We remember when it was normal for it to possibly take months to sell a listing. After the 2008 financial crisis the MLS was full of distressed properties and in many areas there was an estimated six years of inventory!
Today it's literally hours and maybe a few days before we have back to back showing appointments and offers lining up in our email. In the Orlando market, home buyers can’t risk leisurely weighing several listings and sleeping on it before committing to likely the most expensive purchase of their life. Even though it's nerve racking, most buyers when they finally get that home find they made the right decision. You are living the much desired Florida lifestyle while at the same time investing in a area where growth doesn't slow down. At the end of the day, with the continued demand for so many to live in the vacation capital, it's a wise wealth investment.
The big question we get almost daily is when is the market gonna crash like in 2008? We always respond no guarantees but it's highly unlikely. This current market we are experiencing is completely different that 2008. The subprime mortgages that overstretched buyers’ budgets don't exist anymore. The banks and government regulations now put much tougher demands on income documentation and have stricter guidelines that need to be met before approving a mortgage.
But for us in the Orlando market especially it's not just demand it's the lack of supply. According to the National Association of REALTORS chief economist, Lawrence Yun, "In the housing bubble heyday, builders overbuilt. By my calculations, America had 2.1 million surplus housing units by 2006. Following the crash, underproduction steadily chipped away at the surplus, such that inventory normalized by 2011. Continuing underproduction led to the housing shortage. By 2015, the shortfall was 2 million homes. By the end of 2020, it totaled 4.8 million homes. The lack of inventory is why home prices are in no danger of falling sharply.
In addition Yun adds, "Home building activity in 2021 is expected to be slightly above historical norms. But it will take at least a few years to correct the massive shortage. In the meantime, we expect the national median home price to rise 9% this year and another 3% in 2022. Hyperspeed home buying should taper off by year’s end as supply improves and affordability challenges persist."
We know home buyers are looking for some type of reprieve from the cut throat competition. It's not unusual for a family to make offers on multiple homes before something lands...if someone else didn't waive their rights to a home inspection, offer way over asking price, offer to pay the difference in cash when it doesn't appraise, or just pay the whole lump in cash and close in two weeks. It's exhausting but we encourage buyers to hang in there....the wait will be the reward of soon owning your own little piece of the Sunshine state.