Guide For Your Dream Home in Orlando-An Overview of Real Estate Trends 2021

Real Estate in Orlando

Home to a warm climate, sunny beaches, Walt Disneyland, Universal Studios, and SeaWorld, Orlando is the largest city in the state of Florida and 73rd largest city in the US. With job seekers, students, and retirees flocking to Orlando, the housing supply is dwindling compared to its demand.

The high quality of life at a reasonable cost has been profitable for investors with the trend forecasted to continue into 2021. Dubbed the “City Beautiful,” Orlando is steadily climbing its way into post-pandemic recovery. Here we talk about the market trends for real estate in Orlando and what makes it a great place if you are looking to buy your dream house.

Orlando Real Estate Market Trends 2021

The Orlando housing market is remarkably competitive, with homes selling within only 13 days as compared to 21 days last year. Moreover, the average selling price is $311K, which is up by 13.1 percent over last year as per the national real estate brokerage, Redfin. A staggering 1,351 houses sold this year, up by 8.3 percent from last year with hot homes pending within 4 days and selling for 3 percent above listing price.

Orlando Housing Affordability 2021

Following the trends of low supply and high demands for housing, the first-time homebuyer affordability index fell from 90.37 to 88.99 percent last month. To give you an idea of what this means, an affordability index of 90 percent means that buyers are 10 percent short of the state-reported median income to purchase a median-priced home, whereas if it is over 100 percent, you make more than the required amount to purchase a house.

Orlando Home Listing Prices 

Now let’s briefly discuss home prices in Orlando. The May 2021 report from Realtor.com states that more people are buying homes in Orlando than are available, making it a seller’s market.

  • The median list price of homes in Orlando, FL was $305K, trending up 9.6 percent year-over-year.
  • The median listing price per square foot was $184.
  • The median sale price was $300K.
  • Sale-to-list price ratio: 100 percent—a seller would always prefer scenarios that can yield a ratio of 100 percent or higher while a buyer would prefer a sale to ask price ratio that’s closer to 90 percent.
  • With a median listing price of $130K, South Semoran is the most affordable neighborhood.
  • With a median listing price of $599K, Lake Nona South is the most expensive neighborhood.

As already mentioned, Orlando is a hot seller’s real estate market and will likely remain so for another 12 months, if data from Orlando Regional REALTOR® Association (ORRA) is to be believed.

Housing Supply & Inventory

Orlando housing supply indicators show high rental vacancy rates and excessive multi-unit housing permits, which should be taken into consideration before you invest.

There is a national inventory shortage, with Orlando showing a 61 percent fall year-over-year. The average time to sell all of the inventory in Orlando as of July 2021 is just three weeks, whereas the national average was 1.24 months. This is an indication of high demand for property from buyers without enough inventory.

Additionally, the record low mortgage with the 30-year fixed rate being 2.98 percent (3.16 percent in 2020 and 3.80 percent in 2019) also adds to the attraction of the property. Nonetheless, it is still quite difficult to buy homes in this strong seller’s market. On the contrary, initiatives like We buy houses in Orlando by SP Homes LLC are helping owners sell houses quickly in any condition with no hidden costs.

Orlando Median Home Sales Price 

In accordance with national trends, the median home price in Orlando has risen a staggering 18.8 percent in the last year. Still, with a median price of just $335,000 as of July 2021, price points in Orlando are still far below the national average, which measured $386,000 in July. Here are a few other relevant stats for housing property trends in Orlando:

  • The median price for single-family homes rose by 23 percent year-over-year.
  • Condos also saw a significant change in price from year to year (+14 percent).
  • For duplexes, townhomes, and villas, the median price was up 21 percent from last year.

Now before you are discouraged by these stats, house owners can still make profit through property in Orlando. The renting price in Orlando is also on the rise (14 percent) although not as high as the sales price (18 percent). With a rent price of $1,758 and optimum location, houses in Orlando are an ideal deal for buyers.

Yearly Housing Sales Comparison

Real estate in Orlando has seen a slow but steady post-pandemic recovery with rising home sales by 19 percent this May compared to last year and a 16 percent year-over-year rise in the number of new houses for sale. Let’s go through some stats of housing sales primarily in the Orange and Seminole counties:

  • A total of 3,872 properties were sold in May 2021 compared to 2,127 last year, a 15.43 percent
  • Townhome/villa sales showed a 131 percent
  • Single-family home sales showed a 63 percent
  • Condo sales were a staggering 206 percent higher than last year.

Orlando Real Estate Market Focus 2021-2022

Why You Should Invest in Orlando

Population Growth 

As the housing inventory hints, the population growth in Orlando and neighboring suburbs is at an all-time high and expected to keep this trend. These stats only prove why Orlando is one of the fastest growing cities in the US:

  • The population of Orlando has seen a rise of 48,600 people since 2010
  • Last year recorded over 2.5 percent population growth in the Orlando metro area, i.e. Orange, Seminole, Lake, and Osceola, where already 2.6 million residents live.
  • An estimated population of 5.2 million is expected by 2030 as per Orlando Economic Partnership.

Job Market

Given the high availability of service and hospitality jobs primarily at Disneyland, AdventHealth, and Universal Studios, it is no wonder the rental property demand is high.

The thriving tourism industry is also responsible for a large number of jobs in Orlando. Now with all businesses cautiously opening again, the unemployment rate in Orlando is at 6 percent.

The employment rate is expected to grow by 19 percent with 500,000 new jobs to be added by 2030. Manufacturing and construction, home and healthcare services, computer systems design, and engineering and transportation are some of the top sectors projected to create employment opportunities. Here is a list of companies under respected sectors:

  • Engineering, manufacturing, and aerospace: Lockheed Martin, General Dynamics, Mitsubishi Power Systems, Siemens, AT&T, and Boeing
  • Defense: United States Army Research, National Center for Simulation, Patrick Air Force Base, and Cape Canaveral Air Force Station
  • Entertainment: Disney’s Magic Kingdom, Universal Studios, Disney’s Hollywood Studio, SeaWorld Orlando, Disney’s Animal Kingdom, and Disney’s Epcot Center
  • Residential areas and parks: Creative Village Innovation District and Central Florida Research Park are large areas with opportunities for education, business, and employment.

Profitable Renter’s Market

Considering the growing population, job opportunities, educational institutions, and affordable property prices, it is no wonder that Orlando is a rental property heaven. The sunny weather and no state income tax protocol only sweetens the deal.

Some key stats about rental property

  • Rents went up by 2 percent over the past year in the metropolitan area.
  • About 45 percent of houses are rented.
  • Rents less than $1,000 monthly account for only 11 percent housing units.
  • About 53 percent of renters pay between $1,001 and $1,500 monthly, whereas 36 percent pay higher than $1,501.
  • Even the average rent of the most expensive neighborhoods like Lake Shore Village, Palomar, and Spring Lake is $1,943 monthly.

The average rent being less than national average ensures low rental vacancies, so property owners are more likely to have their properties rented. This creates a win-win situation for both tenants and landlords. 

Flexible Tax Laws 

Having no state income tax, as we have previously mentioned, has made Florida a hub of booming businesses and eager investors. The 5.5 percent corporate income tax has attracted small businesses and startups, which is further good news for rental property owners looking to rent out places for showrooms and offices.

Tourism Opportunities

Thanks to its warm, sunny beaches, Disneyland, SeaWorld, and Universal Studios, making it the “theme park capital of the world,” Orlando has no shortage of visitors, and this is only expected to go up once the world returns to normal.

A good cash flow is key to a profitable rental property. If you are thinking about investing in Orlando, your best bet is a booming neighbourhood with high job rates and population density. The rule of thumb to purchase property is one that will give a minimum 1 percent profit on your investment.

Here are top 13 neighbourhoods with high appreciation rates:

  • Kissimmee
  • Winter Park
  • Thornton Park
  • Shiloh / Dummit Grove
  • S Semoran Blvd / Curry Ford Rd
  • Boggy Creek Rd / Dowden Rd
  • Manatee St / Hoffner Ave
  • Omara Ct / S Goldenrod Rd
  • E Colonial Dr / Barton Dr
  • S Goldenrod Rd / Curry Ford Rd
  • Dorado Ave / San Juan Blvd
  • Stonecastle Rd / Thrippence Ln
  • U of Central Florida / N Tanner Rd

Student Housing Opportunities

Home to renowned colleges like the University of Central Florida, Valencia College, and Seminole State College of Florida, educating over 64,000 students yearly, there is plenty of potential for student housing, and investors can look into rental properties for short-term rentals.

Conclusion 

According to a survey, 86 percent of residents answered positively with comments like “excellent” or “very good place to live” when describing Orlando. And it’s no wonder, given that Orlando is one of the most ethnically diverse cities in the US, with rich history, entertainment opportunities, and booming education and job sectors. Investors and homeowners alike are looking into buying and renting property in Orlando given its immense growth potential. We hope that through these pointers we can present to you a comprehensive guide to help you make a well-informed decision before investing your money in Orlando real estate.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.