The Florida real estate market is truly “The Sunshine State”, especially as it pertains to its rental markets. One of the state’s most successful markets in 2019 has been the Orlando real estate market. But as the decade comes to an end, what are some Orlando real estate market trends real estate investors should expect in 2020? Keep reading to find out!
Orlando Real Estate Market: City-Level Data
In order to properly explain the Orlando real estate market forecast, we need to go over the city’s real estate market data. Where can investors find this data on the Orlando housing market and Orlando homes for sale? Right here, with Mashvisor! To learn about how Mashvisor computes real estate data for Orlando and other cities in the US, click here! In the meantime, here is the investment data for the average Orlando rental property:
- Median Property Price: $348,752
- Price per Square Foot: $182
- Price-to-Rent Ratio: 17
- Rental Income: $1,703
- Cap Rate / Cash on Cash Return: 1.7%
The 5 Orlando Real Estate Market Trends to Expect in 2020
So, what are the Orlando real estate market trends investors should be aware of heading into 2020? Here’s what you can expect from the Orlando housing market in the next year:
- Orlando houses for sale will be affordable
- Local investment properties will appreciate
- There will be a high demand for traditional rentals
- You can enjoy a high rental income
- The city will be a seller’s market
We will use the data of Orlando and more to illustrate each of these Orlando housing market predictions.
Of all the Orlando real estate market trends, its affordability is arguably the most important. Orlando house prices are well below the state median, which is $439,807 according to Mashvisor. And although the city’s median rental property price is higher than the national median of $312,800, all of the six best neighborhoods (listed below) have an average Orlando real estate investment price that is less than this. For instance, five of the neighborhoods listed below are less than $300,000 and four are less than $250,000.
Orlando’s affordability also extends to its overall cost of living. The cost of living in Orlando is less than those of other Florida cities including Fort Lauderdale, Miami, Cape Coral-Fort Myers, and Tallahassee. This low cost of living will continue to encourage people to move to Florida, increasing your potential renter pool. Orlando’s affordability is a vital trend that is expected to continue into 2020.
2. Steady Real Estate Appreciation
The appreciation rate is another key feature of the Orlando real estate market trends. According to NeighborhoodScout, the projected Orlando real estate market appreciation rate for 2019 is 3.35%. This places the city in the top 40% for national appreciation. Orlando’s appreciation rate for 2020, however, is expected to increase to a rate of 4.5%, according to Zillow. This will likely increase Orlando’s house prices slightly in 2020, but overall, the city will remain an affordable market.
3. High Demand for Traditional Rental Properties
The best way to invest in Orlando real estate is to buy a traditional rental property. Besides some of the other Orlando real estate market trends mentioned above, there are other factors that contribute to the success of the traditional market. The city’s economic success, for instance, plays a key role in its ability to attract tenants. Orlando has an unemployment rate of 2.9%. This is lower than the state’s rate of 3.3% and the US average of 3.9%. Orlando is also expected to have significant job growth. Over the past year, the local job market increased by 3.9%, which is much more than the US average of 1.6%. Its future job growth over the next ten years, at 51%, is much higher than the US average of 33.5%. Thanks to these trends and more, rental demand is high in Orlando, with about two-thirds of the population residing in an Orlando rental property.
4. High Rental Income
Rental income is always the main goal when buying a rental property, and the Orlando real estate market fulfills this purpose excellently. Because of the high demand, an Orlando investment property will generate high rental income. And thanks to the high rental income, the average return on investment (1.68%) is also a good one. So, if you’re looking for a profitable Florida investment property, you’ll find one in Orlando!
5. Seller’s Market
Despite all the positive Orlando real estate market trends for buyers, the Orlando real estate market is, unfortunately, not a buyer’s market. On the contrary, the market is a hot seller’s market, according to Zillow. However, the market might experience some cool down in 2020, as Orlando’s housing inventory is steadily rising.
Best Neighborhoods for Traditional Rentals in the Orlando Real Estate Market
Where are the best traditional neighborhoods that will benefit the most from the positive Orlando real estate market trends? Where should you invest exactly in the Orlando housing market 2020? According to Mashvisor’s heatmap analysis, the best neighborhoods in Orlando are Rio Grande Park, Roosevelt Park, and Dover Manor.
Rio Grande Park
- Median Property Price: $110,967
- Price per Square Foot: $99
- Price-to-Rent Ratio: 8
- Rental Income: $1,145
- Cap Rate / Cash on Cash Return: 5.1%
- Median Property Price: $115,467
- Price per Square Foot: $155
- Price-to-Rent Ratio: 9
- Rental Income: $1,125
- Cap Rate / Cash on Cash Return: 4.4%
- Median Property Price: $275,000
- Price per Square Foot: $166
- Price-to-Rent Ratio: 13
- Rental Income: $1,791
- Cap Rate / Cash on Cash Return: 3.8%
All in all, the Orlando real estate market will continue to be a top real estate destination in 2020, all thanks to the Orlando real estate market trends mentioned in this blog. If you want to start looking for an investment property in one of the best rental markets to invest in Florida, you can do so with Mashvisor’s tools. To start searching for positive cash flow Orlando homes for sale to invest in, click here to start your FREE 14-day trial with Mashvisor’s investment property calculator!