Now Is The Time To Buy!
Now Is The Time To Buy!
By Scott & Sam Hillman
If one of your resolutions is buying a new home, you’ve chosen wisely.
Analysts are predicting a moderate to strong year ahead for the residential real estate market, especially in Orlando. Zillow.com ranked Orlando as one of the top housing markets for 2017 – and for good reason. The strength and resiliency of Orlando’s existing real estate market continues to expand due to a strong job market and a robust economic forecast that allows more first-time buyers to enter the market. Nationwide, we’re experiencing the longest positive business cycle in history, with low unemployment and more private sector jobs since the economic slowdown.
The buying power of millennials is also redefining the American dream of owning a home. In 2015, 67% of first-time homebuyers were millennials, according to the NAR, and the trend continues to grow. Over the past two years, millennials have become the largest demographic of homebuyers, outpacing baby boomers. This year, more millennials will enter their main home buying years, largely without the financial support of their parents. With higher earning power and low student debt, these young buyers are ideal first-time homeowners.
If you’re still unsure on whether to buy a home, let us give you three reasons why now is the perfect time to buy.
For the past few months, we’ve talked about the continued rise in home prices and the number of active new contracts on existing single-family homes and townhomes, especially in the core zip codes of Orange and Seminole counties.
During the third quarter of 2016, as compared to one year ago, median single-family home and condominium/townhome prices in Orange County were up 10.9% and 13.1%, respectively. Seminole County reported similar figures, with median single-family home and condominium/townhome prices up 13.6% and 19.1%, respectively. Winter Park (32789 zip code), showed the most impressive gains for median single-family home and condominium/townhome prices with prices up 17.7% and 53.3%, respectively.
Overall, the Orlando region saw price gains of 7.2% in November as compared to the same month a year ago, according to figures released by CoreLogic. It’s likely that sustainability will be the key to rising prices through the end of 2017 at a more moderate pace.
Yes, everyone is talking about interest rates since the Fed raised a key short-term interest rate back in December. However, even with the small (and expected) bump, mortgage rates remain historically low – and forecast to stay that way.
While mortgage rates hover around 4% on Bankrate.com, more homebuyers are taking advantage of the opportunity of low rates and locking in their home loans now. Even with additional interest rate hikes expected in the coming months, homeowners are still assured of locking in a sub-5% rate.
Rent vs. Buy
Last, but not least: if you need another reason to buy, consider the cost of renting versus buying and the sticker shock may surprise you. Analysts ranked Orlando as the 35th most expensive rental market in the country, with the average rent for Orange, Seminole, Osceola and Lake counties reported during the third quarter last year at $1,175, according to the CBRE. Yardi Matrix, a research and data firm that analyzes the apartment market industry nationwide found Orlando renters faced increases that were twice the national average last year. And rental prices don’t show any signs of cooling off, as demand increases with more people relocating to Central Florida.
Scott Hillman is president of Fannie Hillman + Associates, a 35-year-old Winter Park-based real estate company specializing in residential real estate sales. His son, Sam Hillman, is an associate and analyst at the family-owned company and producer of The Hillman Report, a semi-annual look at residential real estate in Orange and Seminole counties. Together, they also produce Hillman Homes, a customized quarterly publication showcasing local luxury listings, editorial features, a dining and shopping guide, and cultural arts calendar. Read the latest issues on the company’s website (fanniehillman.com) or by calling (407) 644-1234 for a copy.