by David Chapman
Staff Writer
Even in a down market, Northeast Florida will be the best for real estate sales in Florida this year, even if the numbers aren’t what everyone is hoping for.
That message was presented by Lynn Reaser, chief economist and managing director for Investment Strategies Group at Bank of America at last month’s Commercial Real Estate for Women of Jacksonville luncheon. Reaser tracks and forecasts economic trends and evaluates their effects on financial markets and their implications on real estate.
She gave a five-part presentation titled “State of Economy & Real Estate” during the event held at the Southpoint Marriott, and gave some highlights and lowlights for Jacksonville’s market forecast. Some of her positive forecasts include:
• Jacksonville’s growth forecast in terms of real estate should outperform the rest of the state and the nation. This includes commercial real estate, which should remain strong throughout 2007.
• The job growth in Jacksonville is forecast to remain sizable, forecast to be above the average growth of both the rest of Florida and the United States.
• Home prices are decelerating.
• Jacksonville’s population growth forecast on average to be more than rest of Florida and the United States. This compared to as recently as 2005 when Florida’s average growth was more than both Jacksonville and the nation. In 2006, Jacksonville’s growth also was larger than both.
• Industrial vacancy rates throughout the area are down, as are Downtown residential and commercial vacancy rates.
It wasn’t completely rosy for North Florida, though, as Reaser also forecasted some not-so-cheerful points about the present and future market, including:
• Homebuilding is expected to bottom out in 2007. This is bad for the present but, on a better note, it should only go up. This is the result of unsold units and builders cutting back.
• Condominiums are the weakest link, leading to a stronger demand in apartments. One reason mentioned was price of land and building costs being high. This has led to an overhang of overpriced condominiums.
• Suburban vacancy rates will be slightly up from 2006, a reflection of less buying on the market.
The overall effect? According to Reaser, commercially speaking, Jacksonville still has a strong population and job growth that attracts new and expanding businesses. And while the housing market is forecast to bottom out in 2007, it should mean better days are ahead.
In the end, Reaser summarized that Jacksonville should outperform the state and nation in growth while the commercial real estate market remains strong for the area for remainder of 2007.