Buyers are looking at houses, and they see that they have been on the market for up to a year. They ask, "if I buy now in a slow market and I want to sell in a few years quickly, am I stuck?"
Short answer: Not likely.
Long answer: There is no doubt that home prices are soft, and there are lower interest rates. Yet people in Orlando need to remember that we are coming off a period of very quick appreciation. In 2005 and the beginning of 2006, due to limited supply, home prices skyrocketed. Prices in Orlando had been low, compared to other areas of the country. Investors flocked to invest and make some great money.
Some of the people who put their properties on the market at the beginning of 2006 did not sell them as expected, and the market took a dramatic slow down from August to December of last year. Some property prices have been overinflated, trying to capitalize on what happened in 2005.
As for a home appreciating, the projected existing home prices are expected to increase in the coming years. The stronger gains will most likely happen in 2008. It won't take off like 2005, but appreciation is likely.
Why is the market sluggish now? Because there are a lot of properties on the market. The real estate market is cyclical, and it does not respond quickly to shifts. Because of the time it takes to build a house and/or a person to decide to sell and list their house, the housing market does not bounce back in a matter of days---it can take months.
With the strong economic factors expected in Orlando due to employment, new business, and the average number of people moving here daily, there is no reason to expect a recession, leading to depreciated property rates next year.
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