By Michele Newbern Gillis
Staff Writer
Low interest rates and an appreciation of value made 2003 a good year. And the good times will keep rolling, said Charlie Clark, the veteran market analyst who spoke at the Northeast Florida Builders Association’s Sales and Marketing Council breakfast last month at the University Center at the University of North Florida. “The next five years, in my opinion, will be better than the last five years. I feel very confident that we will be at 15,000 starts in this market in less than four years.
“Relocation Magazine named Jacksonville as the No. 3 city nationally for relocation,” he said. “We were also listed as the eighth best city to move a business to in the United States.”
You can’t talk about the future of Jacksonville without mentioning the upcoming Super Bowl. Clark acknowledged that it will have an incredible impact on the city.
“I don’t know if you have any idea of the fantastic impact that the Super Bowl will have on this community,” he said. “It will blow your mind. Eight hundred million people will be exposed to Jacksonville. They will see the St. Johns River and the Atlantic Ocean and that’s what sells our property.”
He discussed how others come to Jacksonville and are so impressed with the amount of house you can buy compared to other cities at the same price.
This can be attributed to the 5.66 percent interest rate, he said.
“If you look at the housing affordability issue for a household income of $60,000, with interest rates below 6 percent, they can qualify for a house about $180,000. If interest rates rise to 8 percent, they can only qualify for a house about $130,000. So, you see how the interest rates and the affordability issue begin to work hand in hand. Now is the best time to buy,” he said.
Clark said that there were 11,106 annual starts last year, a 29.1 percent increase over the year before.
“In Jacksonville, both the starts and closing rates continue reaching high records,” said Clark.
Though some think Jacksonville is very reasonably priced, prices are rising.
According to Clark, significant base price growth continues in Jacksonville particularly across the $150,000 to $400,000 price ranges. Duval County has lead the way in pricing growth although all market areas and virtually all submarkets are showing substantial increases in base pricing.
According to Clark, the biggest problem facing homebuilders is regulations and the next big problem he sees is the availability of land.
“The big builders are now buying up land two to five years in advance of need with the idea that they will trade some of those lots for better lots positions in other areas,” said Clark. “The meaning of that is that it is more difficult for the small builders to do that.”
Overall, he said that the Jacksonville housing market continues to boom, despite a relatively weak employment growth trend.
“As corporate expansions resume, the North Florida area should be well positioned to capture new job formations,” said Clark. “If interest rates don’t rise significantly, the area’s housing market will continue to expand.”