ORANGE COUNTY, Fla. — Kelsey Kerce and Wes Shaffer will get married in March. The young couple had been hoping to buy a home before the wedding, so they started house-shopping.
“For us, it’s been pretty obvious -- if we can afford it, it’s not nice,” said Kerce, sitting next to her fiancé in their small one-bedroom Orlando apartment.
The couple have all but resigned themselves to the fact that a new home will have to wait until after the honeymoon.
“Based on our income, we may not be able to afford a home in Orlando,” said Wes. “In some ways, it’s just easier to come back here to the apartment.”
The couple is part of a growing number of people in the Central Florida area who are finding themselves priced out of the housing market.
“At first, we were looking for under $200,000 and then it just wasn’t, but I would rather stay here than what we can get for under two,” Kerce said. “We’d rather not buy than buy something that is not what we want.”
“Anyone buying a house right now between $200,000 and $300,000 is a serious challenge,” Realtor Ray Lopez of Keller Williams Realty said to Channel 9’s Christopher Heath. “The inventory is almost nonexistent.”
New home construction in Central Florida is still recovering from the 2008 recession. While builders have ramped up construction in the last two years, the inventory of homes has continued to stay at a low level. Industry experts say in a healthy market, the greater Orlando area would have about a five-month supply of homes; right now, the supply is half that.
But sluggish new home construction is only part of the problem. Investors in the market are holding properties and competing against buyers when new homes enter the market. Investors, who often pay cash for properties, are buying homes that wouldn’t normally be bought, taking inventory off the market.
“It’s a seller’s market right now,” Lopez said. “Even if there is a problem with the home, the seller may not want to fix it, because they know they can put it back on the market and get another buyer.”
According to the Orlando Regional Realtor Association, the median home price in the Orlando area is $230,000, a 6 percent increase since March of 2017.
Lopez said don’t expect things to change anytime soon: “Our market will be similar to this for the next one to two years.”
With young, first-time homebuyers priced out of the market, the demand for rentals has also seen an increase. According to the Harvard Joint Center for Housing, rental price increases in the Orlando area have outpaced inflation by about a 3-to-1 ratio.
While the confluence of low supply and rising prices may harken back to the 2007 housing bubble, experts say this is not the same thing. Among the key differences between 2018 and 2007 is the nature of the price increase. In 2007, the housing bubble was largely driven by a flood of easy money into the market with little oversight. Now, the problem is more acute -- since lending has become stricter, the issue is a lack of supply.
Cox Media Group