Home sales plunged in the Orlando, Fla., area in December as 2018 finished with fewer sales than the year before, and real estate agents warned that 2019 could be slower as well.
Year-end totals for 2018 show the total number of homes sold dropped 3.2% from 2017, while home prices finished 2018 up 5.7% compared with 2017.
In all, 2,412 homes sold in the Orlando metropolitan area in December, a 20% drop from December 2017 and 6.7% from November 2018, according to a report released Tuesday from the Orlando Regional Realtor Association.
Sales have been dropping since July, when rising interest rates along with tight supply finally had buyers holding back on buying homes, real estate agents said.
“The market has just sort of softened,” said David Miller, president of the Miller Realty Group in Orlando. “In the first half of the year, there was just so much urgency that you had to put down an offer sometimes without having time to think it over.”
The median price of all homes sold in 2018 was $232,500, up 5.7%. It’s a slowdown, too, from 10% increases in 2017 and 12% in 2016.
Even so, it’s still a tight market for buyers. There were 7,872 homes on the market in December, a 3.3-month supply that matched the supply in November. A six-month supply of homes is closer to normal, Miller said. But it is an improvement over the 2.2-month supply from March to July.
All four Central Florida counties saw a similar drop in sales during December, from 21.3% in Seminole to 23.8% in Osceola, the ORRA report said.
In December, the average selling price on single-family homes increased from October and November to $254,000. Single-family home prices in December were up 3.7% compared with the same month last year but down from the $260,000 that homes were fetching at the peak in June.
Miller said average prices are rising because there is limited inventory on homes under $200,000. It’s the tightest part of the market and the biggest target of first-time homebuyers. About 40% of all sales took place at that price through November, while less than 30% of homes available that month were listed in the $200,000 to $300,000 price range.
Some have blamed softer real estate sales on rising interest rates, which reached an average of nearly 5% for Orlando-area buyers in November. But recent stock market volatility lowered interest rates to 4.38%. Federal Reserve Board members also indicated they may stop raising key borrowing rates.
As home sales slow, real estate agents hope it gives discouraged buyers a chance to re-enter the market.
“2019 is going to be a good year particularly because the market will come back into balance,” said Jeff Fagan, president of the ORRA and an agent with Watson Realty Corp. “When you have a strong sellers’ market, it makes it sometimes hard to buy. When you have a strong buyers’ market, it has a depressing effect on prices and then owners don’t want to sell.”
The Orlando area also needs more homes in the $200,000 to $300,000 range where the greatest numbers of buyers are looking, Fagan said.
“I have nothing against builders and they have to make money, but we have a workforce that needs housing, and frankly there needs to be housing that’s affordable to them.”
Tribune Content Agency