ORANGE COUNTY, Fla. — From April 2020 to April 2021, rental prices for single-family homes skyrocketed more than they have in 15 years, according to CoreLogic. One driving factor is the historically low inventory of homes currently available for sale, the property analytics company says, and it’s a tension local experts say is playing out right here in Central Florida.
What You Need To Know
- Year-over-year, single-family home rent surged in April more than in past 15 years
- The average cost to rent a two-bedroom Orlando apartment rose almost 26%
- Some would-be homeowners considering whether to keep renting
“Right now, whether you're buying or renting, there's just not a lot of supply,” said Candy Cole, executive director of the Orlando Regional REALTOR Foundation (ORRF). “And unless there’s an influx of supply, that's not likely to change.”
By 2030, the Orlando Economic Partnership estimates 5.2 million people will live in the Orlando Metropolitan Statistical Area (MSA), which consists of Lake, Orange, Osceola and Seminole counties.
Essentially, that means the Orlando area’s population is expected to double before the arrival of the next decade, presenting a major issue for a region that already lacks enough affordable housing for all its residents.
More expensive real estate, fewer affordable rentals
At $300,000, the median sales price for a home in the Orlando MSA is higher than it’s ever been, according to the Orlando Regional REALTOR Association (ORRA). Historically low interest rates, coupled with an increase in remote-based work, have motivated people to flock to a region that was already experiencing a population surge prior to the coronavirus pandemic.
“People can come here and keep their job in New Jersey or California or wherever, and it doesn't really matter,” Cole said.
Property manager Chris Bright of Best Orlando Property Management agrees. Before the pandemic, he said, folks flocked to Orlando from more expensive East Coast cities, like Miami or New York. But now, in addition to those folks, Bright said he’s seeing a wave of West Coast transplants coming to Central Florida, with people from San Francisco and Los Angeles seemingly moving here in droves. That influx of demand from people accustomed to higher prices helps drive up the cost of housing here.
“We'll shoot the property up an extra 10, 15, 20 percent, just to test the market to see if we can get it,” Bright said. “And really, 80 percent of the time, we’ve been able to find that demand, even at those higher price points.”
Some of Bright’s tenants want to become homeowners, eyeing low interest rates and the stability of homeownership as the quintessential “American dream.” But many struggle to close on a home, even if they earn good money and are willing to pay more than what the seller is asking for. All over the country and here in Orlando, cash investors are scooping up homes at rapid speed: waiving inspections, offering thousands above asking price, and making it very difficult for everyday people to compete.
“Historically, it was cheaper to purchase a home, have a mortgage, versus pay a higher rent,” Bright said. “But now, unfortunately, things are almost kind of reversed.”
‘Keep your options open’
Regional rent spikes aren’t just happening within the single-family home market.
Year-over-year, Orlando saw one of the country’s biggest rental increases for two-bedroom units, according to Apartment Guide’s June 2021 Rent Report. The average cost of renting a two-bedroom apartment in Orlando jumped almost 26% last year, according to that report.
Yet despite the high cost of rent, some would-be homebuyers are weighing whether it makes more financial sense for them to try to secure a mortgage — or keep renting for now, and wait out the real estate market.
Bright’s tenant Craig Kunselman, who moved to the Orlando region from Cincinnati last fall, is still debating.
“Renting’s expensive, [but] I found out this weekend, it’s not as easy as I thought it was to get into a home, to get into a mortgage situation, to drop down that living expense,” Kunselman said.
He said after touring a townhome for sale this past weekend, Kunselman realized he’d be paying a higher monthly mortgage than the rent he’s already paying now, for a smaller space. Coupled with the large down payment he’d have to pay as a first-time homeowner, Kunselman says he’s overwhelmed by the cost — and the speed at which he feels pressured to decide.
“There’s a lot of folks moving down here to Florida since I got here. I mean, it’s a hot spot,” Kunselman said. “As soon as you see a place you kinda like, you gotta sign a contract, or it’ll be gone right under your feet
“That’s been really tough to navigate, especially on the first time going from renting to buying.”
For Kunselman and others searching for housing right now in Orlando, Cole of ORRF says flexibility will continue to be key.
“For buying or renting right now, I think the best thing people can do is keep your options open,” Cole said. “You’ve just got to be prepared to make a decision quickly … Have a good financial plan ready beforehand, so that you can be ready to move when the time comes.”
Molly Duerig is a Report for America corps member who is covering Affordable Housing for Spectrum News 13. Report for America is a nonprofit national service program that places journalists in local newsrooms to report on undercovered issues.