Third Quarter Real Estate Market Report Northeast Florida

“So…how’s the market?” That’s the most common question we hear as real estate agents! This year the answer is a little more complicated than it’s been in the past. The market in Northeast Florida is recovering from the hysteria of the pandemic and slowly transitioning back to a “normal” market.

The 2024 presidential election created a tremendous amount of anxiety and many people chose not to make big financial decisions until after November 5. Now that the election is behind us the question remains, how does the presidential choice influence estate prices? A long range view suggests that median real estate prices in the U.S. have not been affected by the elected president and/or party in the White House. Many people will be surprised to see that historically real estate values in the United States continue to increase no matter which party is in power.

Other factors in the third quarter of 2024 certainly influenced our market. The most significant was the movement in the 10-year treasury rate, which is closely tied to the 30-year mortgage rate. As inflation eased, the market anticipated further cuts from the Federal Reserve. Investors anticipated the Fed’s actions and mortgage rates dropped before the actual rate cut actually happened.

Growth and hiring remained unexpectedly strong in the third quarter, and now the Fed is reacting cautiously to future cuts. As a result the 30-year fixed mortgage rate has climbed back up to 6.8%. Going forward, there is strong evidence to suggest that we’re in a trend where rates will increase for the foreseeable future.

What does this mean overall when it comes to real estate? For buyers who were waiting for interest rates to drop dramatically, waiting may have cost them. Home values continued to rise despite higher interest rates. The “on-the-fence” buyers may be missing out on purchasing a home that was once in their budget. The message here is — if you’re planning on buying real estate, interest rates shouldn’t be the only thing guiding you!

What should we be paying attention to as we move into 2025? The good news is that overall home values continued to increase. However, the number of closed home sales decreased dramatically in 2024. For example:

• Nationally, the median home price in October 2024 was $435,051, which is a 5.2% increase from 2023.
• Inventory levels of re-sales are still tight, but steadily growing. Buyers will have more homes to choose from in 2025.
• The number of home sales were down dramatically across the country and in Florida closed sales were down 15%
• The median household income in Florida increased 10% during 2024. This is the biggest increase since the 80s giving Florida buyers slightly more purchasing power.

Local pulse—Jacksonville

• We continue to see significant population migration into the Jacksonville area. Next year, Duval County is expected to grow by 1.5% and St Johns County by 2.5% — those people all need a place to live!
• Northeast Florida’s real estate values are up almost to 55% since 2019.
• The number of closed sales are down this year except in St Johns County where the number of home sales are up 14%.
• We are entering a more balanced market, where the months of inventory fluctuate between four and six months.
• New construction continues to gain market share, with 26% of total sales being newly built homes.  
• Cash sales now account for over half of the home sales above $1 million.

In summary, the real estate market in Ponte Vedra Beach and Jacksonville appears to be stabilizing with greater inventory and decreased appreciation in home values.

If you are a seller thinking about putting your home on the market in the spring there are several factors to consider:

• First, there will likely be more competition than during the last four years. Appropriately pricing your home will be critical. You should only consider the most recent sales in your neighborhood as comparable. Well priced homes are selling but rarely for more than the asking price.
• Consider repairing any known issues before putting your house on the market. Buyers have gotten pickier this year, and many buyers are walking away from homes that have not been well maintained.
• You should also expect to make some concessions or assist with buyer closing costs. Newly built homes are appealing to buyers and home builders are offering sizable concessions. For example, some new home builders are offering big mortgage rate buy-downs in order to get their inventory sold.

If you’re anticipating making a home purchase this spring, you should have more to choose from than during the last few years. Interest rates are not projected to decrease very dramatically, so don’t wait! Remember, you will need to have a signed Buyers Broker Agreement before an agent can show you ANY property. This is a national law that went into effect in August of 2024.