What is happening in the Orlando real estate market? Should you buy a home now? Let’s break down what we expect to see and are already seeing in this 2022 market. From multiple offers to what is driving the market, Tom Nickley dives into what he is seeing in the current market.
Check out Tom’s full video on what’s happening in the Orlando Real Estate market here.
Multiple offers to buy a home.
You don’t have to know a lot about the real estate market to know this has been one of the craziest markets we have seen. In January we witnessed the most competitive market since the beginning of the pandemic. Seven out of ten new listings as they hit the market received multiple offers, throwing it into a bidding war. Particularly in Orlando, it was ranked the fourth busiest market in the entire country. Showingtime tracks all listings and how many showing requests that home receives. Orlando had the fourth most showing requests per listing compared to the rest of the country. This means that the market is saturated with people looking to buy a home.
So what’s driving this housing market?
Interest rates are on the rise. A few months back, we saw interest rates in the low threes, to now hovering around 3.8-4%, with predictions that they will continue to rise throughout the year. With this rise in rates, we start to see buyers who were watching from the sidelines, start to rush the market so they can lock in a low rate and a price before they start to increase. On top of all this, the market is still super healthy. It is still a great investment. With the way prices of rent keep increasing, it still makes sense to buy.
It is still a seller’s market, the good news is that we are starting to see more listings hit the market. We saw an increase of 28% new listings hit the market in January compared to December 2021. The bad news is that those listings are getting snatched up faster than ever before. The average home here in Central Florida went under contract in under 19 days. This is the fastest we have ever seen homes sell. Most homes, about 70% of homes, are selling in the first week of them hitting the market.
The perfect storm.
Because this market is so competitive, with the increase in interest rates and more homes hitting the market and going under contract so quickly. We are seeing the lowest numbers of homes for sale. In January 2021 there were 4,500 homes available for purchase. February 2022 only had about 2,400 homes available. This market is the perfect storm of
- Low-interest rates rising
- More listings
- More buyers
- More offers
- Lower inventory
For these reasons, it is keeping the market hot. For these reasons above, makes the market a little bit more competitive. We still see all this as a positive thing for buyers and sellers. For sellers, you’re calling the shots when you have multiple offers. Most of the time we see offers for well above the list price with really strong terms. We’re able to negotiate really good deals for our sellers. As for those looking to buy a home, it’s still a super great market. Interest rates are still very low compared to previous years so that helps offset the higher prices. There are two things that help determine the affordability of a home. First, the sales price of the home, and second the cost to finance it. So while the price of homes is up, the cost it is to finance them is still historically low.
As always, we would like to extend our knowledge and expertise in the housing market to you. Please feel free to give us a call, shoot us an email and follow us on social media to ask us any questions you may have on this market.