Heads up on new home prices in NE Florida (Jacksonville: short sales, real estate)

[ShakenStirred]

As many of you know, I work for a large percentage of both local and national homebuilders as a subcontractor in a variety of trades.

I am also an experienced investor of over 20 years and follow the financial markets closely.

You can bookmark this posting, and hang me out to dry if I'm wrong, but I'm going to tell you that between right here and now, until about the end of this year, maybe a little earlier, is the bottom of the housing market in our part of the State.

Most of the builders I have talked with are getting ready to start raising prices again next year. The inventory of new homes has been reduced from about a 3 year supply to right now about a 6 month supply, which is very manageable from a builders viewpoint. Several have experienced quite an increase in sales the past 2 months as well, and the only thing preventing a full blown recovery in our market right now is that we have over 7000 short sales and foreclosures in the market. Take away these (and they will go away at some point), and home prices would be steadily increasing and we would not even be having a downturn.

Add to this the fact that interest rates have hit bottom, and may in fact start to creep up soon, I would advise anyone sitting on the sidelines waiting for the bottom to take a hard look at where we are in this market right now, because I think we are there.

No matter what, Jacksonville is still a beautiful and growing city, and we were one of the last markets to get hit by the downturn in housing, and I believe history will show us to be one of the first to recover. There is still an enormous amount of growth coming from our ever increasing visibility as an international port, and as these companies move here, jobs are created, and homes are bought.

You heard it here first folks, so if you view your home as an investment, this is buy low time.

[mrpvb]

Originally Posted by ShakenStirred

As many of you know, I work for a large percentage of both local and national homebuilders as a subcontractor in a variety of trades.

I am also an experienced investor of over 20 years and follow the financial markets closely.

You can bookmark this posting, and hang me out to dry if I'm wrong, but I'm going to tell you that between right here and now, until about the end of this year, maybe a little earlier, is the bottom of the housing market in our part of the State.

Most of the builders I have talked with are getting ready to start raising prices again next year. The inventory of new homes has been reduced from about a 3 year supply to right now about a 6 month supply, which is very manageable from a builders viewpoint. Several have experienced quite an increase in sales the past 2 months as well, and the only thing preventing a full blown recovery in our market right now is that we have over 7000 short sales and foreclosures in the market. Take away these (and they will go away at some point), and home prices would be steadily increasing and we would not even be having a downturn.

Add to this the fact that interest rates have hit bottom, and may in fact start to creep up soon, I would advise anyone sitting on the sidelines waiting for the bottom to take a hard look at where we are in this market right now, because I think we are there.

No matter what, Jacksonville is still a beautiful and growing city, and we were one of the last markets to get hit by the downturn in housing, and I believe history will show us to be one of the first to recover. There is still an enormous amount of growth coming from our ever increasing visibility as an international port, and as these companies move here, jobs are created, and homes are bought.

You heard it here first folks, so if you view your home as an investment, this is buy low time.

In addition to what you've said, so many other places in FLA have become so over crowded and undesirable that many people from those places are giving the JAX area a look. JAX real estate never really took as bad of a hit as other areas and IMHO is ready to begin going up, it could be that JAX will be the next "hot" place to be in FLA

[riveree]

Even here on our little forum , we see a small but steady flow of people relocating to Jax/Jax area who are researching neighborhoods and buying homes.

As Shaken said, there are some homes on the market that need to be flushed out in order to see the true picture. We've all seen those homes that sit on the market forever because they're priced too high while others are priced right and they move fairly quickly - I've seen this contrast in my own neighborhood, as I'm sure many of you have.

It's pretty amazing what your money can buy right now in Jacksonville.

[titaniummd]

Many of the new construction houses in my neighborhood have sold for face value but the builders have given the buyers incentives. This is something that a reseller has a difficult time matching. If there are still a lot of empty lots in your neighborhood, and builders are giving incentives, it could be harder for the resale markets.

[tjax1000]

Originally Posted by mrpvb

In addition to what you've said, so many other places in FLA have become so over crowded and undesirable that many people from those places are giving the JAX area a look. JAX real estate never really took as bad of a hit as other areas and IMHO is ready to begin going up, it could be that JAX will be the next "hot" place to be in FLA

Very true, Jax may be the next spot. Eventually, Duval county will be completely built out, the same way other areas (Broward, Pinellas, etc.) are. However, as it stands there is a surprising amount of undeveloped areas. I'm not sure how long it will take, but I do know that just a few years back I was riding my bike on Gate Parkway which was pretty much a ghost road with no developments. I even remember seeing grazing cattle.

[Magnolia Bloom]

Shaken,

I agree. From a post that I made on the Florida forum:

//www.city-data.com/forum/flori...ml#post4236314Hopeful signs- have several properties under contract at a condo where I work and several building tradesmen that I have called to have work done are telling me that they are busy with new construction.

[gradco2004]

Duval County is projected to be built out by 2040.

This map is very ugly... looks like a disease outbreak map... but it gives you an idea of what the state will look like about 30 years from now.

Metro Jacksonville - Florida In 2060: Not a pretty picture?

[KerryB]

I'm not doubting your expertise, but I think there are bigger things at play here than just supply.

The economy & the dollar are tanking right now, there's a looming energy crisis with gas prices going up up up, there's an expensive war going on with no end in sight currently with Iran's turn probably being next & so on. People are scared to buy anything even semi-expensive right now, whether it be cars (some companies are teetering on the brink of extinction) & let alone big expensive homes in the suburbs (which is most of Jax). Much of the middle class are struggling just to keep food on their table & gas in their tanks so they can go to work.

So, not to be a downer, but I personally don't see these problems just up & going away by years end because all this stuff is connected. I see it getting worse actually. And for a town like Jax, which is sooo spread out to where everything is far away from everything, I don't see that as a big draw in this kind of situation. I sure know its killing my pocketbook, even in pretty efficient cars.

I think this whole thing is gonna have people downsizing everything in their lives. Their cars, the cities they live in, their homes & just the way they go about doing things in general.

[rtt]

How will Nocatee be a thriving community, for instance, with builders backing out (Centex?) and companies laying off people by the thousands? (Citigroup) Won't it be a ghosttown? I hope Shaken's right on this but it seems a bit too rosy....Jax was the last to be hit but maybe that's because its not really on the radar screen to begin with? I know of companies here who are actually trying to hire a few people, and can't attract desireable prospects because they know they can't sell their current homes to relo here.

[riveree]

Originally Posted by KerryB

I'm not doubting your expertise, but I think there are bigger things at play here than just supply.

The economy & the dollar are tanking right now, there's a looming energy crisis with gas prices going up up up, there's an expensive war going on with no end in sight currently with Iran's turn probably being next & so on. People are scared to buy anything even semi-expensive right now, whether it be cars (some companies are teetering on the brink of extinction) & let alone big expensive homes in the suburbs (which is most of Jax). Much of the middle class are struggling just to keep food on their table & gas in their tanks so they can go to work.

So, not to be a downer, but I personally don't see these problems just up & going away by years end because all this stuff is connected. I see it getting worse actually. And for a town like Jax, which is sooo spread out to where everything is far away from everything, I don't see that as a big draw in this kind of situation. I sure know its killing my pocketbook, even in pretty efficient cars.

I think this whole thing is gonna have people downsizing everything in their lives. Their cars, the cities they live in, their homes & just the way they go about doing things in general.

Kerry, I had told myself that I was going to take a mental break and not think about all those things you mentioned, at least not think about them for a week or so...but alas !

You're right, once you step back and look at the bigger picture, you can see that there are much stronger factors at play.

I too think that a new American era is on the rise and a change in how we approach housing is only the tip of the iceberg. That being said, these changes aren't going to happen overnight. Also, there is a good-sized segment of America who have the financial cushion to outrun the scenario you describe for quite some time.

When we consider families who are moving to Jacksonville from South Florida, or Boston, or NYC, they may be moving here with significant equity and possibly relocating here for a high-paying job (or they are retired). For them, their outlook on our local market may be quite different.

I want to be positive and expect some stabilization in our local economy because I'm sure not feeling positive about our national economy. I think Jax is positioned to have a fighting chance at real estate stabilization, at least in the short-term.