With Orlando home prices rising six times faster than wages in the last year, competition has revved up for condos and townhouses, a new report shows.
The smaller, more affordable residential options represented just 12 percent of the 3,508 home sales in an area of mostly Orange and Seminole counties last month. But prices of those units rose at more than triple the rate of single-family houses during the last year, according to a new report by Orlando Regional Realtor Association.
“What we have essentially done is come full circle with rent versus purchase, and right now, the pendulum has swung to purchase,” said Thomas Allen, broker with Urbanista, which specializes in downtown Orlando residential.
He said condo and townhouse prices have spiked to the point where developers will likely look at building another condominium tower in downtown at some point during the next two years as average sales prices continue increasing above $300 a square foot. It’s been about a decade since the urban core saw a new condo tower, he added.
The midpoint price for a single-family home in the core Orlando market during March was $249,900, which was up 6 percent from a year earlier. Prices for condominiums and townhouses were about half that amount and increased more than 19 percent during that time.
Stress on buyers continues to mount in Central Florida with midpoint wages of $58,406 remaining roughly flat for the previous yearlong period, while home prices have grown about 6 percent. Interest rates remained flat from a year earlier and edged down slightly to 4.29 percent in March from February.
In addition, the supply of listings has shrunk to near-record levels of 2.2 months, which is down from a year and a month earlier.
From a month earlier, the overall median price for all types of Orlando-area housing in March was largely flat at $230,000 despite the downturn in supply. Sales were also relatively flat from February.
“Orlando’s housing market continues to be tugged by opposing factors, such as low inventory and high demand,” said association President Lou Nimkoff, of Brio Real Estate Services. “The result is a wash for sales. ”
Of the four counties in the Metro Orlando area, only Osceola showed an increase in year-over-year sales with 5.9 percent growth. Lake County sales declined 4.4 percent; Seminole County was down 3.7 percent, and Orange County sales slipped 2.9 percent from a year ago.
Material from The Associated Press was used in this post.