A recent report by Freddie Mac finds that the Orlando property market is the fastest growing in the US. The report describes the market as “in range” and highlights its improvement since 2010, a pattern mirrored in the Florida property market as a whole. This latest BRIC Group news article explains more.
The Federal Home Loan Mortgage Corporation, known by everyone as Freddie Mac, releases a monthly Multi-Indicator Market Index (MIMI) designed to give a reading on the health of the US property market generally. The MIMI also takes a detailed look at each US state and examines 100 metro areas.
For the US property market generally the MIMI finds that the situation is stable and improving. “Pent-up demand for homes and near record-low mortgage rates are bolstering housing markets across the country,” said Len Kief, Chief Economist at Freddie Mac.
Stand-out property markets
At state and metro level, Florida and Orlando are stand-out markets, both for their stability and improvement. The MIMI looks at three main factors – employment rates, mortgages and purchase applications – and based on these compiles the ratings. Freddie Mac considers that markets ranked as “in range” to be stable and within normal range for the long-term.
In the case of Florida, the MIMI describes its housing market as “in range and growing”. The state ranks in 31st place and more importantly, has risen 15 places since last year. Florida’s current MIMI ranking is 104.2 points and the report highlights the Sunshine State’s huge improvement on its record low of 40.1 points in October 2010. This progress brings Florida into fourth position in the ranking for most improved states.
Commenting on the report’s findings, Florida Realtors President Matey Veissi said that low mortgage interest rates and a strong outlook for employment are “positive trends for Florida’s housing market”. He also emphasised that more supply is needed “as many areas still face a shortage, particularly of single family homes”.
In the case of Orlando, the property market stands in fifth place in the most-improved metros in the MIMI rating. It ranks in 48th position out of the total 100 metros, up four places since the previous monthly MIMI and up 44 in the year.
And it isn’t just the property market that’s hot in Orlando. The metro area registered the highest rate of job creation in Florida last year and received record numbers of tourists. Almost 60 per cent of all Florida visitors – over 62 million – went to Orlando in 2015.
Affordability in Orlando property market
The lack of new listings at the lower end of the current buoyancy in the Orlando property market has led some analysts to voice their concern over affordability. This is a particular issue for first-time buyers and families who are finding themselves priced out of the market.
“The impact of rising house prices coupled with tight supplies has the potential to make it difficult for the typical family to buy a home,” said Kief. The alternative is rental accommodation, although this market too is facing supply constrictions.
“We’ve noticed a marked lift in the Orlando property market over the last few years, which is good news for our investors” comments Dies Poppeliers, Managing Director of BRIC Group. He points out that the tight supply and affordability constrictions boost the potential returns behind buy-to-let properties in Florida considerably.
BRIC Group, an investment company specialising in global real estate opportunities, offers US real estate investments including turnkey properties in Florida and Houston, and land plots in Florida. BRIC Group is also developing The Coral resort, in Northeast Brazil, a luxury beachfront resort with land and villa investment opportunities. BRIC Group has been creating wealth for its clients since 1996 and has offices in Brazil, Dubai (consulting office), Hungary, Spain and the US.
(Sources: Freddie Mac, Florida Realtors)