said, they will have more negotiating power if they focus on listings that have been on the market for a long time.

“If the house has been vacant four or five months, the owner is continuing to pay for expenses every month,” he said.

In addition, he said buyers should always get a detailed home inspection, including a wood-destroying organism inspection, and they should do survey, title and lien searches.

“Make sure you check all these things, because if you inherit these problems, after closing, you’ll be stuck with those problems,” Simaan said.