Central Florida market— thoughts??

Question

Greetings,

I’ve been thinking about a move to Orlando or one of the suburbs for at least 10 years now..as we all know life happens and I was never able to make that commitment and proceed forward. I’m getting this urge again this year, but my concern is buying a primary house at the peak of the market… the houses I’m interested in were selling pre Covid between 350to450 and their prices are now 550-650…

And of course the higher interest rates are not helping in this case neither..

What are your thoughts? Wait it out or just pull the trigger? I went to visit the area last week and I see a lot of new construction going on.. I am also noticing a lot of price decreases on some listings.. I’m interested to hear some perspectives.

Tyler Gibson · Answer

Central Florida has a positive net migration pattern. This means that more people move here than move away. Because of this pattern, it is unlikely that this market will see any significant decrease in property values. Interest rates might go down, but they might go up. There are some price decreases happening, but usually, those are the homes that were overpriced, to begin with. The market is healthy here, where a correctly priced home in good condition will sell quickly. I think values will continue to climb, and if rates come down in the future, you can always refinance.

Huso Akaratovic · Answer

@Samuel Leatherwood thank you for the input.. I was visiting Oviedo, Clermont, winter garden, lake Nona.. I’m narrowing it down between winter garden and Oviedo… we need great schools and everyone is saying we shoulD choose oviedo. We kinda like winter garden better and the schools are pretty good there as well. As far as the buy down interest rates, those are only for new construction. I’m not sure if I want to wait 8-12 months for the house to be built.

Shawn McCormick · Answer

@Huso Akaratovic

Hey Huso, you should just pull the trigger, what's holding you back? Are you happy where you are, what are the pro's/con's? If you wait for something to happen in Orlando, the same thing will likely be playing out where you live and you'll have to sell your current home for less just to get something here. Prices are normalizing to pre Covid levels, that doesn't mean there is a crash or a bubble that is going to burst and with the amount of people moving here, prices are only expected to increase overall. We have had over a decade of double digit appreciation, so the longer you wait, the more yo will pay (in the Orlando market at least).

As far as rates go, the general feeling is that they will come down..and you can always refi out of the rate you get..some lenders are offering free refi's until xx-xx-xxxx if you buy now. You can make part of your offer to buy a permanent rate buy down, rather than a 2/1 rate buy down (not a fan of those really).

Price decreases that you are seeing are generally sellers that still think the market is 2021 and they can ask whatever they want or uneducated agents that don't know how to price a home to sell, we got thousands of new agent jumping in when the market was good and they didn't have to learn any skills, just list it for whatever the sellers wanted. I would say that builders have been adjusting prices if they have inventory of homes that are completed or nearly completed to get them off of their books. Empty houses generally mean a motivated seller (they are paying taxes, insurance, HOA, and Two mortgages, so I would target those when possible.

Hope this helps, Best of luck to you!

Shawn McCormick · Answer

Totally understandable, I've been here 18 years and wish I shoulda, woulda, coulda all the time! If I knew then what I know now, I'd of been retired. There is still plenty of growth here and appreciation as a state that is so attractive to so many. Prices are higher, but higher prices don't stop LA, Denver, New York from people making money. If you are seasoned and know you make your money when you buy, it's harder to get hurt.

The margins for wholesalers and flippers has been reduced as of the last few years as it becomes more mainstream and prices of homes, materials and labor go up.

Sounds like you have options..sell off your rental portfolio on seller financing and use that cash flow to fund your business here, or tap in to that equity and do the same, just grind it out for a couple of years building a team and understanding the market, you'll be fine.

Good luck!

Huso Akaratovic · Answer

@Shawn McCormick Thank you for the response. There are a lot of things holding me in this area where I currently live in . I have a very established rental portfolio. I also flip houses and wholesale. If I move to FL I would have to start all over again. We were getting ready to build a house for our family. For the money I would spent here on a brand new construction I would get a lot less in Fl for the same amount. It's a tough decision to make.

Paul Sofia · Answer

I would advise against it.  "Institutions, realtors, economists " predicting(what a joke). Way too much of a gamble. I've been at this game too long to know better. Smart money is on the sidelines.

Huso Akaratovic · Answer

@Tyler Gibson thank you for your input. I’ve noticed that as well, if a house is priced right it flies of the market… the over priced ones are doing all the reductions.. some sellers were hoping to catch the last train of 2021-2022 market prices.

Samuel Leatherwood · Answer

Hello @Huso Akaratovic! I am excited for you to make the potential move to Central Fl. I love it here!

If you want to move and are ready to make that change, I wouldn’t wait around for better times. Economists and realtors can make educated predictions but we never know what’s around the corner. Time in the market is usually better than timing the market.

As you mentioned, home prices have come off their peak yet current predictions for Central Fl looking more or less flat. Also, there are many institutions predicting rates coming down to the low 5% range by Q4 2023 but there are just as many predicting rates staying more or less flat. Date the rate and marry the house. Programs such as the 2-1 and 3-2-1 buydown can also make housing more affordable by lowering your effective interest rate for the first 2-3 years.

What neighborhoods are you looking into?

Samuel Leatherwood

REALTOR

Central Florida market— thoughts??

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