The Truth About North Florida’s Real Estate Climate
Earlier this year, the Northeast Florida Association of Realtors (NEFAR) adopted a campaign, titled “Put Your Money Where Your Life Is” that aims to provide a true view of what is taking place in our area marketplace. The consensus among industry experts is that the market is stabilizing – maybe not as quickly as originally anticipated – but that recovery is on the way.
In spite of ominous national media reports, the fact remains that last year was not as bad for Northeast Florida real estate as one might think – especially as compared to the rest of the state. When compared to the boom of 2004, the statistical difference is staggering. However, in reality, 2007 was the fourth highest year for Northeast Florida real estate sales in the past 20 years.
NEFAR published the following report to provide you with a realistic idea of what is going on in our market, backed up by expert analysis.
WHAT ARE THE EXPERTS SAYING?
Although experts acknowledge that Northeast Florida is experiencing a downturn, they concur that our area economy and real estate industry are not struggling like other parts of the state. Also, our area is ranked high by major publications such as Forbes.
Northeast Florida Business Climate
Housing Outlook Better than the Rest of the State
In an article in the Aug. 15 edition of The Florida Times-Union titled “First Coast homes leading recovery?,” it was reported that “The median price of existing Jacksonville-area homes rose for sales between April and June, according to figures released Thursday by the Florida Association of Realtors. The median sales price of single-family homes sold by Realtors was $191,700, which was 3.5 percent higher than the $185,300 posted for the first three months of the year.” The president of the statewide organization, Chuck Bonfiglio, was quoted as saying, “I would expect that Jacksonville might quietly lead the recovery. Jacksonville did not have the same price run-up that South and Central Florida did and as a result did not get caught up in the hysteria.”
The Florida Times-Union recently reported that the first half of 2008 ended with “monthly upticks” in the numbers of new and existing homes sales and median prices. “It’s a powerful indicator of market momentum that we’re starting to move in a (positive) direction,” said Ray Rodriguez, owner of the Real Estate Strategy Center of North Florida, Inc. “Time will tell if it’s a trend, but it’s something good to value for the time being.”
“Economist Hank Fishkind said the worst of the current recession is yet to come, while Mayor John Peyton insisted the long-range outlook is good, especially based on the current activity and growth potential at the port…While Northeast Florida isn’t immune to the recession, Fishkind did say its non-real-estate-based economy keeps the area more insulated than other parts of the country. The area’s banking, insurance and ‘back office’ industry helps negate some of the real estate slowdown.” Fishkind also said that “Jacksonville is still better off than other parts of the state where growth is virtually stagnant…The housing market will be better in 2009 and better still in 2010’… ”
Forbes.com ranked Jacksonville eighth of its 10 Best Cities for Bargain House-hunters. “Jacksonville didn't go through an obscene speculation boom, making its recovery cycle far less daunting than other Florida spots. Job growth isn't outstanding, about average for the cities we measured, but the foreclosure rate is lower than any of the Florida cities we looked at, making the high inventory rate more likely to improve than get worse.”
Forbes also recently listed Jacksonville ninth in its Top 10 Cities to Buy a Home. While surveying the 40 largest metropolitan area housing metrics where home prices have shown appreciation in the last two years, the magazine also measured vacancy rates, appreciation rates and rent rates vs. mortgage payments at the median level.
“The monthly uptick in existing home sales and prices in Jacksonville continued in the month of June, while a comparison to the same time last year again showed decline. The Florida Association of Realtors data released today showed 1,013 single-family homes sold in June as compared to 992 in May, an increase of 2.1 percent…The median sales price was $197,000 compared to $193,200 in May. ”
Job Growth, Strong Wages Anticipated in Jacksonville Area
Jacksonville was ranked #26 in the Forbes 100 Best Cities for Jobs in 2008.
“The Jacksonville MSA is expected to show moderate growth in the economic indicators. Per capita income and average annual wage will be strong relative to
other metropolitan areas, with a level of 33.6 and a growth rate of 3.6%. Personal income will average 5.1% annually and housing starts are expected to grow 6%. ”
Overall Quality of Life
Bizjournals ranked Jacksonville ninth in its top ten list of the nation’s 50 largest metro areas. The ranking was based on pollution levels, climate, crime, unemployment rate, finances (including income levels and monthly home payments) and health.
Forbes.com listed Jacksonville as number three in its top ten list of America’s Cleanest Cities – one of four Florida metro areas on the list. The study was based on air quality and ozone levels, water cleanliness and per-capita spending on Superfund site cleanup and solid-waste management. Jacksonville was “the only major city with a top three ranking in all categories.”
Forbes.com also ranked Jacksonville fourth in America’s Best Cities for the Outdoors based on spending per resident, park land as a percentage of city land, number of recreation facilities, precipitation, sunshine, temperature extremes and air quality.
Economic Outlook Will Impact Housing Market Rebound
“Deutsche Bank has chosen Jacksonville for a 1,000-employee office, giving the city another high-impact addition to its financial services industry.” Jerry Mallot, executive director of Cornerstone – an economic development partnership program of the Jacksonville Chamber of Commerce – “called Deutsche Bank a ‘major deal’ for Jacksonville…Deutsche Bank will fill out its 1,000-employee hub by the end of 2011 with an average wage of $49,200.”
“Deutsche Bank is not the only European company showing an interest in setting up business in Jacksonville. Prospects talking with the Jacksonville Regional Chamber of Commerce include a major cold storage logistics company, a European container shipping line, two French aerospace manufacturers and two British companies. They could add up to 500 more high-paying jobs to the 1,000 that Deutsche Bank is bringing to the local economy… ”
Financial News & Daily Record reports that Jacksonville Mayor John Peyton gives high marks to the port, which he anticipates will play a vital role in the area economy over the foreseeable future, citing that completion of the Panama Canal widening project in 2015 will quickly make the Jacksonville port the third largest on the East Coast.”
According to The Florida Times-Union, “The expansion of two foreign shipping lines and annual growth at Jacksonville’s port has persuaded a South African company to build a facility on the Northside. Big Life Trucks will open a 33,000-square-foot warehouse and three acres of container storage...” The article quoted Mike Breen, director of Cornerstone (the Chamber’s economic development arm), as saying, “This is an example that the international community is taking Jacksonville seriously now.”
“Long range development plans for Cecil Commerce Center, part of which borders north-central Clay County, may include an additional runway to allow simultaneous takeoffs and landings as well as additional general aviation support facilities. Also,
Cecil managers are seeking aviation, aerospace, manufacturing, distribution and logistics and information technology companies to join Boeing and the other businesses that have located at the former naval air station since it was decommissioned in 1999."
“By now everyone is aware of the growth taking place at Jacksonville’s port, with the addition of Japan’s Mitsui O.S.K. and Korea’s Hanjin shipping companies. Our region is poised to gain thousands of jobs and surpass many of our competitor cities with growth in the logistics sector. In 2007 the number of prospects from ‘international’ locations grew by almost 10 percent and we expect to see that trend continue. In fact, one out of every four prospects we work with are foreign-owned companies.”
“…what soon will become a big economic engine for Jacksonville – the site of the terminal that will house the operations of the giant Japanese shipping company Mitsui O.S.K. Lines Ltd…This time next year, Smolder said, the terminal will be operational...the creation of 1,800 good-paying jobs created at the port…Another 4,000 or so spin-off jobs. Those new jobs will help the housing market rebound… ”
“…another piece of property that is slated to house the operations of another Asian shipping company, Hanjin of Korea…the Hanjin terminal could be up and running in three years. That, of course, would mean even more new jobs that would further strengthen Jacksonville's economy.”
“Jacksonville's three marine ports see more than 8 million tons of cargo annually, including more than 700,000 shipping containers and 600,000 automobiles. The traffic is expected to double within the next year as Japanese shipping company Mitsui O.S.K. Lines Ltd. begins operations at Dames Point. In coming years, traffic could triple with the addition of Korean shipping line Hanjin… by 2011.”
New York-based Fortress Investment Group, which owns Florida East Coast Railway and RailAmerica Inc., has plans to expand its rail operations in Jacksonville.
Local Inflation, Taxes Lower than National/State Averages
The Florida Times-Union reported that the Jacksonville region’s 1.4 percent inflation rate increase for the first six months of 2008 year is lagging behind the national inflation rate of 5.5 percent.
Florida Times-Union columnist Ron Littlepage reported that taxes in Duval County are low compared to other Florida metros. “The millage rate in Hillsborough County was 21.4213 mills; in Miami-Dade, 22.1551 mills; in Pinellas County, 23.8983 mills; and in Orange County, 18.2770 mills. The other large counties levy impact fees on development: Hillsborough, $5,894; Miami-Dade, $4,320; Orange County, $7,339; and Pinellas, $2,066. Impact fees in Duval: zero.”
Florida/regional market analysis
”While the day-to-day headlines will continue to focus on the pain in the market, the broader context of Florida’s real estate story is somewhat more hopeful. Housing prices have, in many markets, adjusted quickly to more or less 2003 levels. The free fall in prices has given way to the emergence of a slow, ‘bumping-along-the-bottom’-type market that will see inventories of for-sale homes shrink back to normal levels over the next couple years.”
The latest Real Trends Housing Market Report indicates that every region of the country has experienced improvement over the previous month. “The South improved most with closed sales falling only 18.2% from June 2007 versus the 32.1% drop from May 2007 to May 2008.”
WHAT DOES THIS MEAN IN PLAIN ENGLISH?
Every real estate market is different – and Northeast Florida’s active economy and lifestyle equates to a more stable market that is less affected than other areas throughout the state.
Northeast Florida real estate is more competitive than most areas of the state. As in any buyer’s market, homes are more affordable. However, we have an upper edge since the Jacksonville region was recently ranked by Forbes as number eight of the 10 Most Affordable Cities for Bargain House-Hunters.
Experts feel that Florida’s housing market is bumping at the bottom, equating to great deals for potential homeowners. Team this with low interest rates and the fact that – despite the issues we’ve seen with mortgage companies - consumers with good credit can still easily get loans.
SUPPORTING FACTS – A RECAP
Northeast Florida Market analysis
• Florida economist and market analyst Hank Fishkind feels that Jacksonville is much better off than the rest of the state and that the housing market will continue to improve over the next couple of years.
• Forbes.com listed Jacksonville ninth in its Best Cities to Buy a Home.
• Forbes.com ranked Jacksonville eighth of its 10 Best Cities for Bargain House-hunters.
• Jacksonville is one of the ten least stressful metro areas in the U.S.
• Jacksonville is number three among America’s Cleanest Cities.
• Forbes.com ranked Jacksonville fourth in America’s Best Cities for the Outdoors.
Economic indicators for Northeast Florida
• Jacksonville was ranked #26 in the Forbes 100 Best Cities for Jobs in 2008.
• Giant shipping company, Mitsui O.S.K. will add 1800 new jobs to Northeast Florida this year and another approximately 4,000 spin-off jobs .
• Deutsche Bank has selected Jacksonville for a new 1,000-employee office, to be up and running by the end of 2011 with an average wage of $49,200.
• Mayor John Peyton predicts that when the Panama Canal widening project is complete in 2015, the Jacksonville port will be the third largest on the East Coast.
• New York-based Fortress Investment Group has plans to expand its rail operations in Jacksonville.
CONCLUSION
As the information in this report indicates, there are great buys right now in Northeast Florida teamed with low interest rates and economic indicators that are favorable for the long-term future of our area housing industry.
Source:NEFAR
In spite of ominous national media reports, the fact remains that last year was not as bad for Northeast Florida real estate as one might think – especially as compared to the rest of the state. When compared to the boom of 2004, the statistical difference is staggering. However, in reality, 2007 was the fourth highest year for Northeast Florida real estate sales in the past 20 years.
NEFAR published the following report to provide you with a realistic idea of what is going on in our market, backed up by expert analysis.
WHAT ARE THE EXPERTS SAYING?
Although experts acknowledge that Northeast Florida is experiencing a downturn, they concur that our area economy and real estate industry are not struggling like other parts of the state. Also, our area is ranked high by major publications such as Forbes.
Northeast Florida Business Climate
Housing Outlook Better than the Rest of the State
In an article in the Aug. 15 edition of The Florida Times-Union titled “First Coast homes leading recovery?,” it was reported that “The median price of existing Jacksonville-area homes rose for sales between April and June, according to figures released Thursday by the Florida Association of Realtors. The median sales price of single-family homes sold by Realtors was $191,700, which was 3.5 percent higher than the $185,300 posted for the first three months of the year.” The president of the statewide organization, Chuck Bonfiglio, was quoted as saying, “I would expect that Jacksonville might quietly lead the recovery. Jacksonville did not have the same price run-up that South and Central Florida did and as a result did not get caught up in the hysteria.”
The Florida Times-Union recently reported that the first half of 2008 ended with “monthly upticks” in the numbers of new and existing homes sales and median prices. “It’s a powerful indicator of market momentum that we’re starting to move in a (positive) direction,” said Ray Rodriguez, owner of the Real Estate Strategy Center of North Florida, Inc. “Time will tell if it’s a trend, but it’s something good to value for the time being.”
“Economist Hank Fishkind said the worst of the current recession is yet to come, while Mayor John Peyton insisted the long-range outlook is good, especially based on the current activity and growth potential at the port…While Northeast Florida isn’t immune to the recession, Fishkind did say its non-real-estate-based economy keeps the area more insulated than other parts of the country. The area’s banking, insurance and ‘back office’ industry helps negate some of the real estate slowdown.” Fishkind also said that “Jacksonville is still better off than other parts of the state where growth is virtually stagnant…The housing market will be better in 2009 and better still in 2010’… ”
Forbes.com ranked Jacksonville eighth of its 10 Best Cities for Bargain House-hunters. “Jacksonville didn't go through an obscene speculation boom, making its recovery cycle far less daunting than other Florida spots. Job growth isn't outstanding, about average for the cities we measured, but the foreclosure rate is lower than any of the Florida cities we looked at, making the high inventory rate more likely to improve than get worse.”
Forbes also recently listed Jacksonville ninth in its Top 10 Cities to Buy a Home. While surveying the 40 largest metropolitan area housing metrics where home prices have shown appreciation in the last two years, the magazine also measured vacancy rates, appreciation rates and rent rates vs. mortgage payments at the median level.
“The monthly uptick in existing home sales and prices in Jacksonville continued in the month of June, while a comparison to the same time last year again showed decline. The Florida Association of Realtors data released today showed 1,013 single-family homes sold in June as compared to 992 in May, an increase of 2.1 percent…The median sales price was $197,000 compared to $193,200 in May. ”
Job Growth, Strong Wages Anticipated in Jacksonville Area
Jacksonville was ranked #26 in the Forbes 100 Best Cities for Jobs in 2008.
“The Jacksonville MSA is expected to show moderate growth in the economic indicators. Per capita income and average annual wage will be strong relative to
other metropolitan areas, with a level of 33.6 and a growth rate of 3.6%. Personal income will average 5.1% annually and housing starts are expected to grow 6%. ”
Overall Quality of Life
Bizjournals ranked Jacksonville ninth in its top ten list of the nation’s 50 largest metro areas. The ranking was based on pollution levels, climate, crime, unemployment rate, finances (including income levels and monthly home payments) and health.
Forbes.com listed Jacksonville as number three in its top ten list of America’s Cleanest Cities – one of four Florida metro areas on the list. The study was based on air quality and ozone levels, water cleanliness and per-capita spending on Superfund site cleanup and solid-waste management. Jacksonville was “the only major city with a top three ranking in all categories.”
Forbes.com also ranked Jacksonville fourth in America’s Best Cities for the Outdoors based on spending per resident, park land as a percentage of city land, number of recreation facilities, precipitation, sunshine, temperature extremes and air quality.
Economic Outlook Will Impact Housing Market Rebound
“Deutsche Bank has chosen Jacksonville for a 1,000-employee office, giving the city another high-impact addition to its financial services industry.” Jerry Mallot, executive director of Cornerstone – an economic development partnership program of the Jacksonville Chamber of Commerce – “called Deutsche Bank a ‘major deal’ for Jacksonville…Deutsche Bank will fill out its 1,000-employee hub by the end of 2011 with an average wage of $49,200.”
“Deutsche Bank is not the only European company showing an interest in setting up business in Jacksonville. Prospects talking with the Jacksonville Regional Chamber of Commerce include a major cold storage logistics company, a European container shipping line, two French aerospace manufacturers and two British companies. They could add up to 500 more high-paying jobs to the 1,000 that Deutsche Bank is bringing to the local economy… ”
Financial News & Daily Record reports that Jacksonville Mayor John Peyton gives high marks to the port, which he anticipates will play a vital role in the area economy over the foreseeable future, citing that completion of the Panama Canal widening project in 2015 will quickly make the Jacksonville port the third largest on the East Coast.”
According to The Florida Times-Union, “The expansion of two foreign shipping lines and annual growth at Jacksonville’s port has persuaded a South African company to build a facility on the Northside. Big Life Trucks will open a 33,000-square-foot warehouse and three acres of container storage...” The article quoted Mike Breen, director of Cornerstone (the Chamber’s economic development arm), as saying, “This is an example that the international community is taking Jacksonville seriously now.”
“Long range development plans for Cecil Commerce Center, part of which borders north-central Clay County, may include an additional runway to allow simultaneous takeoffs and landings as well as additional general aviation support facilities. Also,
Cecil managers are seeking aviation, aerospace, manufacturing, distribution and logistics and information technology companies to join Boeing and the other businesses that have located at the former naval air station since it was decommissioned in 1999."
“By now everyone is aware of the growth taking place at Jacksonville’s port, with the addition of Japan’s Mitsui O.S.K. and Korea’s Hanjin shipping companies. Our region is poised to gain thousands of jobs and surpass many of our competitor cities with growth in the logistics sector. In 2007 the number of prospects from ‘international’ locations grew by almost 10 percent and we expect to see that trend continue. In fact, one out of every four prospects we work with are foreign-owned companies.”
“…what soon will become a big economic engine for Jacksonville – the site of the terminal that will house the operations of the giant Japanese shipping company Mitsui O.S.K. Lines Ltd…This time next year, Smolder said, the terminal will be operational...the creation of 1,800 good-paying jobs created at the port…Another 4,000 or so spin-off jobs. Those new jobs will help the housing market rebound… ”
“…another piece of property that is slated to house the operations of another Asian shipping company, Hanjin of Korea…the Hanjin terminal could be up and running in three years. That, of course, would mean even more new jobs that would further strengthen Jacksonville's economy.”
“Jacksonville's three marine ports see more than 8 million tons of cargo annually, including more than 700,000 shipping containers and 600,000 automobiles. The traffic is expected to double within the next year as Japanese shipping company Mitsui O.S.K. Lines Ltd. begins operations at Dames Point. In coming years, traffic could triple with the addition of Korean shipping line Hanjin… by 2011.”
New York-based Fortress Investment Group, which owns Florida East Coast Railway and RailAmerica Inc., has plans to expand its rail operations in Jacksonville.
Local Inflation, Taxes Lower than National/State Averages
The Florida Times-Union reported that the Jacksonville region’s 1.4 percent inflation rate increase for the first six months of 2008 year is lagging behind the national inflation rate of 5.5 percent.
Florida Times-Union columnist Ron Littlepage reported that taxes in Duval County are low compared to other Florida metros. “The millage rate in Hillsborough County was 21.4213 mills; in Miami-Dade, 22.1551 mills; in Pinellas County, 23.8983 mills; and in Orange County, 18.2770 mills. The other large counties levy impact fees on development: Hillsborough, $5,894; Miami-Dade, $4,320; Orange County, $7,339; and Pinellas, $2,066. Impact fees in Duval: zero.”
Florida/regional market analysis
”While the day-to-day headlines will continue to focus on the pain in the market, the broader context of Florida’s real estate story is somewhat more hopeful. Housing prices have, in many markets, adjusted quickly to more or less 2003 levels. The free fall in prices has given way to the emergence of a slow, ‘bumping-along-the-bottom’-type market that will see inventories of for-sale homes shrink back to normal levels over the next couple years.”
The latest Real Trends Housing Market Report indicates that every region of the country has experienced improvement over the previous month. “The South improved most with closed sales falling only 18.2% from June 2007 versus the 32.1% drop from May 2007 to May 2008.”
WHAT DOES THIS MEAN IN PLAIN ENGLISH?
Every real estate market is different – and Northeast Florida’s active economy and lifestyle equates to a more stable market that is less affected than other areas throughout the state.
Northeast Florida real estate is more competitive than most areas of the state. As in any buyer’s market, homes are more affordable. However, we have an upper edge since the Jacksonville region was recently ranked by Forbes as number eight of the 10 Most Affordable Cities for Bargain House-Hunters.
Experts feel that Florida’s housing market is bumping at the bottom, equating to great deals for potential homeowners. Team this with low interest rates and the fact that – despite the issues we’ve seen with mortgage companies - consumers with good credit can still easily get loans.
SUPPORTING FACTS – A RECAP
Northeast Florida Market analysis
• Florida economist and market analyst Hank Fishkind feels that Jacksonville is much better off than the rest of the state and that the housing market will continue to improve over the next couple of years.
• Forbes.com listed Jacksonville ninth in its Best Cities to Buy a Home.
• Forbes.com ranked Jacksonville eighth of its 10 Best Cities for Bargain House-hunters.
• Jacksonville is one of the ten least stressful metro areas in the U.S.
• Jacksonville is number three among America’s Cleanest Cities.
• Forbes.com ranked Jacksonville fourth in America’s Best Cities for the Outdoors.
Economic indicators for Northeast Florida
• Jacksonville was ranked #26 in the Forbes 100 Best Cities for Jobs in 2008.
• Giant shipping company, Mitsui O.S.K. will add 1800 new jobs to Northeast Florida this year and another approximately 4,000 spin-off jobs .
• Deutsche Bank has selected Jacksonville for a new 1,000-employee office, to be up and running by the end of 2011 with an average wage of $49,200.
• Mayor John Peyton predicts that when the Panama Canal widening project is complete in 2015, the Jacksonville port will be the third largest on the East Coast.
• New York-based Fortress Investment Group has plans to expand its rail operations in Jacksonville.
CONCLUSION
As the information in this report indicates, there are great buys right now in Northeast Florida teamed with low interest rates and economic indicators that are favorable for the long-term future of our area housing industry.
Source:NEFAR
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