Orlando Housing Market Trends and Forecast for 2024 – Norada Real Estate Investments

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The Orlando housing market has been showing significant activity in recent months. The current market conditions in Orlando indicate a shift towards a more balanced landscape. With a rise in inventory and a slowing of home sales, it is gradually transitioning from a seller’s to a buyer’s market. This shift presents favorable conditions for potential homebuyers.

While the median home price experienced a slight decrease from October to November, the overall trend suggests stability rather than a significant drop. The market continues to be influenced by factors such as interest rates and inventory levels.


Buy/sell, rent/lease residential &
commercials real estate properties.

How is the Orlando housing market doing currently?

In November 2023, the Orlando housing market experienced notable shifts, as revealed by the latest data from the Orlando Regional REALTOR® Association. The inventory for November recorded a substantial spike, reaching 8,202 homes, marking a 5.0% increase from October’s 7,813. This upswing marks the eighth consecutive month of rising inventory levels.

However, this surge in supply coincided with a noteworthy 17.8% decline in overall sales, dropping from 2,429 in October to 1,996 in November. Notably, this trend has persisted for six consecutive months, a pattern not uncommon in the lead-up to the holiday season.

Interest rates also played a crucial role in shaping the market dynamics. November witnessed a slight dip in interest rates, recording 7.3%, down from the peak of 7.8% in October— the highest level in over 22 years. The median home price for November was $375,000, a marginal decrease from October’s $377,000.

Homes, on average, spent 46 days on the market in November, a modest increase from 44 days in October. New listings fell by 7.8%, with 3,188 homes hitting the market in November compared to 3,456 in October.

Market Insights and Balance

Lisa Hill, President of the Orlando Regional REALTOR® Association, emphasized the significance of a balanced market, defined as a six-month supply of homes. November marked the first time since January 2019 that the market had more than four months of supply. Hill noted, “With an increase in inventory and interest rates showing signs of coming down, we have conditions for a strong, healthy market heading into 2024.”

Market Snapshot

Delving deeper into the market snapshot, interest rates fell from 7.8% in October to 7.3% in November, representing a 10.3% increase compared to November 2022 when rates were at 6.6%. Pending sales saw a 3.6% decline, dropping from 2,900 in October to 2,796 in November.

Distressed homes, including bank-owned properties and short sales, accounted for 1.1% of all home sales in November, reflecting a 16.0% decrease from October when 25 distressed homes were sold.

Inventory Trends and Market Stability

The Orlando area’s inventory experienced a notable 15.6% increase from September to October, rising from 6,758 to 7,813. The supply of homes expanded to 3.22 months in October, marking a 21.8% increase from 2.64 months in September. A balanced market is characterized by a six-month supply.

New listings decreased by 2.5% from September to October, shifting from 3,545 homes to 3,456 homes.

Is Now a Good Time to Buy a House in Orlando?

Considering the evolving dynamics of the Orlando housing market, the present moment appears favorable for potential homebuyers. With a shift towards a buyer’s market and improving conditions, it could be an opportune time to explore real estate opportunities in the Orlando area.

Orlando Housing Market Forecast 2024: Will it Crash?

The Orlando housing market has also been a topic of interest and speculation for buyers, sellers, and real estate enthusiasts alike. Zillow has provided valuable insights into the Orlando housing market, offering a glimpse into key metrics shaping the real estate landscape.

As of December 31, 2023, the average home value in the Orlando-Kissimmee-Sanford area stands at $384,720, reflecting a 2.1% increase over the past year. Homes are swiftly going pending, with an average of 23 days on the market.

The market forecast for the Orlando housing market reveals promising signs for both buyers and sellers. As of December 31, 2023, the forecast indicates a positive trajectory with a projected 4.4% increase in overall market value. This forecast serves as a crucial metric for those keen on gauging the future dynamics of the real estate landscape in the Orlando-Kissimmee-Sanford area.

Based on the provided data and the market forecast, there is no immediate indication of a housing market crash in Orlando. The positive forecast and steady metrics point towards a resilient real estate market.

Current Market Statistics

  • 1-Year Market Forecast (December 31, 2023): +4.4%
  • For Sale Inventory (December 31, 2023): 10,346
  • New Listings (December 31, 2023): 2,861
  • Median Sale to List Ratio (November 30, 2023): 0.984
  • Median Sale Price (November 30, 2023): $374,667
  • Median List Price (December 31, 2023): $428,300
  • Percent of Sales Over List Price (November 30, 2023): 17.4%
  • Percent of Sales Under List Price (November 30, 2023): 62.4%
Orlando Housing Market Forecast 2024: Will it Crash?
Source: Zillow

Orlando Real Estate Investment: Should You Invest in Orlando?

Is Orlando a Good Place Real Estate Investment? Many real estate investors have asked themselves if buying rental property in Orlando is a good investment. You need to drill deeper into local trends if you want to know what the market holds for the year ahead. We have already discussed the Orlando housing market 2023 forecast for answers on why to put resources into this market.

Let’s talk a bit about Orlando and the surrounding metro area before we discuss what lies ahead for investors and homebuyers. The City of Orlando is nicknamed “the City Beautiful and is one of the most-visited cities in the world primarily driven by tourism, major events, and convention traffic.

Orlando’s housing market is expanding at a great pace and people from all over the country and even beyond are either choosing to move permanently or invest here. Orlando has once again proved to be one of the best places to invest in real estate in Florida. Owing to its picturesque beaches, rapidly improving quality of life, booming population, and economy, Orlando is proving to be a secure real estate investment destination for not only local but also international investors.

Top Reasons To Invest In The Orlando Real Estate Market

  • Orlando is a beautiful city to live in having more than 100 lakes.
  • The city is nicknamed “the City Beautiful.”
  • Also, nicknamed the ‘Theme Park Capital of the World.”
  • Ranked #2 In America’s Fastest-Growing Cities – Forbes.
  • The Orlando area is home to Walt Disney World, Universal Orlando, and many others.
  • The City has over 100 parks and 21 community centers offering athletics, camps, and social programs.
  • It is the center of the Orlando metropolitan area, with a population of about 2.5 million.
  • These figures make it the 23rd-largest metropolitan area.
  • Orlando’s real estate has been one of the best long-term investments throughout the last decade.
  • Strong renter’s market.
  • Over 60% of the population rents.
  • Strong economic and job growth.
  • Orlando is a major industrial and hi-tech center employing thousands of people.
  • More than 150 international companies, representing approximately 20 countries, have facilities in Metro Orlando.
  • One of the main driving forces in Orlando’s economy is its tourism industry.
  • It is one of the most visited cities in the world primarily driven by tourism, major events, and convention traffic.
  • The city drew more than 75 million visitors in 2018.
  • It was listed as a “Gamma−” level global city in the World Cities Study Group’s inventory.

Let’s look at the number of positive things going on in the Orlando real estate market which can help investors keen to buy an investment property in this city.

Increasing Foreign Investment in Orland0

International investors from all major countries of the world are exhibiting their interest in the Orlando real estate market because of its beautiful scenery, improving quality of life, and ambient weather. It is also extremely popular for foreign investments because of its intercultural connectivity with people from various Latin American countries. In addition to this, many Chinese, as well as Spanish and Middle Eastern investors, are also attracted to Orlando, FL for real estate investment.

Dramatic Population Growth

Owing to people from various walks of life and demographic differences choosing to reside in the suburbs of Orlando, this city is going through major population growth. During the last 3 years, the population in Orlando has been growing at a rate of 7.2% which has never been experienced by this city before. The current population of Orlando in 2020 is 1,964,000, a 2.13% increase from 2019. The population of Orlando in 2019 was 1,923,000, a 2.18% increase from 2018.

Orlando is rapidly becoming a central attraction for businessmen, students, and small families owing to its growing trend of upward life mobility which makes lures investors to invest in the Orlando real estate market. Another reason for the growing economy and population expansion in Orlando, Florida, is the developed transportation infrastructure which makes traveling between destinations more convenient. Generally, Florida has an efficient transportation network that complements its tourism growth as well.

Orlando’s Increasing Job Opportunities

While improving the Orlando real estate market and flourishing tourism is two of the most important reasons behind Orlando’s economic stability, these two industries have a lot to gain from the successful economy. This expansion is related to the growing population and job opportunities in this city, this translates to more rental income and tourism leading to a better economy for the city. Orlando is the new hub for many young professionals especially those with various types of technological expertise, including engineers and IT professionals.

This city has experienced annual job growth of around 4.4% and is also one of the fastest-growing metro areas in the country. The city is also set to experience its highest job growth rate in the 10 years to come. A market with high job growth is a great market for real estate investment as well. Orlando metro area is adding STEM jobs at a faster clip than the Bay Area metros. The Orlando–Kissimmee–Sanford MSA was ranked among Forbes’ 15 Best Big Cities for Jobs. They cited Orlando’s science, technology, engineering, and mathematics (STEM) job growth in recent years as one contributing factor.

Orlando’s Rental Market

Thanks to a strong economy, Orlando’s rental market continues to boom. It is consistently named as one of the best rental markets in the nation and the #1 place in Florida to buy a profitable rental property. While tourism is one of the driving forces in the local economy, Orlando is also an important high-tech hub. Since job opportunities in Orlando are growing, people from all over the country and even some other countries are choosing to move here.

This directly translates to a boom in rental income as there is a resultant increase in the demand for both residential and commercial property rentals, and this means more steady income for investors in Orlando real estate market. The soaring rental rates are good signs for real estate investors. Around 46% of the households in Orlando, FL are renter-occupied.

Current Rental Market Trends

The average size for an Orlando, FL apartment is 962 square feet with studio apartments being the smallest and most affordable, 1-bedroom apartments are closer to the average, while 2-bedroom apartments and 3-bedroom apartments offer more generous square footage. About 60% of the apartments can be rented for $1,500/mo or less. 26% of the apartments fall in the price range of $1,501-$2,000, and only 8% are as expensive as $2,000/mo.

As of January 2024, the median rent for a 1-bedroom apartment in Orlando, FL is currently $1,989. This is +3% higher than the national average. Rent prices for all bedroom counts and property types in Orlando, FL have increased by 7% in the last month and have remained the same in the last year.

Flexible Tax Laws

Investing in Orlando’s real estate market can help investors to lighten their taxes as Florida is one of the few states with no personal income tax. Its flexible tax laws are a blessing for investors, especially in this climate of a booming economy. Tax laws in Florida are considered to be the 4th friendliest laws in the country which is why a significant number of businesses choose to be based here.

Florida does impose a 5.5 percent corporate income tax. Orlando, owing to its friendly tax environment and affordable real estate can prove to be a vital opportunity for up-and-coming start-ups. Entrepreneurs and small business owners can rent showrooms and shops on better terms than most other cities and states.

Orlando is a Top-notch Tourism Center

Orlando has been boasting of economic stability since the beginning of the year 2018, and tourism growth and opportunities are some of the main reasons for its smooth expansion. Considered to be a “Theme-Park Capital of the World,” Orlando attracts most of its tourism due to the presence of Universal Studios as well as SeaWorld, and the most popular, Disneyland. In addition to this, Orlando’s beautiful beaches and warm weather also attract thousands of tourists every year.

Maybe you have done a bit of real estate investing in Florida but want to take things further and make it into more than a hobby on the side. It’s only wise to think about how you can and should be investing your money. In any property investment, cash flow is gold. Speaking about Orlando’s real estate market has a high potential for growth considering the current state of its economic expansion and population influx. This market currently has an ideal environment for US investors in housing properties, especially for turnkey real estate investments.

Good cash flow from Orlando rental property means the investment is, needless to say, profitable. A bad cash flow, on the other hand, means you won’t have money on hand to repay your debt. Therefore, finding the best investment property in Orlando in a growing neighborhood would be key to your success. When looking for real estate investment opportunities in Orlando or anywhere in the country, the generally accepted standard is to purchase a property that will give you a modest but minimum of 1% profit on your investment. An example would be: at $120,000 mortgage or investment cost, $1200 per month rental.

That would be the ideal equation for example. Even with rent increases, buying a $500,000 investment property in Orlando is not going to get you $5000 per month on rent. When looking for the best real estate investments in Orlando, you should focus on neighborhoods with relatively high population density and employment growth. Both of them translate into high demand for housing.

Here are the ten neighborhoods in Orlando having the highest real estate appreciation rates since 2000—List by Neigborhoodscout.com.

  1. Baldwin Park East
  2. Baldwin Park
  3. Southport / Lake Nona Estates
  4. Lake Fredrica North
  5. Azalea Park South
  6. Countryside
  7. Park Central
  8. Engelwood Park North
  9. Lake Buchanan
  10. Beacon Park

REFERENCES

Market Prices, Trends & Forecasts
https://www.orlandorealtors.org/marketreports
https://www.orlandorealtors.org/housingmarketnarrative
https://www.zillow.com/orlando-fl/home-values
https://www.redfin.com/city/13655/FL/Orlando/housing-market
https://www.neighborhoodscout.com/fl/orlando/real-estate
https://www.realtor.com/realestateandhomes-search/Orlando_FL/overview

Foreclosures
https://www.realtytrac.com/statsandtrends/fl/orange-county/orlando

Reasons to Invest in Orlando Florida
https://www.thebalance.com/the-best-places-to-invest-in-real-estate-4163978
http://www.noradarealestate.com/blog/best-cities-to-invest-in-real-estate-in-2018
https://www.mashvisor.com/blog/orlando-real-estate-market-new-investors
https://www.lee-associates.com/centralflorida/2018/01/15/5-reasons-to-invest-in-central-florida
https://news.orlando.org/blog/orlando-leads-nation-in-job-growth-four-years-in-a-row/

This post was originally published on 3rd party site mentioned on the title of this site

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