Note: Our market forecast includes Orlando data and data from its surroundings, including Kissimmee and Sanford.
As the third-largest metropolitan area in the state of Florida, trailing just behind Miami and Tampa, the Orlando area has a population of 2,639,374, according to the Federal Reserve Bank of St. Louis. Nicknamed "The City Beautiful," the city is known for its wide array of business, educational, and cultural opportunities.
Orlando's main claim to fame is its hold on the tourism industry. With both Walt Disney World and Universal Orlando resorts located nearby, the city welcomes thousands of visitors each year. However, in addition to its theme parks, it is also home to the University of Central Florida (UCF), as well as the Orlando Museum of Art and the Dr. Phillips Center for the Performing Arts.
The state of the market
Altogether, the current state of the Orlando real estate market is something of a mixed bag. While some economic indicators like the unemployment rate and the median rental price seem to show that the city is on its way to a post-pandemic recovery, others indicate that the City Beautiful still has a long way to go to return back to normal. We've highlighted three of the most major trends for your review.
Rental vacancies are up
Measuring at a rate of 10.3% in June 2021, rental vacancies have risen 3% in the last year. This metric is well above the current national average of 6.2%. While this uptick in vacancies may be attributable to the fact that many Orlando properties are vacation rentals and people are not traveling as frequently during the pandemic, it's still something worth noting in your analysis of the area.
For their part, home prices have been trending upward in the last year as a result of the nationwide inventory shortage. However, even though the median home price is up 18.8% on a year-over-year basis, it is still far below the national average. At just $335,000 as of July 2021, it is a staggering more than $50,000 lower than the current national average of $386,000, which means some investors will be able to get a lot more for their money.
Financial health indicators are above average
Lastly, Florida's real estate financial health indicators, measures of both delinquencies and foreclosures, are above the national average, although notably, they have been trending downward since their pandemic highs. Still, the fact that they remain above average may be worrisome for some investors, as many of the pandemic-era protections are coming to an end.
Orlando housing demand indicators
All data and charts supplied by Housing Tides by EnergyLogic.
Overall, Orlando's housing demand indicators show positive signs for investors. Unemployment has dropped substantially, hovering just above pre-pandemic levels, and while the median home price has risen over the last year, it is still far below the national average.
At 6%, the unemployment rate in Orlando sat just above the national average of 5.9% as of June 2021. However, this percentage represents a massive turnaround from the highs experienced in the beginning of the pandemic. For its part, unemployment in Orlando is down over 12% on a year-over-year basis.
Unemployment has bounced up and down in the last few months. However, for the most part, it has stayed in line with national numbers and has not hovered above 7% since September 2020, which indicates that these are reasonable fluctuations.