March 24th 2020, that is the day Orange County FL announced stay at home orders and it officially became a buyers market, too bad most buyers stopped looking for homes.
Some stats for you:
Buyers are dropping out of the market.
- In March 2018 and 2019 the average number of homes coming “Back on Market”, expired or withdrawn has been about 1,344 homes.
- For March 2020 that total is 1,832, a 36% increase, and that is with the greatest effects of COVID shut downs yet to really hit. I expect April’s numbers to be higher by an order of magnitude.
Sales are still happening, but have hit a wall.
- In the 5 county Central Florida area, there were 2,295 closed sales in the first two weeks of March
- In that same area, closed sales for the first two weeks of April, dropped to 1,369, a 40% drop in a month when sales should be accelerating.
Mortgage lending is still happening but qualifications for mortgages have tightened back up to great recession levels, shrinking the pool of people that can purchase anything. Add to that a record number of unemployed, people just not wanting to view properties (especially if they are occupied) for fear of catching Coronavirus and general uncertainty about job and income security and you have a recipe for a frozen real estate market at best, and the potential for falling prices at worst.
In short, if you were thinking about selling in 2020, you are going to need to reassess if it’s worth selling now or plan to hold for the long-term. Being a full service brokerage that specializes in property management and the sale of residential property, we have no incentive to promote either strategy.
If you absolutely need to sell, or think housing is in for another 50% price drop like we saw a decade ago (I do not believe this is the case), I’d sell as soon as possible and be sure your home is the most attractive option to the few buyers that are still looking. The biggest mistake sellers made back in 2007/2008 was pricing too high up front and only later dropping the price, chasing the market downward as it fell further. Eventually selling months after listing and for less than they would have if they priced aggressively right at the start. If this describes you, reach out to us and we can consult with you on how to sell in today’s environment and get your home sold as soon as possible. Otherwise, plan to hold for the long haul. We will have no certainty of anything until at least the end of May or longer and at that point even the most optimistic of economists is projecting a severe recession to last through 2020 with the potential for modest growth again in 2021.
Now is the Time to Hold
Though the trigger for this downturn is new, the cyclical nature of real estate is not. Eventually buyers come back and home prices rise again as populations grow and people need places to live. Even now, in the middle of everything going on (or not going on) we are still seeing traffic at our vacant for lease properties. People are still moving and without the ability or desire to purchase at this uncertain time, rental homes are just as needed as they were before.
Renting your Orlando home may be the best option right now and you likely can rent it for more than your mortgage payment while also enjoying the tax benefits of rental property too. It also offers more flexibility should we be in for a short recession and the market recovers in 1 or 2 years, you can always sell with a tenant in place or evaluate selling each year when the lease comes up for renewal.
With professional management from BlueHome Property Management and our included guarantees still available, PLUS available rent skip and eviction insurance from SureVestor, renting your home now has never been easier or safer.
Just fill out THIS FORM today to request your free sell vs rent analysis and we can work together to solve your real estate problem, no matter the solution.