This last year has seen unprecedented increases in home prices across the nation. The latest edition of the Case-Shiller Home Price index (published Sep 1) showed home prices in the top twenty US markets increased 18.6% from a year ago June, marking the third consecutive month of record growth in the more than 30-year history of the index!
We are seeing this crazy trend in Northeast Florida. According to NEFAR, our median sales price increased 15% to $303,600 year-over-year July. Homes are selling faster than ever before, days on the market were down 52.9% with homes selling on average in 33 days. Lack of inventory has been hugely frustrating for home buyers with inventory dropping 50% from the same month a year ago to only 1.45 months.
We are in a changing market that heavily favors sellers. We are seeing many more full-price or better offers than ever before (nearly 45% of all sales!). Cash offers also are on the rise (approximately 25% of all sales). Homes that are in good condition frequently have multiple offers within days of going on the market.
We pay special attention to five market health factors driving our local market demand (as highlighted by the Bank of England (BOE) in their latest update). The factors are:
- Interest Rates - we’re seeing record low rates AND recent Federal Reserve guidance suggests they will be cautious in any immediate rate hikes.
- Inventory- over the last 12 months, inventory has been well below a balanced market. While new listings have started trending upward in Jacksonville and Ponte Vedra Beach, so have sales in the past year, resulting in a 50% decline in available houses in June, when compared to 2020. Homes that hit the market sell quickly, and all price points are facing shortages.
- Relocation- Jacksonville has become one of the top 5 cities for in-migration. Our population is projected to grow annually at 7.9% from Q1 2021 to Q1 2026. We are growing 5.4% faster (each year) than average for the top 20 markets. We are experiencing a wave of affluent, young migrant buyers.
- Employment- Northeast Florida is outpacing the national recovery with implied unemployment rates that are among the lowest in the country (our rate was 3.5%). We’ve become a growing tech hub and, despite the price increases, this area is still more affordable than most major US cities. Additionally, Jacksonville and the surrounding beaches areas offer favorable tax rates and a relatively low cost of living.
- Demographics- A wave of buyers is driving our market. Florida, in general, continues to experience a population boom.
With the above factors in mind, the Jacksonville and Ponte Vedra Beach outlook for the rest of the year and into 2022 looks very positive!