Zillow has almost completely said goodbye to its Orlando iBuying operations.
Three months after Zillow Group Inc. announced it would sell off the metro Orlando homes it owned, the Seattle-based company has sold at least 441 homes in Central Florida’s Lake, Orange, Osceola and Seminole counties, according to property appraiser data.
The move by Zillow meant more homes for sale in a tight and competitive Central Florida housing market. However, it also created opportunities for real estate investors to buy up properties and rent them to residents.
For example, one of the biggest local transactions by Zillow since it exited the iBuying business was the Feb. 10 sale of 33 Orlando homes to Progress Residential for $12.6 million, according to an Orange County deed. The Scottsdale, Arizona-based single-family rental firm, which paid $25.4 million for 68 of the 227 Orange County homes sold by Zillow from Nov. 2-Feb. 28, will convert them into single-family rentals, according to a statement emailed to OBJ by the company.
“Our plan for the homes acquired from Zillow is to renovate and place them back on the market for lease as quickly as possible to help meet the growing demand for high-quality, professionally managed homes in the Orlando community.”
Rental homes are gaining traction in metro Orlando, where single-family rental rates are skyrocketing. The local demand for housing from new residents moving to the region, paired with a shortage of homes to buy, contributed to Orlando’s 17.9% year-over-year single-family rent escalation in December, according to a Feb. 14 report by CoreLogic. Orlando ranked No. 3 among the 20 U.S. metros analyzed in the report.
Plus, real estate consulting firm RCLCO previously projected 13,000 single-family built-to-rent homes may rise in the region by 2030 due to ongoing demand.
It’s likely that the homes offloaded by Zillow will be targets for investors in the region looking to turn homes into rentals, Armel Real Estate Inc. broker and CEO Deanna Armel told OBJ. While housing of any kind is a need, converting single-family homes to rentals does little to alleviate metro Orlando’s diminishing supply of homes, she said. “It’s crazy how there’s not enough housing for all the people coming to the state of Florida.”
Zillow has moved quickly in winding down its Zillow Offers division. The firm is under contract to sell or has reached agreements on disposition terms for more than 85% of the homes it plans to sell nationwide, according to the firm’s fourth-quarter letter to shareholders. Meanwhile, Zillow will sell its holdings in Orlando and elsewhere “on the open market and listed traditionally,” according to a company statement emailed to OBJ.
The local residential real estate sector slowed from December to January, but it’s still a hot seller’s market. Existing home sales in January decreased 20.6% month-over-month to 3,033 sales, according to the Orlando Regional Realtor Association. Still, local home sales in January were up 11.2% compared to January 2021.
The median sales price sank 1.4% from $340,000 in December to $335,000 in January. Despite the month-over-month decline, the median price last month was 21.8% higher than the January 2021 median price of $275,000.
Local housing market trends 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.