Brought to you by the Builder Realtor Relations Committee of the Sales and Marketing Council of the Northeast Florida Builders Association
Ray Rodriguez
Real Estate Strategy Center of North Florida
Q. How does 2012 look for real estate opportunities in the Northeast Florida market?
A. Three areas I’d keep my eye on:a. Condos. In 2011, investors bought 909 condo units involving more than one unit per recording. They have to market these units! b. Lots. Bankers bought over 650 vacant lots totaling over $5,000 in tax roll ownership. These groups serve as lot inventory holding companies for some builders and speaking of lots private individuals are buying foreclosed vacant lots in droves from banks. c. New construction. It’s on the horizon. Smaller sized builders can benefit from this trend versus the larger tract builders.
Q. Has 2011 shown sales for existing homes and new construction steadily growing over the year?
A. It appears sales were steadily increasing throughout the year and peaked in August. Sales slowed over the last four months of 2011.
Q. What home price points are generating the most sales?
A. It is widley expected that workforce housing dominates the real estate market in sales. Yet in 2011, as far as percentage increases, sales greater that 1 million dollars won the race coming in first with a gain of 38 percent. In that group, 177 homes closed in 2011 versus 128 in 2010. As expected, these sales occured in luxury communities. What is surprising in the sluggish economy is the fact that homes priced between $500,000 to $999,000 came in second with a gain of 23 percent.
In that price range 680 homes closed in 2011 versus 555 in 2010.Homes priced under $100,000 dominated the market in number of sales in 2011, rising slightly by 5 percent with 7,448 homes closed. The common workforce housing came in last dropping 7 percent to 7,207 homes closed in 2011. This drop is reflective of why the real estate market is sluggish. Consumer confidence and re-sale value are a must for the real estate market to revive itself.
Q. What is the current situation on foreclosures and short sales? Is there still a lot of activity on those sales or are they starting to thin out?
A. It is obvious foreclosure filings have dropped dramatically from over 20,000 in 2010 to just over 7,000 in 2011 throughout the MSA. Banks have faced strong challenges proving ownership of the mortgage, hence the lower number of filings. One issue I do see is the increase in “Deed in Lieu of Foreclosure”. Short sales are not as prevalent as before, with increased signs of an economic recovery. Banks will be less reluctant to grant a short sale, hence supporting their cash position.
Q. Prices have dropped over the last couple of years. Are we seeing a trend toward stabilized pricing?
A. With an abundance of loan defaults yet to be processed through the system, I don’t foresee home prices recovering any time soon. Resale values of non-foreclosed home sales need to return in droves for real estate values to stabilize and start to increase.
Q. New construction seems to have gotten increased activity in 2011. Do you see that trend continuing in 2012?
A. Nassau and St. Johns counties are both performing well. Monthly highs are parallel if not higher than 2010 filings.
Q. What are your projections for Northeast Florida real estate in 2012?
A. I like the Northeast and Northwest Corridors of the MSA. Now that the dredging of the St. Johns issue has been finalized, the future of container shipping can be seen in the far distant future. Approval of a new hospital adjacent to River City Marketplace and the 2016 return of a Navy aircraft carrier all bodes well for the Northeastern Corridor. Environmentally, developers don’t have the hurdles in the Northwest due to the lesser amount of wetlands. Villages of Westport, a 2,000-plus site development is well positioned to benefit from any housing recovery as the sole existing master planned community in the Northwest. Commercial construction west of Lem Turner on Dunn Avenue and Food Lion’s setup on Dunn Avenue near New Kings Road are signs of future growth.