ORLANDO – The housing market in Orlando has been on an upswing this year, with both sales and home prices increasing.
But now there are questions on whether the Brexit vote will bring some decidedly chillier winds to the market.
“You’ve got two main areas where it’s going to affect us here,” said Justine Assal, who organizes the annual BritWeek celebration in Orlando. “One is the tourism, and the other is the real estate market.”
On Thursday, residents of the United Kingdom voted 52-to-48 percent in favor of exiting the European Union, which the country had been a part of for 43 years.
Britain’s vote quickly battered the British pound, which dropped more than 11 percent Thursday night into this morning.
That weakening of the pound compared to the U.S. dollar means the cost of a vacation in Orlando, from hotel rooms to meals and theme park tickets – suddenly got more expensive. It also means the price of a home is more expensive as the pound drops, Assal said.
“The British always purchased a lot of real estate here,” she said. “When you look at the real estate companies here, so many have popped up around Clermont and Davenport and the Four Corners area. In a big way that is driven by British pounds coming over here and Brits coming with tour operators to stay in the homes, and there is going to be a huge impact on that until the currency stabilizes.”
The Brexit vote came at a time when Orlando’s housing market has been gaining strength. The Orlando Regional Realtors Association reports that in May, Orlando home sales rose 7 percent, while the median price jumped 12 percent to $203,000.
ORRA noted in its May Housing Report that the median price “crossed the $200,000 mark for the first time since August 2008,” and that sales went up even though the inventory of homes available on the market continued to slide downward.
“Orlando’s inventory of available homes is 11 percent below where it was this time last year and continues to impact both sales and price,” ORRA’s president, John Lazenby, noted in the report. “Regardless, we are seeing a small trend of increasing sales that illustrates buyer enthusiasm for our current historically low interest rates and steadily rising values.”
What’s not clear is now the Brexit vote will impact sales of Central Florida homes by British investors and second home buyers – a fairly substantial part of the region’s housing market, Assal noted.
“We are a resort lifestyle here,” said Assal, who came to Orlando from her native Britain to run ORB International, which organizes BritWeek.
“We have a very attractive lifestyle, and I think investors looking here will buy multiple properties sight unseen,” she said. “Much of the time when people look at buying vacation homes in central Florida, they are making an emotional purchase. It makes sense logically.”
That’s because so many British residents love the Orlando area and the lifestyle options it offers, she added.
“A lot of those people came over originally to come on vacation,” Assal said. “We’ve got a great standard of living here and a great cost of living here, so they stayed. Many decided to go down the road to getting an immigration visa so they could open a business. Once the money has already been exchanged over here, they should be relatively okay because they’re now on the U.S. system.”
But she also expects some owners of Orlando area homes to consider selling after the Brexit vote.
“You’ve got a lot of people who have already purchased and may look to sell,” she said. “You’ve got tons of Brits who own property here, and for some it would make sense to move their currency back to the pound, and it doesn’t make sense to transfer that to dollars.”
It marks a radical shift, she said, from how the British have seen Orlando area real estate values for decades.
“The perception has been there’s nothing safer than having your money invested in U.S. dollars and in bricks and mortar,” she said. “Usually when people from around the world purchase here it’s a mixture of lifestyle and investment. But if you reach a point where people are too uncertain, they tend to stop spending. You can lose the balance of it.”
Michael Freeman is an Orlando journalist, playwright and author of the book “Bloody Rabbit”. Contact him at Freelineorlando@gmail.com..