The general forecast for the Orlando-area real estate market suggests that home prices will level off briefly and begin to rise again later in 2023.
Into 2024, predictions indicate that the Orlando housing market will experience steady price gains due to population growth, limited inventory, and strong demand.
Orlando Home-Price Forecast Into Spring 2024
According to the latest data from Zillow, the median home value for the Orlando-Kissimmee-Sanford metro area is around $382,000 (as of early June 2023). That marked a 4.3% increase from a year earlier.
While home prices in this real estate market have dipped since the start of the year, Zillow’s forecast suggests that they will begin to rise again through the second half of 2023. Their latest prediction was that Orlando metro area home values would rise by 5.2% from May 2023 to May 2024.
Of course, such predictions and forecasts are the equivalent of an educated guess. So we probably shouldn’t put too much stock in the exact numbers being projected here. The main takeaway is that the Orlando housing market is expected to continue appreciating through this year and into next.
And as you’ll soon see, this is a fairly safe prediction to make, based on current supply-and-demand dynamics in the region.
Fast facts: By population, the Orlando-Kissimmee-Sanford metropolitan area is the third-largest metro in Florida and 23rd largest in the nation. It encompasses 4,012 square miles of total land and water area. It’s a major tourist destination, known for its theme parks, attractions, and warm weather. It’s also home to a number of major employers, including Walt Disney World Resort and Universal Orlando Resort.
Housing Market Supply Dropping Again In 2023
Like many real estate markets across the country, the Orlando metro area experienced a surge in local home-buying activity during the COVID pandemic. This trend depleted supply levels in a housing market that was already “running low.”
By March of 2022, the Orlando-area real estate market had about a 0.8-month supply of homes for sale. A “balanced” real estate scene has about a 4- to 5-month supply of homes for sale. So the 0.8-month supply level mentioned above was highly unusual and indicative of a strong seller’s market.
Starting around the middle of 2022, for-sale inventory levels within the Orlando housing market began to rise steadily, reaching a 3.8-month supply of homes at the start of 2023.
But during the first few months of this year, supply levels started dropping again. As of May 2023, the Orlando, Florida housing market was back down to 1.8 months of supply — tight conditions by any measure.
This is another trend that seems to be affecting most major cities and metros across the country. After six months of steady growth, supply levels now appear to be dropping again.
Higher mortgage rates play a role here, by making many homeowners reluctant to sell their properties for fear of taking on a higher rate.
Bob Broeksmit, president of the Mortgage Bankers Association, recently told Barron’s:
“Prospective sellers continue to be reluctant to jump into the market because of still-high mortgage rates that would replace their existing low rate mortgages.”
Inventory levels strongly influence broader real estate market conditions and trends. This is one reason why Orlando housing market forecasts stretching into 2024 predict continue home-price growth. In short, tighter supply conditions could increase demand among local buyers, putting upward pressure on prices.
This Market Has Slowed Over the Past Year…
The June 2023 Realtor.com report mentioned above also showed that the Orlando-area housing market has slowed down a bit over the past year or so.
In May 2023, the median number of “days on market” for homes within the Orlando-Kissimmee-Sanford metro area rose to 47. That was 21 days more than a year earlier.
This metric analyzes the number of days that a property has been listed for sale, until the seller accepts an offer or (less commonly) cancels the listing. Generally speaking, a higher “days on market” indicates a slower real estate scene, while a lower number indicates a faster sales pace.
The Orlando metro area actually experienced one of the biggest year-over-year increases in the number of days on market. According to a May 2023 report from RE/MAX, the days on market metric rose from 15 days in April of last year, up to 48 days in April 2023. That was a 224% annual increase, the third largest among the 49 metro areas analyzed.
What does all of this mean?
For one thing, it shows that the Orlando, Florida real estate market has slowed down considerably over the past year – more than most major cities. But that doesn’t make it an anomaly. This same trend has occurred in most local housing markets across the U.S., to varying degrees.
But It’s Starting to Pick Back Up Again
All of the “days on market” statistics mentioned above apply to a 12-month timeframe. Many of these housing market reports and forecasts look at “year-over-year” conditions and trends, in order to track significant changes over time.
But when we look at more recent monthly data, we can see an ongoing decline in the number of days on market within this metro area.
The chart below shows the median number of days on market within the Orlando-Kissimmee-Sanford metro area, going back to just before the COVID pandemic started.
As you can see, the median number of days on market has declined sharply since the start of 2023, following a significant rise that occurred last year. This illustrates a point made earlier. The Orlando real estate scene appears to be accelerating in 2023, after slowing significantly through the second half of last year.
Housing predictions for the Orlando metro area suggest that home buyers could once more find themselves in a fast-paced real estate market. Even so, we probably won’t see anything like the home buying “frenzy” that occurred during 2021 and the first part of 2022.
Steady Population Growth Well Into the Future
Population growth also plays an important role in current housing market trends and near-future forecasts. Steady population growth brings more home buyers into the market, increasing demand and bolstering prices.
The Orlando-Kissimmee-Sanford area currently has a population of around 2.7 million people and continues to grow at a steady pace.
A recent report by Woods & Poole Economics, Inc. predicted that the area’s population would grow by 75.3% over the next few decades (from 2,737,800 in 2022, up to 4,800,100 in 2060).
The report also projects that employment in Orlando will increase by 104.1% by 2060. These factors are likely to attract even more people to the area, further contributing to its population growth.
According to the Bureau of Labor Statistics, the Orlando-area unemployment rate was 2.3% in April 2023, its lowest level of the year. That was lower than the statewide unemployment rate of 2.6%, and well below the 3.4% national average for that same month.
The bottom line here is that the Orlando area remains a popular destination for people relocating from elsewhere, which supports local home values.
Disclaimer: This report includes forecasts, projections and predictions for the Orlando-area real estate market through 2023 and into 2024. Such forward-looking views are the equivalent of an educated guess and do not represent any form of guarantee. The publisher makes no claims about future housing or economic conditions.
Brandon Cornett is a veteran real estate market analyst, reporter, and creator of the Home Buying Institute. He has been covering the U.S. real estate market for more than 15 years. About the author