Data compiled from city and county building departments by the Northeast Florida Builders Association for Clay, Duval, Nassau and St. Johns counties show the greater Jacksonville area on track for another year of growth, although the rate has stabilized.
The data supports the prediction of Brad Hunter with Metrostudy, a market research firm serving the real estate development community, that Florida is on a path to a normal housing market - robust, but realistic.
“The slowdown was postponed by a longer-than-expected period of low mortgage rates and by stronger-than-expected demand,” Hunter said. “Now a return to a normal market is probably beginning. Mind you, the housing market will still be strong this year, but it probably won’t remain in Fantasy Land - 30 percent price appreciation and condos selling out in a weekend.”
At the end of the first quarter 2006, the Jacksonville area reports 3,780 permits, compared to 3,865 for the same period in 2005.
Bryan Lendry, immediate past president of NEFBA and president of Brylen Homes, welcomes the more moderate temperature of the once red-hot market.
“We’ve been on an extended period of stretching our limits as builders,” Lendry said. “We really need a leveling off period.”
Lendry said that with a slow down to a growth rate of 8 percent, which is what experts are predicting for our area, 2006 will still be the third best year for the residential construction industry in recent history.
Metrostudy’s Charles Clark, a veteran real estate analyst based in Jacksonville, concurs.
“The biggest threat to the industry is the perception that this return to a more stable production schedule is a bad thing,” Clark said. “Actually, the gradual increase in interest rates is a sign our economy is regaining strength. People tend to forget that the reason interest rates were reduced is to avert a recession.”
Clark said conditions in Northeast Florida do not necessarily reflect conditions in the rest of the country.
“It’s inaccurate at best, and dangerous at worst, to apply conditions in other markets to the Jacksonville market,” Clark said. “Factors here just aren’t the same. We have record low unemployment. Land is still available. And, our market doesn’t react the same way as other markets, even though we may be similar in size or other features.”
All the counties in the Jacksonville area for which data is obtained showed an increase in March compared to February. The four counties showed an increase from 1,127 permits issued in February to 1,411 permits issued in March.
Local builders have confidence in the Jacksonville market.
“The builders I know count themselves very fortunate to be in this place at this time,” said the current NEFBA president and the president of The Vintage Group, Jerry Linder. “Demand for new homes remains the dominant force in this market, and as people continue to move to Jacksonville, they will continue to need a place to live.”
Linder said he believes builders in the area have the diversity in their products required to meet the demand for housing in all price ranges, from affordable, entry-level homes to the high-end luxury homes. He also said condominiums and townhomes are increasing in popularity for first-time buyers.
CLAY COUNTY
March 2006/145
February 2006/134
2006 Total YTD/394
2005 Total/3,526
2004 Total/2,687
DUVAL COUNTY
March/916
February 2006/674
2006 Total YTD/2,298
2005 Total/8,360
2004 Total/6,101
NASSAU COUNTY
March/88
February 2006/85
2006 Total YTD/251
2005 Total/1,306
2004 Total/1,238
ST. JOHNS COUNTY
March/262
February 2006/234
2006 Total YTD/837
2005 Total/4,561
2004 Total/3,610
Greater Jacksonville Area
(Clay, Duval, Nassau and St. Johns counties)
2006 March/1,411
2006 February/1,127
2006 Total YTD/3,780
2005 Total/17,753
2004 Total/13,636
2003 Total/11,976
2002 Total/10,618
2001 Total/9,075
2000 Total/7,487
The Northeast Florida Builders Association provides education, research, legislative representation, media relations, promotions and programs for its 1,900-plus builder and associate members. The Association is celebrating 62 years of service to members and to the community through various charitable efforts. For more information about member benefits, area builders or the association, call (904) 725-4355 or visit online at www.nefba.com.