Rob Field has a pretty good idea of a home he would like to buy in Orlando. The single 63-year-old man is looking for a two-bedroom, two-bathroom apartment with wooden floors and a modern kitchen. Rob started searching for a suitable option a year ago but as a financial planning expert he realized that it was virtually impossible to close a profitable deal in the overheated housing market.
“I am slightly frustrated by that,” Field says. “I am planning ahead and working out my budget and then the numbers change in a month and I have to start from scratch.”
However, the number of listings in Orlando increased this summer, sellers lowered their prices, and homes stay in the market long enough for buyers to view them and make an informed decision. This makes Rob certain that his quest is coming to an end.
“I became more insistent in negotiations with sellers than four months ago,” Field says.
According to a new study by Knock, a national homebuyers’ lender, buyers throughout the country are beginning to gain more authority than a year ago. “From June to July, all 100 top US markets moved more in favor of buyers,” Sean Black, CEO at Knock, declared.
According to Knock, Orlando and 15 other leading US markets have ceased to be buyers’ markets and have become neutral, which suggests approximately equal terms for buyers and sellers.
This is of course great news for buyers like Field who have been watching the rapidly growing house prices since the start of the pandemic. The average value of a house in Orlando increased from $250,000 in February 2020 to $380,000 in July 2022, i.e. residential property became 52% more expensive in only two years. This was caused by a combination of reasons such as the low supply in the market and Florida’s population growth boosted by migration of remote workers.
In January, the Federal Reserve System started raising interest rates to fight the inflation. According to the Federal Reserve Bank of St. Louis, the average 30-year mortgage rate reached 5.81% in June, which is the highest since the Great Recession of 2007 – 2008.
“I think now is not the best time to buy. House prices are bound to decrease in the nearest future,” says André Stewart, who created the InvestFar app and wrote The Real Estate Investing Diet. A study by the Florida Atlantic University confirms Stewart’s claim that homes are overpriced.
Sellers, however, seem to have felt that the market is cooling. In July, Redfin (an analytics firm) reported that the price of 8% of listed properties in Orlando already dropped.