Demand for homes continues to be strong even while prices increase.
That means the timing could not be much better for those looking to sell.
Inventory of available properties still is at historically low levels, giving homeowners, real estate agents and builders the powerful opportunity of having an overload of buyers.
Once homes hit the market, they haven’t been sitting for long, although the pace has cooled since 2017.
“In August 2017, 65 days was the average for a home to go under contract,” said a report from the Northeast Florida Association of Realtors. “That figure dropped by 9.2 percent in August 2018, with homes selling in an average of just 59 days.”
And prices aren’t staying steady. They’re rising quickly.
“Concurrent with the sped-up cycle, the trajectory of sales prices is tracking upward,” the NEFAR report says. “The median price for August sales was $220,000, or a 7.3 percent increase over a year ago.”
And as you will read in this issue’s cover stories, homebuilders are steadily developing more lots and planning new subdivisions to keep up with demand.
“While 3,744 new listings were added to the market, overall inventory was just 9,237, which equated to 3.7 months on hand (a balanced market is considered to be five- to six-months on hand),” the NEFAR report says.
Of the many companies constructing homes in the Northeast Florida region, the largest are D.R. Horton, Lennar Homes, Dream Finders Homes, Mattamy Homes and KB Home.
D.R. Horton is the biggest since its been building twice as many as every other local homebuilder, according to a list provided by the Northeast Florida Builders Association.
In 2017. D.R. Horton received 1,758 building permits, while the next two companies – Lennar and Dream Finders – were issued 797 and 659, respectively.
Representatives of D.R. Horton, who responded to questions via email, wrote that they believe the high demand for housing will continue in Northeast Florida.
“With our strong city and county leadership in Northeast Florida, the opportunity for business expansion and job growth is more promising than ever before,” their email states.
D.R. Horton officials say that will lead to more “future opportunities” for both job seekers and business owners in the region.
NEFAR also said in its monthly sales report that “the pace at which homes are selling in Northeast Florida continues to accelerate.”
It says that new home listings in the region increased 2.4 percent to 3,744, pending sales were up 3.6 percent to 2,673 and inventory levels fell 1.4 percent to 9,237 units.
“While some are starting to look for recessionary signs like fewer sales, dropping prices and even foreclosures, others are taking a more cautious and research-based approached to their predictions,” the report says.
NEFAR’s report added that the trends are not showing a “dramatic shift away from what has been experienced over the last several years. Housing starts are performing admirably...prices are still inching upward, supply remains low and consumers are optimistic. The U.S. economy is under scrutiny but certainly not deteriorating.”
Maurice “Mo” Rudolph, chairman of the Urban Land Institute District Council of North Florida, said the growth is “not as crazy” as some think.
Rudolph, who is director of planning and development for The PARC Group, said he believes the area is being developed at a good pace.
“We’re not drastically growing,” he said. “We’re staying steady. We don’t have exponential growth.”
Rudolph added that now is the right time to buy, as prices will just continue to increase, especially as costs for materials are rising because of the ongoing trade and tariffs battle between the United States and China.
Another factor contributing to the housing market growth is the regions rising population.
According to U.S. Census data, Duval County saw a 7.17 percent increase in residents from 2010 to 2016.
The surrounding counties also experienced population rate increases: Clay County, 9.14 percent; Nassau County, 9.97 percent; and St. Johns County, 23.71 percent.
All of these statistics and opinions point to the fact that we have entered into a seller’s market.