After an incredible run, it’s pretty safe to say that the previously white-hot Housing Market has cooled down….and that’s actually a GOOD thing! It simply wasn't normal or healthy for homes to have endless offers within hours of going on the market! While the shift is particularly evident in higher price points, there’s no doubt that it’s trickling down to the lower price points day-by-day.
What's driving the relatively quick shift? Two primary factors: 1) Mortgage Rates have DOUBLED since January (now above 6%), hampering buyer affordability, and ultimately leading to a drop-off in demand to purchase Real Estate. 2) Orlando saw its largest monthly home inventory surge EVER in May according to ORRA.
So are we headed for a Buyers’ Market or a major pricing correction? Well, probably not in the imminent future since Orlando is one of the stronger housing markets nationwide and inventory is still very low. The more likely result is a “leveling-off” of the market, which is actually already underway. At the same time, it’s just so hard to confidently make a prediction when so many economic indicators – inflation, the Fed raising interest rates by 75 basis points, stock & crypto markets, fuel prices, etc. – are all flashing red at the moment.
The Bottom Line: We are still in a Sellers’ Market for now, albeit a much cooler one than just a few months ago. (Comps + pricing correctly actually matter again!). But, Buyers’ probably shouldn’t wait around for a major correction either with rates possibly heading even higher. Cash Buyers, your time is here!
There’s no denying that positioning has changed quickly for both sides, but it does seem that we are headed for a healthier, more NORMAL market going forward. Stay tuned!
