Home Prices Rise Nationally for the 8th Consecutive Month…But What About Jacksonville?
The housing market is on a roll! Well..kinda…at least according to the S&P CoreLogic’s latest Case-Shiller U.S. National Home Price NSA Index, which was released on November 28 2023. The index reports that home price growth rose in September 2023 by 3.9%, marking 8 straight months of non-seasonally adjusted strong gains. It also marks the third consecutive month of annual increases.
As a result, CoreLogic reports that home prices are now up 1.3% when compared with the June 2022 peak, and up 6.6% over the valley that occurred in January of 2023. Good news for homeowners and potential home sellers this winter.
But what does the street level view look like in the Jacksonville Metro, and how does it compare to the national rhetoric? Let’s dive into the numbers!
A closer look at values in the Jacksonville Metro
At first glance Jacksonville might look to be a fairly neutral market. According to Zillow’s Home Values Index for Jacksonville, home values are down 2.7% year over year since November 2022. However, upon closer examination it becomes evident that a majority of that decline can be attributed to the first three very turbulent months of 2023. In fact, according to this same index, home values in Jacksonville have actually risen consecutively in the five month period between May and October.
*Source – Zillow Home Value Index detailing May 2023 – October 2023
Sales price in the Jacksonville Metro
While valuation models help keep a pulse on the overall health of the market, there is a wealth of sales and listing data which can offer a more tangible outlook. According to information provided by the Northeast Florida Association of Realtors the average residential sales price in October 2023 was down 1.83% year over year, with the median sales price down 1.41% year over year. However, it is worth noting that the median sales price has risen 4.48% since January.
*Source – NEFAR MLS Market Summary Jan 01, 2023 – October 31, 2023.
Inventory in Jacksonville
In a healthy neutral real estate market, there are typically 5-6 months worth of active inventory. This can also be expressed as an absorption rate of between 15 and 20 percent. In a buyer’s market, the absorption rate is 15% or lower, indicating that homes are selling slowly, and that buyers have more negotiating power as a result.
However, in a seller’s market, which is when the absorption rate surpasses 20%, properties are selling quickly enough that buyer’s must compete, which drives up prices. In the Jacksonville Metro the absorption rate is currently 28%, or about 3.15 months of inventory. There’s no doubt, it’s still a seller’s market.
Other factors affecting home values & sales prices in Jacksonville
Real estate values don’t exist in a vacuum. World events, economic changes, press coverage, and seasonality can affect pricing, sales volume, and even the overall value of a home. For instance, winter tends to be slow for real estate. The reason is simple, human, and entirely unrelated to the homes themselves. People don’t want to move during the holidays, and most major holidays occur during the winter months. As a result, fewer homes are bought and sold.
We can expect sales to continue to slow throughout the end of the year, and even into the start of the next, but the spring surge should pick up starting around March of 2024.
Interest rate changes have also had a major impact on the market this year. Fixed 30 year rates rose to above 8% in early October, marking a 23 year high. With rates again falling to levels last seen in July, many prospective buyers may now re-enter the market due to increased affordability. As a result, the average time on market has fallen from a high of 78 days to 57 days as of October 2023.
Key Takeaways for Jacksonville
The Jacksonville market is healthy, though somewhat flat with a slight downturn in values and average sales prices, even when seasonally adjusted. However, lower interest rates and limited inventory continue to drive a sellers market, ideal for fix & flip investors, and those homeowners who didn’t purchase during the period of historically low rates.
Jacksonville continues to be a top destination for businesses, with major fintech, transportation, banking, and logistics offices headquartered in the city. Additionally, Jacksonville is a top destination in the medical field, with a number of high end medical facilities such as the Mayo Clinic. High paying white-collar job opportunities, beaches, and low taxes have all contributed to Jacksonville’s growth, and the forecast is nothing but positive for 2024!