Real Estate Market Update Winter 2024

Everyone wants to know what’s in store for the 2024 real estate market. While we don’t have a crystal ball to read the future, our team focuses on four key areas when anticipating what might happen next:

• ‍Months of supply
• ‍Availability/Cost of Credit
• ‍Population Changes
• ‍Seasonality

Data on each of the above are crucial to arriving at an informed opinion on market direction.

Months of Supply

We are moving from an extreme seller’s market to a more moderate seller’s market. The key stats in 2023 for Jacksonville were:

• 41% of all sales were on the market less than 30 days.
• 63% were on the market less than 60 days.
• Well-priced homes that are in good condition are still selling very quickly.
• New home construction gained market share (from long term average of 18% to 25% in 2023) due largely to demand exceeding supply for older homes.

The key takeaway moving into 2024 is that supply is still low, and successful sellers are pricing their homes fairly, making needed repairs and expecting to make some concessions. 

Availability/Cost of Credit

‍According to the New York Times, “Rates are starting to follow inflation lower. End of January economic data stomped expectations. The economy grew at 3.3% for the last three months of 2023 (much stronger than the 1.8% forecasted). In addition, and very importantly for mortgage rates, core inflation continued to moderate at the end of 2023.  Consequently, Wall Street traders are betting that the Federal Reserve will cut interest rates 3 to 6 times in 2024!” These rate drops will directly affect mortgage rates.  

• In January, rates dropped nationally to 6.3% for a 30-year conventional mortgage.
• Cash buyers are still a significant part of the buyer pool, particularly in homes priced above $1 million (44% of those sales were cash).
• Election years, like 2024, have historically seen a drop in interest rates.

We expect (relatively) lower rates in 2024, giving buyers more purchasing power. 

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Population Changes

‍The greater Jacksonville area continues to grow faster than the rest of the country.  More people lead to a greater demand for real estate! 

• The U.S. population grew 15.8% from 2002 (288M) to 2022 (334M).
• The corresponding growth rate for Florida was 23.3% (from 17M to 22M).
• Jacksonville has outpaced both US and Florida, growing at 42.9% over the last twenty years. Forecasts suggest similar growth patterns through 2030. That’s A LOT of new people living in Northeast Florida! 
• Notably, higher income earners are moving to Jacksonville and to Florida.  Almost 50% of those moving to Florida are homebuyers.

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Home value appreciation is likely to continue in 2024 albeit at a much lower rate than over the past three years. While many longer-term Jacksonville residents are feeling the pinch of increased home prices and higher interest rates, more recent arrivals tend to be more affluent. Those buyers are able to afford what they view as favorable pricing, especially when compared to the areas they are migrating from.  

Seasonality

Historically, more residential homes sell in the second quarter of the year, here in Jacksonville, than any other quarter.    

• Listings - Growth is moving South through St. Johns County.  New construction is powering our local market forward.
• Showings - Showings traditionally drop off in December, start up again in the first quarter, and peak in the second quarter.
• Pricing - The seasonality effect on price follows the buyer demand and peaks in the second quarter.

If you are considering making a home purchase or selling an existing home, NOW is the time to reach out to us for help so you’re ready to make smart, data driven decisions in the second quarter. 

We subscribe to Dr. Alex Stewart at The Market Distillery for insights and analysis and incorporate his insights and graphics with his direct permission.  Thank you, Alex!‍