The Greater Jacksonville area real estate market is healthy and ripe for continued growth, according to local real estate brokers.
“In the past two years compared with the previous two years, we’ve seen a 54 percent increase in sales numbers and a 33 percent increase in volume of sales,” broker Krista Fracke told nearly 100 real estate agents about her firm’s recent success at a breakfast last week organized by First Guaranty Mortgage Corporation. “I think that speaks volumes about the market and how much it’s come back.”
Fracke, who is the owner of the boutique real estate firm Krista Fracke Jacksonville Real Estate Co., also referenced trends and data compiled by real estate websites Trulia and Zillow that conclude Jacksonville is the fifth fastest-growing city in the United States. She said people are moving to the area in droves because they can get more value from the area’s relatively lower home prices.
Fracke was one of six Jacksonville area brokers to participate in a panel discussion at the May 18 breakfast and share her insights with the local agents about the region’s real estate market. Joining her on the panel at the Ponte Vedra Lodge & Club were Kim Davis of Ponte Vedra Beach Realty, James Valenti of Re/Max Unlimited, Mary Ann Bongiorno of Watson Realty Corp., Mark Dilworth of Keller Williams Realty and Eileen Ferrell McVeigh of Re/Max Coastal. Aaron Bacus of First Guaranty Mortgage Corporation organized the event and moderated the discussion.
Bongiorno echoed Fracke’s confidence in the Jacksonville market, noting that her Watson Realty office is seeing several people from South Florida move to the area to reap more value. She also said a continuation of buyers is coming in from the Northeast corner of the country. In general, she explained that a large population of Baby Boomers is selling its homes and investing in real estate in Florida, which she said is the most popular location in the country for people making a move. A flow of international money is specifically flowing into Jacksonville, she added.
Dilworth of Keller Williams agreed, noting that April was for many in the room the most financially successful April they’ve seen in the Jacksonville market since they started working in the industry. Although a small dip in the cyclical real estate market is always possible, he doesn’t foresee the growth stopping with population figures predicted to increase over the next few years. “All in all, it’s very rosy,” he said.
In justifying the region’s growth, Dilworth explained that few other cities on the Eastern Seaboard possess the number of features that make Jacksonville so attractive to potential buyers, including an international airport, a port, developmental land for corporations, a professional football team, the PGA Tour and ATP Tour presences and strong schools, among other benefits.
The panel also discussed hot price points in the area. Davis of Ponte Vedra Beach Realty explained that homes priced up to $500,000 are selling quickly, while a glut of inventory currently exists in the luxury market with homes priced at $1.5 million and above. She said many people are currently placing their investments in the stock market, instead of the luxury home market. She also noted that foreign investors are coming in with cash and setting a precedent in the local market that the local economy can’t meet.
Valenti of Re/Max Unlimited added that recently renovated, “ready-to-go” homes in Ponte Vedra Beach neighborhoods like Marsh Landing and Plantation Oaks are selling quickly, even if they’re overpriced. “People are paying for that work to be done,” he said. On the other hand, he noted homes in need of renovation that are priced low are also receiving significant interest. It’s those homes in the middle, he said, that seem to be sitting on the market. Valenti added that he doesn’t think there’s a lack of affordable housing in the area.
The panelists also shared their insights on potential challenges for the market, such as the moving coastal construction line due to storms like Hurricane Matthew. Ferrell McVeigh of Re/Max Coastal said there will be new environmental and insurance-related restrictions and requirements that they’ll have to manage with oceanfront properties. Davis added that insurance companies are now hesitant to insure coastal homes, noting that customers planning to demolish homes damaged by the storm may be forced to move inward to abide by the new coastal construction line. She suggested that clients buying teardowns should maintain the original footprints of the homes and then rebuild, instead of demolishing and starting over.
Ferrell McVeigh doesn’t think increasing traffic another potential challenge for the market is impacting sales. She said several people moving to the area are coming from locations with “real traffic,” such as Los Angeles, Chicago and New York. “I tell people you have college-level traffic, and we just have middle school traffic,” she remarked. She did acknowledge, however, that a long-term solution will be needed to address the issue.
One temporary impediment of growth could be the Federal Reserve’s impending increase in interest rates. But the brokers mostly agreed that buyers, sellers and ultimately the market will adapt accordingly.
“I think it will slow it down, but then it just comes back to math,” said Dilworth. “If the interest rates go up, then your income needs to come up or home prices might go down. It will settle back into that new normal.”