Orlando Market and Affordability

Real Estate

Orlando Market and Affordability

As we’ve seen over the past year, the Orlando market has been very crazy for home buyers and sellers. Interest rates have gone up from 3% in 2021, to 5-6% in 2022. However, this doesn’t mean that now may not be the best time to buy a home. What opportunities are there for those that wish to buy or sell a home now, or in the near future?

Interest Rates

It may be a surprise that in only a year the interest rates have gone up 2-3%, from 3-3.5% to about 6% in just one year. If you look over the past five years, however, the average interest rates are around 5-6%. What makes this seem like such a big jump is really looking at the difference between this year and last, when in reality these rates are about average.

When it comes to home prices, the average home in Orlando is roughly $400,000. This is about 35% higher than what you would have seen two and a half years ago. In turn, this means that you’re spending $800 more on the average home than you would have about a year and half ago.

So do you make that move or sell your home in Orlando? Interest rates are just one of the many things to think about when asking these questions.

Image: Bhautik Joshi

New Construction

In prior years, building new construction would usually mean paying over asking price, while also having an open timeline with an unknown completion date. Now, there are so many options when it comes to the benefits of buying new construction. Due to the slowdown in demand, construction companies are now offering incentives such as adjustable closings and locked-in interest rates as well.

Asking Price and Affordability

What’s great about the current market is that buyers are typically not having to go more than $15K over asking price. This keeps more money in your pocket, and doesn’t force you to have to liquidate assets just to purchase a home. In today’s market this is definitely a win in contrast to last year when homes were going for tens of thousands over asking.

Prices and Uncertainty

You may be thinking about the uncertainty of the Orlando market, and how prices keep rising, and this causes hesitation in purchasing. However, what if you find your perfect home at a price you can afford, and then you see it rise in price in the next year or two?

Whether you purchase a home now or in five years, if you put money down on a home today then you’re locked in to those prices. As housing prices climb, you will be grateful to know that your rate remains the same.

Image: Pictures of Money

When Does the Real Estate Bubble Finally Crash?

We can never really know exactly when the market is going to rise and fall, but looking back at the crash in 2008’/09’ we can determine a few things. In contrast to the past, there are more individuals with more equity today than ten to fifteen years ago. On top of this, we had a job crisis the past year that left us with the highest percentage of unemployment than we’ve seen in decades. With all of this in mind, we don’t see a huge crash happening anytime soon, but rather a rise from 3-5% within the next year or so.


Overall

There is no way to predict exactly what can and will happen with the market in Orlando in the future, but we can utilize the knowledge we have now to make a thoughtful decision. If you and someone you know is looking for a home, or looking to sell, and has questions, please reach out to The Pozek Group! We are a resource and would love to construct a plan that’s best for you and your family.

The Orlando Real is sponsored by The Pozek Group. If you’re thinking of buying or selling a home in Orlando, reach out and we would love to help!


Check out some of our other articles on buying a home in Orlando!

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