Covid Will Hit this Florida Housing Market the Hardest – Jared Jones
Covid Will Hit this Florida Housing Market the Hardest – Jared Jones
The area that’s going to be most impacted by the corona virus recession is going to be the area South of Disney’s, Clermont, Davenport, Reunion, Celebration, Western Kissimmee, Champions Gate, and all the way around, the short term vacation market is struggling. There’s really not any turnover of short term rentals. Disney is closed. There is a mass population of short term income properties AirBNB if you will in this particular area. There are literally hundreds if not Thousands of properties in this area are sitting right now fully furnished empty not producing an income. There’s a pool of owners not only locally but globally that have properties here. And now we’re going month after month into a situation where they have Minus cost utilities overhead and it’s not bringing in the cash flow.
Now I’ve been watching the entire index of Central Florida has been running about 70 percent down in terms of total units moved year over year. This I am speaking about in this area is anywhere from 85 to 90 percent off its sales turnover rates and I predict it’s not going to get better anytime soon before it gets a little bit worse. As a quick snapshot of what I’m talking about you can have entire communities with nearly thirty active listings without a single home pending in the subdivision. What happens with supply picks up that high with little demand. Prices will react the most here and motivated sellers will be bringing the price down to get out of the area. So based on all that what are my predictions for the future of this area. Prediction Number One. Short term rentals switching to long term rentals. You’re going to see a whole lot of properties in this area that have been taking guests on days and even week to week basis or even going to minimum six month one year just because during the phased reopening you can’t even see an international guest in these properties until Phase 3 possibly beyond if the governor pushes that out. So the owners that have them now that really really need income soon are going to opt for lower income longer term rental solution where they might even have to be storing the furnishings offsite maybe they rented long term with the furnishings inside Prediction Number to hire owner occupancy levels in vacation home communities. So where the neighborhoods permit it that don’t have such limitations where a regular owner occupant cannot buy and move into the neighborhood you are going to see a trend with more owner occupants in these subdivisions than at any time previous. I’ve been in a listing appointment where someone’s moving out of a short term vacation rental area because they want to live into a more established community.
I have a feeling that once these values really start becoming very appealing where someone can look at a home for instance and Reunion or Davenport areas and they can get a beautiful home swimming pool fully furnished for what they are going to buy a smaller home for instance in Winter Garden and down the street with no pool no furnishings maybe a little bit lower grade they’re going to make the decision to move into that particular community.The foreclosure danger is going to be in the luxury market and beyond. In this particular area there’s been a move to put much larger luxury a many level homes in the subdivisions around Disney.
The market is demand is going to be a sliver and also income demand is going to a sliver that is going to be a very scary place to be. Only the really financially solvent owners on those physical properties are gonna be OK in the long run. Over 500 vacation purchase new construction is going to halt new construction is going to haul a lot of different places the market that’s going to happen. The unfortunate thing I absolutely think short sales will definitely return in that bigger price point marketplace. Be a lot of opportunities to help people that are going to be deep into debt and the markets demand and interest to pay for those homes far less than what they what they purchased which is unfortunate.
There will be less supply of available vacation homes when the markets back in full swing. So on the other side of this remember what I predicted builder activity is going to slow down the area. You’re going to have more people converting their homes into long term rentals. There’s just going to be less rooms available for people coming to visit Orlando for a time. So you might be dealing with less travelers in the next summer season but you’ll also definitely have fewer rooms in the market which means that should help be a saving grace for the people that are still leasing their home.
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