Jacksonville Beaches Real Estate Market Year End Review 2016
2016 Year-end Summary - National and Northeast Florida Real Estate Trends
Home prices hit new highs in 2016 as prices continued their rise across the country over the last twelve months. Per the Case-Shiller Indices, the leading measure of U.S. home prices, the National Home Price NSA Index reported a 5.6% annual gain in October, and the 20-City Composite reported a year-over-year gain of 5.1%, up from 5.0% in September. (Case-Shiller reporting lags the market several months). Following the recent national elections, consumer confidence is now at its highest level since 2004, and projected mortgage rate increases did not occur as predicted in 2016. Buyer demand for a new home appears to remain strong.
In Northeast Florida, the story was much the same. The years of rapid price increases that followed the 2012 real estate market lows are behind us—replaced by steady but modest price increases. The Northeast Florida Association of Realtors Annual Report indicates that both pending and actual sales increased over 2016, as did median prices (up 8.8%). Listings were lower in year-over-year comparisons, as were closings of lender-mediated properties (distressed sales). The foreclosure market appears to be well behind us, as many more owners now have greater than 20% equity in their homes. New construction was also robust, particularly in Northeast St John’s County and Nocatee, with new construction accounting for 15.2% of market share across the entire MLS and 67.6% in Nocatee.
The First Coast Beaches market (Ponte Vedra Beach, Atlantic Beach, Neptune Beach, and Jacksonville Beach) also show a steady and consistent market year-over-year. Listings were flat to last year over the past six months, while sales dipped somewhat—due primarily, it appears, to softer sales during and after Hurricane Matthews. Overall the average price for residential sales increased at a more modest level than across all of Northeast Florida—at 4.1%.
Looking Ahead—2017 Outlook
The consensus for our local market appears to be that 2017 should be another good year for real estate sales in Northeast Florida. Mortgage interest rates remain low, even after the prime rate increase in December and rates for 30-year mortgages should remain well below 5% for the remainder of the year. The average 4th Quarter 2017 rate expectation from major lenders and from the National Association of Realtors is 4.43%.
We are near full employment and wage gains are up. However, home price increases continue to outpace gains in wages and personal income, and affordability measures based on median incomes, home prices and mortgage rates show national declines of 20-30% since home prices bottomed in 2012. While affordability indicators may not suggest an immediate reversal in home price trends, home prices cannot rise faster than incomes and inflation indefinitely.
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