Market Of The Month – Orlando, Fl

Orlando is more than a tourist destination. Its residents enjoy a high quality of life, with lots of entertainment options and a job market growing in industry diversity. This Central Florida city has seen quite a boom in demand for living. For the real estate investor, the massive Orlando region has a lot to offer: low real estate prices, high rental rates, a high-quality renter population, and diversity in the type of real estate investing. Check out its key market indicators:

Orlando Population Growth

By US Census Bureau population estimates, Orlando is Florida’s fourth-largest city. All the suburbs in the greater metropolitan area combine for a total estimated population of 2.6 million people.

Most importantly, that figure grew 22.2% since 2010. Orlando is among the top five metros in the nation for population growth from 2018 to 2019.

Orlando itself grew 20.4% as of July 2019. According to one source, Orlando is adding 500 new residents a week. Around 70% of that growth is in migration, both domestically and from international locations. Some Orlando suburbs have had phenomenal growth. For instance, Fruitland Park’s population has doubled since 2010.

Orlando Economic Partnership (OEP) estimates by 2030, the greater region will have a population of 5.2 million people. In other words, the population is set to double in the next decade. That will increase Orlando’s already high housing demand.

Orlando Job Market

Yes, tourism and hospitality do play a significant role in the Orlando job market. Walt Disney World Resort is a major employer.

However, Orlando does have other big draws for its job market. The Bureau of Labor Statistics says the greater Orlando MSA was number one in the nation for job growth for the fourth consecutive year before the pandemic. The strongest growth was in its professional and business services category, which added over 16,000 jobs from December 2017 to 2018. Construction work was a close second. Forbes also acknowledged Orlando had strong job growth, ranking it sixth in the country, and it listed it 19th for Business and Careers in 2019.

Orlando’s other major employers include JetBlue Airways, Orlando Health, Tupperware Brands, Hughes Supply, and the University of Central Florida. Electronic Arts is here, having created its top-selling Madden NFL series in Orlando.

Prior to the pandemic, Orlando reported an unemployment rate of 3%. With such a strong tourism market, the COVID-19 public health measures significantly increased Orlando’s unemployment rate. However, diversity in other employment sectors balanced its job losses. As of October 2020, the area’s unemployment rate was down to 8% from a peak of 16% in June 2020.

The region is expected to bounce back strong. OEP projected the employment opportunities increasing 19% by 2030. The fastest-growing employment sectors are anticipated to include manufacturing and construction, computer system design, home and health care services, and engineering.

Orlando Housing Market

Orlando’s diversity is an advantage when it comes to investing in housing. As a Central Florida city ripe with entertainment and lifestyle possibilities, it attracts all demographics. Retirees, young professionals, and families alike are drawn to the Orlando MSA.

The Orlando housing market is experiencing median price increases. In October 2020, the overall median price was $269,950, an 11.6% increase year-over-year. Single-family homes had a median price of $290,000. Condos more affordable, at a $150,000 median price. Duplexes, townhomes, and villas were going for $238,000.

These prices are near the national rates, but keep in mind the population growth will continue putting demand on Orlando’s housing supply. For a real estate investor, purchasing and holding a property could result in significant appreciation gains.

Some neighborhoods are more affordable than others. Homes in Lake Nona South have a median listing price of $564,500, while South Semoran has a median listing price of $120,000.

Orlando Rental Market

Working in the rental market here means cultivating a targeted investment strategy. Orlando is a substantial market for two target groups of tenants, retirees and millennials, but it’s also great for vacation rentals and student housing.

Look at buying properties either for appreciation or by leveraging the short-term market and going for cash flow.

Pinpointing a target market will help focus on the right Orlando neighborhoods and suburbs. Remember, the greater Orlando metro is a big area encompassing seven Florida counties.

Rentcafe reports that the average Orlando apartment rents for $1,391 as of October 2020. Around 46% of the households are renter-occupied. Only about 13% of Orlando’s rental units go for less than $1000. Kiplinger also rated it as one of the least affordable places to own a home in the United States, which bolsters the tenant population.

If you decide to acquire properties for appreciation, look at Winter Park, College Park, and Lake Nona. If you’re looking to produce cash flow, look at Casselberry, Kissimmee, and Oviedo. For vacation rentals, target the neighborhoods surrounding Orlando’s numerous resorts and theme parks.

Invest in Orlando Real Estate

Orlando offers a diverse market with many opportunities for the real estate investor. It’s up to your goals how you want to approach investing in Orlando real estate. As mentioned, investors can target specific markets here that are not as prominent in other cities. Focus on anything from short-term vacation rentals to active adult housing and everything in between.

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