After more than a decade of incremental home value increases, Jacksonville’s median single-family home prices have finally surpassed their pre-recession highs in September.
Jacksonville was one of the hardest hit cities in one of the hardest hit states when housing prices crashed in 2007.
But despite the continued positive growth, some early signs are beginning to point to things slowing down: Seasonally adjusted summer sales of existinghomes were slow, inventory stayed on the market longer and — for the first year in a decade — new home starts might not surpass the previous year’s record, based on year-to-date permit filings.
Although some areas on the First Coast saw home prices surpass their pre-recession highs of 2006 and 2007 last year, Jacksonville’s median single-family home value stands at $216,400, $1,700 more than the city’s October 2006 high, according to Jacksonville Business Journal research based on weighted sources.
The First Coast’s population has long been rapidly expanding, but the growth has been more rapid as of late. Meeting the demands of housing all those people has led to a surge in multifamily construction — but the inventory of single-family homes for sale has not kept pace as well.
“At a time with such low inventory, I was surprised more sellers did not take the opportunity to sell in a strong market,” said Kim Martin-Fisher, a Realtor with Coldwell Banker Vanguard Realty.
The number of homes listed through October 2019 was down year-over-year, according to month-to-date data from Zillow.
Anita Vining, a Realtor with Berkshire Hathaway Home Services Florida Network Realty, echoed Martin-Fisher’s sentiments.
“Inventories remain low, which often drives prices upward depending on the area,” she said.
Areas with a lower average home price saw listings rise at a higher percentage compared to Jacksonville’s luxury, oceanfront and riverside neighborhoods. But it’s not just lower inventory of existing homes on the market: New home starts are also beginning to plateau after years of growth.
New home starts doubled over the previous five years. In 2014, there were more than 7,000 permits filed on the First Coast for single site building construction for residential real estate. By 2018, the annual number surpassed 15,000. But for the first time since the recession, there might be fewer homes permitted for construction this year than last, based on U.S. Census Bureau year-to-date projections.
“We don’t see a market correction as much as maturing situation where buyers and sellers are in balance,” said Roger O’Steen, founder and chairman of The PARC Group. “Many lessons were learned from the overbuilding, speculative period prior to the 2006 downturn.”
O’Steen said that 2020 should look similar to this year, and that he is actually more optimistic about the region’s future because there isn’t excessive overbuilding.
“The First Coast is a diverse market,” he said. “Relative to other U.S. markets, there is still significant value in our area and will be for many years in the future.”
Homeowners and investors sitting on property is also a key indicator of a more stabilized market that isn’t expected to see wild growth, he said.
Seasonally adjusted, homes are also starting to sit on the market for longer periods of time than years previous. Some months saw homes sit on the market more than 10 percent longer this year as compared to the previous five, according to Business Journal research.
But the biggest takeaway this year: Jacksonville’s luxury market has definitely encountered a rough patch.
“In terms of value, some of the higher priced luxury market has come down in pricing,” Vining said. “In my professional opinion, the luxury market has experienced a dramatic price correction.”
Martin-Fisher said she specifically noticed a decrease in inventory and sales prices for homes worth more than $3 million on the First Coast.
Some of the First Coast’s most expensive neighborhoods saw more than 20 percent of listed homes re-listed at a lower price before closing this year, a percentage up up significantly over previous years since the recession.
Some of the area’s highest priced neighborhoods — Ponte Vedra, Fernandina Beach, Atlantic Beach and Fruit Cove, for instance — saw some of the lowest percentages and nominal dollar growth over the past year.
Despite the smaller gains in home values this year over previous years, Jacksonville is still projected to see single family homes increase in value in 2020.
Baker, Duval and St. Johns counties are expected to have the First Coast’s biggest increases in median home prices next year, with Zillow estimating each will see increases of at least 4 percent. Nassau County is expected to experience the slowest growth in the region with only a 1.5 percent increase.