Over the last 18 months, the residential real estate market in Central Florida has seen a huge boom. Dozens of investors waged "bidding wars" among themselves, and many contracts went to those who were able to outbid opponents by as little as $1,000.
Buyers did not care about property conditions, its location, or the price. They just bought everything. The hype was also driven by low interest rates on mortgage loans and by accumulated consumer demand, which was restrained by the pandemic for months. On average, there were 20–30 buy orders for every offer on the market.
Therefore, it is quite natural that this boom has led to constantly increasing housing prices. To illustrate this point, in April 2021, the median home price was $370,000. A year earlier, in 2020, the median price was just $295,000.
But at that moment, several things happened.
On one hand, the US Federal Reserve started to raise the key lending rate in order to combat rising inflation. But in the end, it had no significant effect. But at the same time, it scared many buyers away from the market. Especially those buyers who intended to enter the market for the first time.
On the other hand, available offers and the overall number of buyers decreased significantly. The market boom was caused by the accumulated demand and low market starts. Naturally, in a year and a half, this demand has dried up and the market has returned to fair and adequate indicators.
All this has given Central Florida a much awaited break. Although the market is still quite overheated. According to some analysts, overheating has already disappeared, but the rates are still a little high. At the moment, sellers still have a small advantage over buyers because of the extremely low number of available offers. So, in April 2022, only 2,670 housing units were put on sale. While the historically fixed norm is 10,000 units.
But it should not last long. By the end of this year, it is expected that the situation in this regional market will calm down. Although prices will not drop much. A price decrease of 5% is expected by December 2022.