"Price is what you pay. Value is what you get."- Warren Buffet, investor and philanthropist
What are the 2022 trends telling us?
Many investors have wondered what the future holds for the real estate market in Jacksonville, especially considering the pending uncertainties in the old economy. If you are wondering how the trends and statistics affect your decisions and investments as an investor, you should read this article.
The market is constantly shifting, so investors must learn to stay ahead of the curve and trends impacting the Jacksonville real estate market to make sound decisions. In today's market, it is crucial to understand the style and capacity of the city to get a good overview of how much those stats and trends mean to the Jacksonville market.
An overview of Jacksonville, Florida
Jacksonville is skyrocketing as the hottest in-migration metro area. Such areas accommodate people moving to a suburban and affordable lifestyle rather than the crowded urban 'big city' lifestyle. It is famous for its convenient location, reasonable cost of living, high quality of life, and pleasant year-round climate.
Critical stats about the Jacksonville market
Real estate estimates show that Jacksonville is arguably the hottest real estate market presently, especially with the decreasing inventory combined with robust demand, which is more likely to continue driving housing prices even higher in 2022.
Key stats :
- Zillow Home Value Index for Jacksonville is $296,359 (as of April 2022).
- Home values in Jacksonville increased by 30.6% over the last year.
- The median listing home price in Jacksonville is $299,900, based on the most recent report
from Realtor.com (April 2022).
- The price per square foot on the median listing price is $188.
- The median sold price for a home in Jacksonville is $302,000.
- Days on the market (median) is 43.
- The sale-to-list price ratio is 100%.
- Mandarin is the most expensive of the 197 neighborhoods in Jacksonville, with a median
listing price of $544,000. At the same time, Jacksonville Heights is the most affordable
neighborhood in Jacksonville, with a median listing price of $199,900.
I am an active investor in the real estate market. I find data is critical to my success. Hence, it is essential to identify the trends in 2022, the stats and predictions, and examine how much this affects your market decisions.
The first thing to observe is the interest rates and the slowing market.
Interest rates and the slowing market
Interest rates may have gone up, yet they remain lower than the 50-year average of 7.54%, and the prices of homes have shown no sign of decreasing. During the pandemic, the value of houses seemed to increase by 25-30% yearly, causing an increase in interest rates. However, now that the initial pandemic has passed, experts predict that the value of homes should return to the pre-pandemic level by 3-5% annually.
Another trend is the slow market Jacksonville is experiencing. Although Jacksonville offers affordable and convenient housing, homes that used to stay one day on the market before sold now average at least 14 days.
- Florida Housing Market* Q1 2022 Q1 2021 Percent Change
- Median Sale Price** $385,000 $317,500 +21.3%
- Inventory (Active Listings) 28,436 31,658 -10.2%
- Closed Sales 76,339 78,353 -2.6%
- Median Time to Sale*** 53 Days 64 Days -17.2%
Analytics for investors and buyers
A slow market might be discouraging to sellers. Still, it is fantastic for buyers because the highly-competitive market is causing a lot of buyers to jump through several offers until they find one that suits their needs. It also creates competition amongst buyers because they see more value for homes, and some are willing to pay more to show the seller that they want the house.
At the end of May 2022, over 3000 homes were for sale, and these homes spent at least 1.32 months on the market. The truth is, with time, this market timeframe increases.
Stats and predictions
The first half of 2022 for the Jacksonville real estate market has not been the best. Most agents came into the year with record-setting prices, but buyers came in hoping to find the market favorable. In 2022, more buyers than sellers created a competitive playing ground for both parties.
Some of the stats I have experienced this year are:
- 41% of homes in April sold for an over-asking price.
- The highest over-asking closed sale in Jacksonville was in Arlington., It sold for 74% above
the list price.
- The median sales price in Jacksonville is up 25% from April 2021.
- Homes sell within the first 14 days of listing, with most going within the first five days.
- Housing inventory is down 18% from August and 6% from March.
- At the beach, the highest over-asking closed sale was at Neptune Beach. It sold for 33%
above the list price.
All of these stats show a good recipe for anxiety. Buyers are writing a lot of offers to win a property while agents are spending months educating the buyers on the market dynamics, especially those who are not overpaying or aggressive.
Prices are up, but some price stabilization in the future.
Although there has been some rapid increase in the value of homes, it is not strange given the present state of the economy. In the first graph, you will notice the gradual climb in the median sale price in Jacksonville over the last four years. The second graph represents all beach communities like Ponte Vedra Beach and Nocatee. You will also notice that between March and April, there was an active inventory increase of 6%, and prices will continue to rise due to mortgage rates, media buzz, and seasonality, eventually slowing down home appreciation. However, home prices will likely not reduce.
Expect a slight increase in inventory.
There was a slight increase in inventory between March and April, owing to the seasonal change in Jacksonville. There will likely be another increase. As a result, some sellers worry that the market is reaching its peak and will probably dip at some point.
About mortgage rates
The Federal Reserve's rate hikes have pushed mortgage rates up substantially over the last few months. The Fed is trying to keep inflation in check, and though they are not responsible for mortgage rate increases per se, they certainly influence them.
As mortgage rates tick up, some start to impact affordability. We haven't seen this impact the luxury real estate market, but buyers in the under $1M price point are beginning to rethink what they need and can afford. It could mean a more significant shift in this market segment and eventually turn off would-be buyers, but at this point, it is too soon to tell.
Dive deep for a qualified agent
Even though real estate is hard work, the entry point says the opposite. Over the last two years, new agents have popped up with hopes for a lucrative career, but the market is proving that getting listings for many seasoned agents is quite hard. It is also hard to guide buyers through competitive offers.
Collective real estate is divided by over 11,000 agents in our area when it was once 9,000. With the stress, one would expect more agents to bow out of the game due to the low sales numbers and massive competitiveness. But the opposite is the case.
Is Jacksonville a good property investment option?
Excellent question! As we see the stats and trends in the Jacksonville real estate market, we must continue to inquire about what the market holds for the year ahead.
When purchasing an investment property in Jacksonville real estate, you must know that it differs from shopping for a fashion item or a car. Hence, it requires proper analysis to make the right decision.
While you want to get the most for your money, if you want to profit from your property, your target shouldn't be the most expensive property in the Jacksonville real estate market but a slightly different hold-over that you can move into and sell at retirement. However, consider the profit potential and purpose first.
Economic growth and job availability in Jacksonville would increase by 42% in the next ten years. So it means the popular wise move applies - to buy properties now to take advantage of that growth and rising housing needs in the future. Also, the rent turnover is generally high, which means property investors can find opportunities with renters and buyers with families as Jacksonville is a city that pulls in and keeps families with top-notch schools, high-tech transportation, and other resources.
"The bottom line : investing in real estate is smart because property is tangible. People always have, and always will, need shelter. This means it is very unlikely that our need for shelter (ie: buying or renting homes will ever go away. " - Kathy Fetke, Co-Founder and Co-CEO of RealWealth
This article is for informational purposes only. It should not be considered Financial, Real Estate, or Legal Advice. The market fluctuates; therefore, not all information will remain the same. Consult a financial or real estate attorney before making significant real estate decisions.