*** Disclaimer*** We don’t actually have a crystal ball and can’t guarantee any predictions below. Data and statistics can lag and can often take 6-12 months to be released. Also, we don’t offer predictions on winning lottery numbers; please don’t ask.
What will happen to the Central Florida housing market in 2024? To consider possible outcomes for the real estate and rental markets, first let’s look at where we’ve been, the factors influencing the market, and where we are currently.
Orlando Economic Partnership Study
In 2019, the Orlando Economic Partnership completed a 10-year forecast for the metro. Per the report, 1,500 people were moving to Central Florida each week. The report projected continued strong domestic and international migration to the area.
Projections expected jobs to grow by 19%, driven by home and healthcare services, the fastest growing industry. Yet many other industries were projected to outpace the national average as well. The study predicted that by 2030 elderly seniors would outnumber high school seniors. They also predicted affordability issues, if wages did not increase.
What Impact Did COVID Have?
Between April 1, 2010, and July 1, 2020, the U.S. Census Bureau estimated that Florida added over 2.9 million residents, becoming the third most populous state. Florida was already a popular migration destination, but Covid intensified that migration.
Migration
Between July 2021- July 2022, 444,500 people moved to Florida, averaging 1,128 people moving into the state PER DAY. Florida became the top migration location domestically and the second most popular destination for international migration. This resulted in a 1.9% overall population boost.
So that was an intense time. But, at the time of this writing, buyer/seller data from Redfin suggests migration to Florida is still strong. Even now that the mass influx has passed, Orlando still ranks at the third most popular migration destination in the nation.
Economy and Jobs
Apart from the amazing weather, people are also coming for work opportunities. In July 2023, CNBC ranked Florida as the top state for economic growth. In 2022 alone, Florida saw a 4% growth in GDP, 4.9% job growth, and average housing appreciation rates of 15%.
Today, Florida’s economy continues to grow with thousands of jobs created each day. Many companies have relocated from out of state to Florida’s pro-business tax structure.
Central Florida Housing Market
Season, migration, price, inventory, and interest rates all factor into the housing market, making it a complex puzzle. Understanding what “normal” looks like for a market can help you recognize and adapt to market shifts, both good and bad. The Orlando Regional Realtor Association provides monthly State of the Market Reports that include sales, median prices, and inventory.
Inventory
So what does normal look like for Central Florida? Let’s look at the history books. Back in October 2016, there were just over 10,000 houses listed for sale in the area. While that number fluctuated during the wild seller’s market hitting an inventory low of 2,313 in February 2022, things have returned to normal, as demonstrated in the table below.
Typically, the summer is the biggest time of the year for home sales. Of note: the average days a property was on the market in October 2023 (44) is still lower than pre-pandemic rates (54 days in November 2019).
| Month/Year | Housing Inventory |
| October 2016 | ~10,000 |
| July 2017 | 9,051 |
| July 2018 | 7,525 |
| July 2019 | 7,998 |
| November 2019 (pre-COVID) | 7,837 |
| February 2022 | 2,313 (lowest comparison point) |
| October 2023* | 7,813 |
* Most recent data available at the time of this writing
While inventory increased for six straight months from February to October of 2023, it really just returned to normal. The question is, what will happen going into 2024?
Sales Price
During the pandemic (2020-2022), Florida saw tens of thousands of people moving into the state and buying houses at a time of very low inventory. Bidding wars often resulted in sales over asking price, many with cash offers, which drove up home values. Combined with record low interest rates, it was an extremely hot sales market.
In normal years, you will see sales prices go up and down throughout the year. However, from the fall of 2019 through 2021, Orlando never really experienced that seasonal cycle.
Instead, median sales prices rose from $270,000 in July 2020 to $320,000 a year later. By July 2022, median sales prices skyrocketed to $380,900, nearly a 30% increase in two years. This rate was simply not sustainable. Normal appreciation for Central Florida property is 5-8%, depending on location.
Things started changing from July 2022 to October 2022, where median sales prices dropped from $380,900 to $365,000, roughly a 4% decrease. Comparing October 2022 to October 2023 (bearing in mind the cyclical nature of the market), there was roughly a 4% increase. This suggests the market has recovered from the madness in 2021 and 2022, returning to more normal cycles.
Interest Rates
Interest rates may be one of the most important variables to consider when trying to predict the Orlando housing market in 2024. They can make the difference between an investment property making financial sense or prompt a buyer to walk away from a deal.
The interest rates we experienced during 2020 and 2021 were historically low. In January 2021, rates were 2.65% (the lowest ever) and the average for the year was 2.96%.
Things began changing in 2022. Interest rates rose in January 2022 to 3.2% and continued sharply increasing to 7.08% by October. By the end of the year, interest rates averaged 5.34%. The increases continued into 2023 with the year beginning at 6.48% before steadily climbing all year to a high of 7.8%.
At the time of this writing (December 2023), the average 30-year fixed mortgage is 6.95%. That rate came after seven straight weeks of rate decreases from the 7.80% highwater mark.
Most experts predict we won’t see any more rate hikes, but rather will see the interest rate declining in 2024. While the specific numbers vary from expert to expert, Freddie Mac, Fannie Mae, and the Mortgage Bankers Association all predict rates to decline to 6.1% by the end of 2024. Beyond that, they expect rates to dip as low as 5.5% in 2025.
So What About 2024?
Much of what 2024 holds in store relies heavily on what happens with interest rates and home prices.
Interest Rate Trends
Redfin notes that 82% of homeowners have an interest rate below 5%, while 62% have a rate below 4%, and 23.5% have a rate below 3%. If rates continue to fall, it will likely lead to more buyers entering the market and actively looking to buy.
If rates fall substantially going into Q2 2024, and asking prices remain normal or even decline, we could experience another very hot market.
Housing Price Trends
At the same time, pent up demand exists for both existing homeowners and the first time homebuyers looking to enter the market. For example, according to Zillow’s Consumer Housing Trends Report for 2024, 43% of renters plan to buy.
Despite the wild interest rate fluctuations, in 2023, single family home sale value increased 14.1% year-over-year and closed sales increased 6.1%. As of August 2023, the majority of sales (63%) were under listing price and only 18% were over list price.
If inventory remains at a normal level, and the positive migration continues, we could see a normal or slightly above normal market.
What This Means for You as an Investor
Many positive economic variables help insulate Central Florida’s housing market, making Florida a great place to own rental properties because of the appreciation and projected growth. Opportunities exist for many people to leverage their current property (and likely plethora of equity) to become rental property owners.
All nine of Florida’s metros are expected to grow by 10% or more in the next decade. Orlando expects to see growth near 20%. As the inbound migration continues and the economy remains one of the strongest and fastest growing in the nation, it’s hard to predict a scenario with negative outcomes in 2024 and beyond.
