Home prices in the Orlando metro area hit a new high in June, signaling that the market is still hot for sellers, although sales are down and inventories have jumped significantly for the second month. consecutive.
The median home price reached $387,000, the fifth new high in as many months and a 22.9% increase from the same period last year, according to the latest report from the Orlando Regional Realtor Association.
The association reviews sales from Orange, Osceola, Lake and Seminole counties.
The supply of homes for sale also increased, up 41.2% from May to 5,437, the second month in a row inventory rose more than 40%. That brings inventory to 1.43 months of homes, the first time the region has seen more than a month’s supply since February last year.
A market is considered balanced when it has a six month supply.
Interest rates hit 5.5% in June, the highest in Orlando since 2008, and the Federal Reserve has already raised rates. Sales were down 3.9% from May, down from 14.1% a year ago.
“While this is still a seller’s market, we continue to see signs that the market is starting to stabilize, which is good news for buyers,” said Tansey Soderstrom, president of the ‘association.
Greg Phillips, chief technology officer at real estate firm Houwzer, says inventory has started from such a low number that even a substantial increase won’t match the demand that is driving up prices.
“It went from very low to very low,” he said. “We were basically down to nothing, and now we’re at the thinnest layer of inventory. There’s never going to be a price drop with such low inventory.”
New listings rose 11.3%, but Phillips says the real increase in inventory is caused by lower sales, partly caused by rising interest rates. “I think people are revising what they think they can afford,” he said.
Rising interest rates are not likely to deter people from leaving states with higher property values than Florida. “We’re still seeing the effects of offshoring,” Phillips said. “There are still a lot of buyers there.”
Investors are also continuing to buy at a record pace, which Phillips predicts will continue, especially if inflation remains elevated. “Real estate is seen as a safe haven for investors,” Phillips said. “Unless we start to see a high cost of capital for investors, they’ll probably be there.”
Overall, Phillips thinks the market is starting to stabilize, although that will leave prices high. “We may be seeing a normalization of prices,” he said.
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