by Mike Sharkey
Staff Writer
Sid Rosenberg has made a living analyzing real estate markets all over the state and country for the past 35 years.
Through relatively smart growth, a solid economy and minuscule unemployment, the Jacksonville area real estate market will rebound from anything resembling a bubble, according to the University of North Florida real estate professor .
“I am not a pessimist about Jacksonville at all,” Rosenberg told the Rotary Club of Jacksonville last month. “Compared to other markets in Florida, it is a lot healthier. However, we are fooling ourselves if we don’t think there’s been a slowdown.”
He’s lived through the recessions of the 1970s and ‘80s, and he’s watched as areas of Florida have created an atmosphere where supply exceeds demand and the local median home price isn’t in the same area code with the local median income. Rosenberg said past local real estate downturns can be directly attributed to a struggling economy, high interest rates and high unemployment — three economic factors the Jacksonville area has been fairly insulated from the past decade.
Rosenberg, who has degrees in both real estate and finance and has lectured and taught on the subject all over the world, said 2004 was the distinct point when the local real estate market began to see a slight downturn.
“A new home became unaffordable to the Jacksonville person who made a median income,” he said. “During that time, there was a sharp rise in prices.”
In June, the median home price in Jacksonville peaked at just over $213,000. Since then, it has fallen steadily and stood at about $197,000 as of October. According to Rosenberg, this trend is good for both buyers and developers because homes are becoming more affordable and developers are starting to move inventory.
The same is not true in other parts of Florida, particularly the Southwest part of the state where the median home price is nearly the double the median income.
“You can clearly look and say that the Jacksonville market is holding up better than any other,” said Rosenberg, who joined UNF in 1991. “We have finally seen a drop in median home prices.”
Rosenberg said the median home price needs to drop about another 15 percent. Between fluctuating mortgage rates and other costs of living, a drop of 15 percent — which would make the local median home price about $165,000 — would allow many people to purchase homes who cannot afford them now. He said one of the biggest problems with the real estate market right now is homeowners and developers wanting more than market value for both old and new homes.
“A lot of people are keeping asking prices too high,” he said. “This is normal. Some will drop their prices and we will see slowing depreciation. There are all kinds of exceptions, but housing prices right now are about 13 percent too high.
“Southeast and Southwest Florida are in a lot worse shape than we are, but even they are starting to turn around.”