Orlando Housing Market Faces Decline Amid Economic Challenges

Orlando Housing Market Experiences Yearly Decline as Inventory Grows Amid Economic Uncertainty

Orlando is witnessing a decline in its housing market, becoming one of 11 major U.S. metros where home prices fell compared to last year. The median home-sale price in the Orlando metro area decreased by 0.9%, marking a significant shift in a region that has experienced steady growth over the past few years.

In comparison, Jacksonville, Florida, reports a more considerable drop with a 2.2% decline in home prices, making it the state’s most affected area. This yearly price drop is notable as it is the first significant occurrence in large metropolitan areas since September 2023, as data from Redfin indicates a notable cooldown in the national housing market, driven by high borrowing costs and ongoing economic uncertainty.

Current Market Statistics

Despite these declines, Orlando is still seeing rising values in certain neighborhoods including Gainesville, Orlando-Kissimmee-Sanford, and Miami-Fort Lauderdale-Pompano Beach over the past year. The current housing inventory in Orlando exceeds 13,000 homes for sale, which is 66% above long-term spring norms and represents the highest level since the last housing crash.

Data from February 2025 indicates that housing inventory rose by 44.5% year-over-year, contributing to a total of 1,837 closed sales in the month, which is 15.5% lower than the previous year but shows a seasonal increase of 21.3% from January. Nevertheless, the average price of homes sold in February stood at $486,064, an 8.4% increase from 2024 but a slight 1.3% decrease compared to January.

A total of 297 homes sold in February represents a 15.9% year-over-year drop, reflecting a reluctance among buyers. In addition, around 30.7% of homes sold during this time experienced price reductions, which increased from the 28.5% observed the previous year. According to the Orlando Regional Realtors Association (ORRA), this amount of inventory suggests a balanced market, something not seen in over a decade.

Contributing Factors and Future Predictions

Several factors are influencing the current Orlando housing market, including rising homeowner’s insurance costs, increased property taxes, and HOA fees, all of which contribute to a decrease in buyer demand. Moreover, the typical mortgage payment now consumes 39% of local median income—a notable rise compared to the historical average of 27%. This escalating cost of homeownership is making it increasingly difficult for prospective buyers to engage in the market.

With greater supply available, buyers are now in a position to negotiate better terms, including closing cost assistance. However, analysts project that the Orlando housing market could face a further 6% price drop in the coming year, primarily due to these economic factors.

Looking ahead, Lawrence Bellido from ORRA anticipates that sales may increase as the housing market traditionally heats up in the summer months, suggesting a potential for both buyers’ and sellers’ markets amidst fluctuating conditions. As economic indicators continue to evolve, the future of the Orlando housing market remains uncertain, highlighted by rising concerns over affordability and shifting supply and demand dynamics.