ORLANDO – Before the devastating Pulse shootings in June shocked both Orlando and the entire nation, the city’s real estate market was demonstrating its greatest level of strength in years.
Both home sales and the median price of a house were up in May, according to the Orlando Regional Realtors Association’s monthly report. That indicates the housing market will continue its upward climb throughout the rest of this year, despite concerns generated over the Pulse attack.
The report indicated that sales of existing homes in the Greater Orlando area, which includes Lake, Orange, Osceola, and Seminole counties, were up by 5.83 percent compared to May 2015. Broken down by county, those sales were 7.46 percent higher in May compared to May 2015 in Lake County; 4.13 percent higher in Orange; 6.38 percent higher in Osceola; and 8.40 percent higher in Seminole.
In the city of Orlando, the median price of homes sold during the month of May increased more than 12 percent compared to May 2015. More significantly, the median price of a home in Orlando went above $200,000 for the first time since August 2008. That’s a significant number, since the summer of 2008 was when the last housing boom ended, and Florida’s housing market took a major tumble. Home sales virtually dried up, foreclosures soared across the region, and the Sunshine State ended up with one of the highest foreclosure rates in the nation.
The state has been on a slow but steady improvement for the past four years, and May’s report offered every indication that low interest rates and a growing population in the Central Florida region was helping the market operate at a very strong level.
The overall median home price in May was $203,000. That represents a 12.15 percent jump compared to the median price in May 2015, when it was at $181,000. May’s number is also 5.73 percent higher than the median price of $192,000 in April 2016.
As the ORRA noted in its report, “The Orlando median home price has now experienced year-over-year increases for the past 58 consecutive months,” and that in May, “the median price is 75.76 percent higher than it was in July 2011.”
Different sectors of the housing market – including single family homes and condominiums – experienced a healthy rise in prices throughout May. The median price of single-family homes went up 10.68 percent compared to May 2015. The median price of condos increased by an even larger amount, 15.29 percent. Members of ORRA sold 3,333 homes that closed in May 2016, and that was 6.93 percent higher than a year ago, and 5.08 percent above the April 2016 figures.
Sales were boosted, ORRA noted, by historically low interest rates.
“The average interest rate paid by Orlando homebuyers in May was 3.62 percent,” the ORRA report noted. “Last month, the average interest rate was 3.63, while this month last year homebuyers paid an average interest rate of 3.92.”
The one wrinkle in the market now is inventory of available homes, which is low. The number of homes available to purchase in May was 10 percent lower than a year ago, although the number was up slightly, by 1 percent, from April 2016.
“The inventory of single-family homes is down by 9.08 percent when compared to May of 2015, while condo inventory is down by 16.64 percent. The inventory of duplexes, townhomes, and villas is down by 11.98 percent,” the report noted.
Despite that, Freddie Mac, the Federal Home Loan Mortgage Corporation, reported on July 1 that Orlando’s housing market had posted the biggest year-over-year gains in April. The agency’s Multi-Indicator Market Index showed Orlando’s housing market improved by 20.17 percent compared to 2015. The agency also noted that Florida was the state with the highest year-over-year improvement in its real estate market, which was up 15.35 percent.
The extensive worldwide media coverage of the mass shootings on June 12 at Pulse, a gay nightclub near downtown Orlando, is not expected to have a negative impact on the Orlando area economy, either in the housing market or within the critical tourism industry. Both are viewed as strong enough to withstand the coverage of the shootings that left 49 people dead, and another 53 wounded.
The shooter, Omar Mateen, was later killed by Orlando Police.
The Orlando area has been helped by an improving jobs market. CareerSource Central Florida, the state’s employment agency, reported that in May, Central Florida’s unemployment rate was down compared to a year ago, and well below the national average of 4.7 percent. In Orange County, the unemployment was 3.8 percent. It was only slightly higher in Lake County (4.3 percent) and Osceola County (4.4 percent).
In addition, the state reported that the Orlando-Kissimmee-Sanford area had the highest annual job growth of all of Florida’s metro areas in several categories, including leisure and hospitality. That industry created 13,000 jobs in May.
Michael Freeman is an Orlando journalist, playwright and author of the book “Bloody Rabbit”. Contact him at Freelineorlando@gmail.com..