Local real estate professionals, who make a living in one of the economy’s hardest-hit industries, have long asked whether the market has bottomed out.
According to one industry analyst, it has.
“No doubt, yes,” said Anthony Crocco, Metrostudy director of Central/North Florida.
“Last winter was the bottom,” he said, explaining that it was “quarter four 2010 and first quarter 2011.”
Crocco presented a Northeast Florida real estate analysis Wednesday to Urban Land Institute North Florida members.
Metrostudy provides primary and secondary housing market information, research and consulting.
Crocco said the group travels to areas for inventory counts of “every land piece planned for housing” every 90 days.
As with other industries, the housing market is affected by economic factors, and Jacksonville is trending in a positive direction for many of those, Crocco said.
While unemployment remains high, Jacksonville is adding more jobs than the national and state average, Crocco explained.
“It’s trending up nicely the last few months,” he said.
That trend, combined with a decline in housing inventory, is a plus for the industry, he said.
Crocco said economic growth will be slower than normal this year because it is an election year. “People and businesses are going to hold tight” to capital until the election results are clear, he said.
Regardless of the outcome, Crocco said growth should pick up faster at the start of 2013.
Mortgage rates are favorable, but financing is a concern, he said.
He said mortgage applications are up, and three-fourths of those are for refinancing.
Crocco said the applications indicate more consumer confidence, but confidence levels need to improve more.
“The consumer hasn’t really come out of their funk,” he said.
Crocco said that many in the real estate industry often ask what “normal” sales levels are and when they will return.
Crocco told ULI members that today’s levels are comparable to periods in 2010 when the government offered tax incentives for first-time homebuyers, sparking sales.
Similar activity levels have returned without incentives, which he said indicates growth.
Typically, Crocco said a six- to seven-month supply of homes is desirable and current levels are around eight months.
“I think we should be a lot more positive than we were a year ago,” he said.
Crocco doesn’t see a “double-dip” recession, but he thinks there could be additional stress that might be alleviated with efforts to cut debt and create jobs.
He said his biggest fear is that the European debt crisis could negatively impact finance markets at home and abroad and further diminish consumer confidence.
“It’s something we have got to keep an eye on,” he said.
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