The pace of people moving to Central Florida seems to outpace the addition of new homes, but a recent report shows that’s been the case for the past decade.
Between 2010 and 2020, metro Orlando added two jobs for every house built, according to a June 8 report from housing listing and data site Apartment List.
However, metro Orlando was on the upper end of that range last decade, and the influx of new residents to the region may be accelerating. That’s one reason the median Central Florida home price skyrocketed 140% between January 2010 and January 2020, according to the Orlando Regional Realtor Association. The median price continues to climb, hitting a record high of $300,000 in May.
The addition of new jobs and residents puts pressure on the local supply of homes, which has not kept up with demand. The region boasted a 0.73-month supply of existing homes in May, far below the six months of supply indicative of a balanced housing market. Home supply is down 61% since May 2020, according to the Realtor association.
This leads to bidding wars over listed properties and higher prices. For example, it is common for buyers in the Lake Nona area to offer more than a home’s value and be willing to put up money to bridge an appraisal deficit, Armel Real Estate broker and owner Deanna Armel told OBJ. “It’s truly a war zone for buyers right now.”
Plus, the migration of buyers from the higher-cost Northeast and West Coast to Central Florida raises prices even further — or knocks some local house hunters out of contention, said John Javier, Bank of America’s area lending manager for Orlando. “Our borrowers are competing against wealthy people trying to get out of New York and California, offering cash. For a seller, cash is king.”
Meanwhile, new home construction has fluctuated in the past year as homebuilders try to keep up with demand but face challenges ranging from shrinking land supply to rising material costs. The value of residential construction started in April in Orlando was $692 million, up 80% from April 2020, according to Hamilton, New Jersey-based Dodge Data & Analytics. It improved 28% from $539 million in March.
Still, counties across the U.S. saw relatively low levels of home construction in the past decade, according to Apartment List’s report. The homebuilding industry likely has been behind since the housing market crash more than a decade ago, PulteGroup Inc. North Florida Division President Clint Ball previously told OBJ. “As many homes are being built, we’re not building enough. We didn’t build enough as an industry for the greater part of over a decade.”
Trends in the residential real estate market are important, as every home sale in the state has an estimated local economic impact of $90,300, according to the National Association of Realtors. In addition, the housing market often is considered a reflection of the local economy’s overall health.