Low Inventory Affects The Market
Central Florida home sales, already healthy before the pandemic, escalated last year and have stayed strong with a combination of low interest rates and migration of new residents. It is not known how long this will last, but falling home supply is the factor that may dampen sales.
Construction slowdowns and rising material cost and the lack of existing homes on the market are occurring at the same time central Florida saw the largest migration in years. Approximately 60,000 new residents moved to metro Orlando in 2020.
In February, metro Orlando's existing home inventory was down 50% year-over-year to just over a one-month supply. The median sales priced also increased 12% in the same time period.
As home prices increase, some potential buyers will get priced out of the market. A decrease in demand or an increase in inventory could resolve this issue. It is unknown if or when that will occur.
Every home sale in the state has an estimated local economic impact of $90,300, according to the National Association of Realtors, and the housing market is often considered a reflection of the local economy's overall health. Trends in the residential real estate market are important to watch.