ORRA survey: 74% see a slowdown and 66% think the market peaked. Faced with wary buyers, one agent suggests a refinance later: “Marry the home; date the rate.”
ORLANDO, Fla. – Orlando home prices in July took their first dip in six months and inventory rose again as a survey showed nearly three out four Central Florida real estate agents believe the market is cooling.
The median home price in metro Orlando dropped about 1.6% to $380,900 from $387,000 in June, according to the monthly housing report from Orlando Regional Realtor Association (ORRA). The organization looks at sales from Orange, Osceola, Lake and Seminole counties.
Inventory rose by a strong 19.9%, the third month in a row it has gone up, another signal that the white-hot housing market of the past 18 months is slowing down.
The association also released a survey of agents that showed 74% of them think the market is cooling, and 66% believe the market has peaked.
Jeremy Wood, an agent with Keller Williams Heritage Realty in Altamonte Springs, agrees with the majority of his colleagues. He said the monthly report doesn’t reflect the dramatic turn he sees the market taking.
“The normal day now, I wake up, look at the [multiple listings service for agents], see a hundred new listings and 400 price decreases,” Wood said. Higher end luxury home sales have nearly dried up, Wood said, while competition has eased even among homes selling for less than $300,000.
In the association’s survey, 76% of agents said sellers were influenced to sell by the hot market, a trend that may be coming to a close.
“Sellers were still … riding that high of thinking, ‘Oh my gosh, I could ask for anything,” he said. “Begrudgingly, a number of them have had to bring their prices back down to what the home is worth.”
The survey also said 78% of agents believe investors are making it difficult for homebuyers to secure a home. But Wood said in the last month he’s seen more mortgages and fewer cash offers, suggesting this might be easing.
The main difference, according to Wood, has been the increase in interest rates. In July, rates for a 30-year fixed mortgage were relatively flat from June, staying at about 5.4%, but that’s nearly double the 2.73% they were in January.
The Federal Reserve has been sharply raising interest rates in order to curb inflation and has signaled it might raise them again this year.
In the survey, 50% of agents said higher rates were prompting clients to wait on home purchases.
Wood said many of his first-time homebuyer clients have had to back out of sales because the rise in rates pushed their monthly payments past what they could afford.
Going forward, Wood said he has adopted a new tagline: Marry the home; date the rate. He reminds buyers that when rates come down, they will have an opportunity to refinance their mortgages.
“It’s still going to be cheaper to buy now because home prices are going to keep going up,” he said.
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