Tough times have proven particularly brutal to major real estate markets in Florida, and the city of Jacksonville is no exception.
Home sales are particularly moribund, with 2005’s high of 1,800 monthly sales now cut in half. Similarly, housing starts – which topped out at nearly 2,000 in September and October 2005 – tumbled to less than 200 in February and March of this year. Median home prices are also stinging, with 2005-06 prices of more than $210,000 down dramatically to $150,000.
What’s more, plans for major redevelopment for The Shipyards on the city’s downtown Northbank area are in question. In 2005, City Hall officials struck a deal with LandMar Group LLC to revamp the 40 riverfront acres between Metropolitan Park and the Berkman Plaza residences, but LandMar currently owes the city $3.51 million and the deal could collapse if they don’t pay up.
And on Jacksonville’s Northwest side near Interstate 295 and U.S. Route 1, the Waterbrook Falls subdivision offers its own microcosm of the real estate collapse: The area is seeing a disproportionate amount of short sales and foreclosures, and one of its builders has declared bankruptcy. Engle Homes says it is not only pulling out of Waterbrook Falls, but its remaining 12 Jacksonville metro area projects.
What to make of this turbulence?
“In the short term, I see prices still declining until most of the short-sale and foreclosure inventory is weeded out,” says Krista Fracke, broker and owner of the Krista Fracke Jacksonville Real Estate Co. Fracke’s website can be found at www.kristafracke.com.
Fracke points to the short-sale market as a choke point for recovery. “(The market) is so new to everyone that the banks are just starting to get a handle on their procedures for these types of transactions,” she says.
The Foreclosure Picture
Florida – and in particular South Florida – has been hard-hit with foreclosures since the real estate market began to implode. From March to April of this year, foreclosures spiked by 111 percent in Miami-Dade County, and jumped by 124 percent in Broward County, according to RealtyTrac.
However, Jacksonville is not quite as swamped with foreclosures as its neighbors to the south. “Jacksonville has many foreclosures, but like I said, not near the number as compared with south Florida,” Fracke says. “We have an abundance of condos in Jacksonville and they have been hit the hardest, but single-family home prices are still affordable in many areas even if the home is not in foreclosure.”
That said, foreclosures continue to be a presence in the Jacksonville market, having been on the rise since December 2006. If current statistics are any indication, foreclosures will continue for the near future -- according to the real estate information website Zillow, nearly half of Jacksonville homeowners who bought their property within the last five years owe more than the home is worth.
Home Sales Struggle
Fracke knows that Jacksonville home sales are also suffering. “Jacksonville is definitely seeing a reduction in volume of sales,” she says. “Home are selling, but at substantially reduced prices.”
She estimates that prices have dropped as much as 43 percent in a single year in some areas of Jacksonville. However, better days may be on the horizon, according to the Florida Association of Realtors. The Association recently announced that sales of existing single-family homes increased 7 percent in Jacksonville during the first quarter 2009, with 2,231 single-family homes sold during the period as opposed to 2,080 a year earlier.
However, condo sales were down year-over-year, with 235 sold during the first quarter 2009 as compared to 258 in the first quarter 2008. Median sales prices for single-family homes dropped 17 percent year-over-year, falling to $151,800. Prices for condos were down 13 percent to $125,700.
Investor Presence
The amount of investors in Jacksonville is less than south Florida, according to Fracke. “We have many second-home owners in the area, but not as much speculation took place here as compared to other parts of Florida,” she says.
However, she believes many factors make the area attractive for investment, including easy access from Atlanta and other major East Coast cities, a diverse population, and a pleasant change of seasons. “Additionally, we have activities for every lifestyle: miles of beaches, 60 golf courses, professional football, boating and many cultural activities,” she says. “A homebuyer can find anything from luxury high-rise condos on the beach to newly built homes to a grand historic home in the downtown area.”
Though Fracke acknowledges that times have been tough for Jacksonville, she envisions better news for the long term: “I see Jacksonville’s market stabilizing and a return to steady growth.”
