Orlando housing market among fastest-cooling in Florida
Orlando was named the ninth-hottest housing market in the country at the start of 2022, but it's now listed as one of the metros where the residential real estate industry is cooling the fastest.
Orlando landed at No. 14 in a recent ranking of the housing markets slowing the most among the nation's biggest metros.
Orlando was the third-highest Florida metro on the list, behind North Port-Sarasota-Bradenton at No. 7 and the Tampa Bay area at No. 12.
The new study from SmartAsset, a financial information service, looked at housing data from Zillow (Nasdaq: ZG) on price reductions and indications of demand in 92 markets nationwide, comparing August of last year to August this year.
The national housing market that was booming a year ago, has sunk since, thanks in large part to soaring interest rates.
"New home buyers are becoming more cautious," Anja Solum, a data journalist at SmartAsset, said in the report. "Rising mortgage rates and declining home sales have signaled the end of a hot housing market."
SmartAsset's report included factors such as as the percentage of housing listings in a market that had cut their prices, the average price cut compared to average home value and the ratio of houses sold to new listings.
SmartAsset created an index for each of the eight data points it included in its study, then combined them into two broad categories — price changes and demand changes — of four data points each. To find the coolest markets, it averaged those two scores.
Metro Orlando performed worst in the price change category, scoring 73.45 out of 100. The metro posted a decreased demand score of 69.52.
Local real estate agents are having mixed experiences in the market. Many agents say updated homes in attractive neighborhoods continue to draw premium prices, and others say price cuts are increasingly common.
That includes Peter Luu, CEO of Peter Luu Signature Group by Exp Realty, who said price cuts happen in Orlando every day, but that's mostly a reaction to the price boom of the past year. "The list prices were inflated to begin with."
Price reductions often happen in response to houses taking longer to sell.
That's what Armel Real Estate Inc. owner Deanna Armel said she's witnessing as interest rates, high prices and an uncertain economic outlook spook buyers. "I listed $25,000 below market value on two houses, and neither have sold. They're in good locations, good shape. I’m just beside myself at what I'm witnessing at this price point, under $500,000."
Of course, price cuts may be a sign of a slowing housing market, but they're also a bright spot for buyers, said Mainframe Real Estate agent Anne-Marie Wurzel. "Before, sellers were feeling great, and buyers were paying $50,000 over list price."
Fellow Central Florida market Daytona Beach also ranked high on the list at No. 19. The Palm Bay metro was not included in the study.
The coolest market in the country right now, according to the SmartAsset study, is Boise, Idaho. The second and third coolest are Austin, Texas, and the Phoenix area.
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