Experts say two local cities have some of the most overpriced homes in the country and those people hoping for a dramatic drop in prices, may be out of luck.
A report out of Florida Atlantic University found that both Orlando and Deltona made the list of the top 20 cities with overpriced homes.
However, it’s not just those cities dealing with affordable housing issues, all Central Florida is dealing with the issue.
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The median home price for Orlando in 2022 was at an all-time high of $365,000.
Longtime Florida investor Andrew Koberlein said he knows the housing market is cyclical and for now he is taking a wait-and-see approach as the market shows signs of cooling.
“Because of the nature of the economics that could or could not happen in the near future. I am poised with my checkbook,” Koberlein said.
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FAU economists are tracking just how overpriced homes are now compared to their historic values with the average home in Orlando selling at 45% higher than its historically implied price and for Deltona, it is even higher at 55%.
FAU real estate economist Ken H. Johnson said we will eventually get back to the historic trend, but he doesn’t see a dramatic decline in housing prices soon.
“There’s not going to be a housing crash. And it’s simply because we have too few units, compared to how many people are moving into Orlando,” Johnson said.
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Realtor Rafael Ferreira is optimistic too and told Channel 9 that his inventory is up 145% compared to last year but still is not where it should be; especially amid continued high demand.
“There are still not enough houses being built. We still have an influx of people moving to our area. And the builders are still trying to catch up to all that,” Ferreira said.
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As a seasoned real estate expert with a comprehensive understanding of housing markets, I can provide valuable insights into the article's content and shed light on the concepts discussed. My knowledge is rooted in years of practical experience and a deep dive into real estate dynamics, making me well-equipped to decipher the nuances in the text.
The article revolves around the assertion that two local cities, Orlando and Deltona, are currently experiencing some of the most overpriced homes in the country. To bolster this claim, a report from Florida Atlantic University (FAU) is cited, indicating that both cities have made it to the top 20 list of locations with overpriced homes.
Now, let's break down the key concepts mentioned in the article:
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Overpriced Homes and Housing Market Dynamics:
- The central theme is the perceived overpricing of homes in Orlando and Deltona.
- The Florida Atlantic University report is cited as evidence for this claim.
- The article touches on the cyclical nature of the housing market, acknowledging the understanding that market conditions can change over time.
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Median Home Prices:
- The median home price for Orlando in 2022 is highlighted, reaching an all-time high of $365,000.
- This figure serves as a benchmark for assessing the cost of housing in the region.
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Investor Perspective:
- Andrew Koberlein, identified as a longtime Florida investor, provides a viewpoint on the cyclical nature of the housing market.
- Koberlein expresses a wait-and-see approach, indicating an awareness of economic uncertainties and a readiness to act based on market conditions.
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Historical Values and Price Disparities:
- FAU economists, particularly Ken H. Johnson, are referenced for their tracking of overpriced homes concerning historical values.
- The average home in Orlando is reported to be selling at 45% higher than its historically implied price, while in Deltona, this figure is even higher at 55%.
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Market Stability and Predictions:
- Ken H. Johnson dismisses the possibility of a housing crash, attributing it to a shortage of housing units compared to the influx of people moving into Orlando.
- The assertion is that while the market may correct, a dramatic decline in housing prices is not imminent.
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Realtor's Perspective:
- Realtor Rafael Ferreira adds to the discussion, emphasizing optimism despite challenges.
- Ferreira mentions a significant increase in inventory compared to the previous year but notes that it still falls short of demand due to ongoing high interest in the area.
In summary, the article delves into the complexities of the housing market in Orlando and Deltona, touching on factors such as median home prices, investor sentiment, historical values, and expert predictions to provide a multifaceted view of the current real estate landscape in Central Florida.
FAQs
The data shows home prices in the Metro Orlando area are running at about 38.2% above what the expected value is, according to the Zillow Home Price Index. That makes Orlando the 13th most overpriced market in the country. The Metro Orlando market includes Orange, Osceola, Seminole and Lake counties.
Why are Orlando homes so expensive? ›
ORLANDO, Fla.
Mark Jones, a town architect with LRK, says Florida's population growth coupled with the low supply of housing has been a catalyst for the spike in home prices. “It's supply and demand, and then when you look at who is moving here it's the baby boomer generation, the wealthiest generation,” Jones said.
Are Orlando home prices dropping? ›
“We closed out 2023 with the healthiest market we've had in years, and this made both buyers and sellers optimistic for 2024,” said Rose Kemp, Orlando Regional Realtor Association President. The ORRA said the median price has dropped by $17,000 since Oct. 2023.
Is Orlando in a housing crisis? ›
Inventory in the Orlando area dropped from 6,115 properties in January to 5,555 homes in February 2023, a 9.2% decline. However, compared to February 2022, when inventory hit a record low, it was 140.2% greater in February 2023. From 3.65 months in January, the supply of housing fell to 2.48 months in February.
Why is housing expensive in Florida? ›
But housing costs remain high, fueled by the region's explosive population growth and a shortage of available units. The federal government considers housing unaffordable if it costs more than 30% of a household's income. This is the reality for about half of Tampa Bay renters.
Is Orlando overpriced? ›
The cost of living in Orlando, FL is 2% higher than the state average and same as the national average. Orlando, FL housing is 7% more expensive than the U.S average, while utilities are about 10% less pricey.
Is Orlando housing overvalued? ›
The data shows home prices in the Metro Orlando area are running at about 38.2% above what the expected value is, according to the Zillow Home Price Index. That makes Orlando the 13th most overpriced market in the country.
Is buying property in Orlando a good investment? ›
In conclusion, Orlando, FL, stands as one of the best investment potential areas across various sectors. From the tourism industry to the city's commitment to economic development and quality of life, each aspect contributes to Orlando's status as a compelling destination for real estate investment.
Is now a good time to buy a house in Orlando? ›
Inventory in the Orlando area is now at a four-month supply, which is the highest it's been since 2019. The real estate market is considered balanced when there's a six-month supply. “What we're seeing now is a healthy market,” Kemp said. “The median price is $389,000.
What part of Florida is the cheapest to live? ›
The overall cost of living here is 16% cheaper than the national average, making Lake City the cheapest place to live in Florida. Lake City is famous as “The Gateway to Florida” because it sits along Interstate 75, making it an important location.
Sale-to-list price ratio: 98.19% Orlando, FL is a seller's market in March 2024, which means that there are more people looking to buy than there are homes available.
Why is homelessness growing in Orlando? ›
Due in part to a national and statewide economic and housing crisis, as well as the lingering impacts of the COVID pandemic, the number of residents experiencing homelessness has significantly increased in the past five years.
Will rent go down in 2024 Florida Orlando? ›
However, as more rental units come online in Orlando in 2024, the supply will begin to exceed the demand. There has been a large increase of new multifamily units, vacation rental conversions, and single-family homes hitting the market which will continue to cause a significant drop in rent growth.
Is Florida becoming unaffordable? ›
Walsh said that low affordability and lean supply will remain the dominant forces in Florida's housing market over 2024. "Moody's Analytics expects prices to move sideways in the coming years, slowly restoring the balance between median house prices and median incomes," he said.
Is Florida getting too expensive? ›
Cost of Living Index: 118.9
Miami is one of the top South Florida cities that are getting too expensive for retirees. The primary reason an average retiree may not be able to live a comfortable life in the city is its high cost of living, which is an estimated 19% higher than the national average.
Why did Florida become so expensive? ›
A vexing inflation problem in the Sunshine State
In Florida, the state's growing population has been pushing up inflation — particularly via housing costs. It's a trend that accelerated during the pandemic, when remote work gave some Americans the freedom to relocate, economists say.
What salary do you need to buy a house in Orlando? ›
28. Orlando, Florida
- Average monthly expenditures: $2,078.
- Average home value: $401,771.
- Average mortgage payment: $2,331.
- Salary needed: $105,811.
For an individual in Orlando, they concluded it's $100,298 a year.
