The housing market in Northeast Florida continued to heat up in August, the most recent month for which there are figures.
Historically high sales prices and a shortage of available housing have forced many potential buyers to rent, which in turn is driving up rental rates. In fact, the cost of leasing often exceeds the cost of securing a home mortgage.
It’s no secret that people are moving into Florida at a high rate.
The population of St. Johns County was 254,267 in 2019, according to the state’s Office of Economic & Demographic Research. In 2020, that number rose to 261,762, a 3% increase.
And that means an increase in demand for housing.
In August, new listings in Northeast Florida rose to 3,787, a 5.7% increase from the same month last year. At the same time, pending sales dipped 2%, inventory levels fell 37.2% and the average number of days a home is on the market was down 50%.
What is not down is price. The average sales price was at $362,699. Yet, 41% of the properties on the market sold for more than the asking amount.
The housing affordability index for August showed that homes on the First Coast were 13.2% less affordable than one year ago.
Prices in much of St. Johns County exceed the regional figure.
In August, the average price of a home in the northeastern part of the county was $585,000, up by 66.5% over August 2020. In Ponte Vedra Beach, South Ponte Vedra Beach, Vilano Beach and Palm Valley, the average price was $635,000. In Nocatee, it was $525,000.
In those local markets, the percentage of the list price received and the percentage of the properties sold over the list price were up. The number of days on the market and inventory of available homes for sale were significantly down.
Skyrocketing rent
Many sellers taking advantage of escalating sales prices have discovered the downside of the hot real-estate market. Unable to find available homes for sale, many have been forced to rent. Between the number of people unable to find available housing and these former homeowners, the demand for rental units has sent rates soaring.
The average monthly rent for August in St. Johns County is $1,623 for a 1,034-square-foot apartment, a 6% increase compared to a year ago, according to RentCafe.com.
“As challenging as it is for buyers to secure a home that fits their lifestyle and budget, renters who are seeking affordable accommodations are watching their options become less available and affordable,” said Missi Howell, president of the Northeast Florida Association of Realtors. “The best way to protect inflationary housing increases is to own your own home. Homeownership is built-in ‘rent control,’ which is one of the reasons buying a home is a person’s first step into wealth building.”
Construction woes
The solution to the shortage of homes appears to be construction of more, but even that isn’t as simple as it seems.
Housing starts nationwide declined by 7% in August, according to the U.S. Department of Commerce. Single-family home construction was down by 4.5% and multi-family home construction fell by 13%.
Builders have blamed labor shortages, rising material costs and supply-chain disruptions. In fact, the rising cost and decreasing availability of materials have forced many construction projects to be paused.
