There's some great news concerning Jacksonville's real estate market.
And then, there is some "other news."
Let's talk about the great news first.
According to the latest RealtyTrac 2013 U.S. Residential Sales Report, Jacksonville ranks at the top in growth in total home sales among the 50 largest markets
Sales counts jumped a whopping 43 percent in June when compared year-over-year from June 2012.
Those numbers are impressive — 42,413 in 2013 compared to 29,567 in 2012.
With an increase in local home sales each month for the past year, this latest revelation from RealtyTrac certainly appears to be strong evidence we're heading to a sweet spot in Jacksonville's real estate market.
There's reason for optimism and Jacksonville Realtors have to be smiling more these days when talking with sellers.
Because of a more limited inventory to sell, reports are that offers are coming quick and often in multiples.
So, what is expected as we move forward?
RealtyTrac says that nationally the market is trending toward a more normalized and sustainable pattern after last year's rush to residential real estate by institutional and cash buyers.
Daren Blomquist, RealtyTrac vice president, said, "Rising home values should continue to unlock more non-distressed inventory while also pricing institutional investors out of more markets, which, combined with rising interest rates will cool off the pace of price appreciation."
While all cash purchases were down a point this June compared to June 2012, RealtyTrac says several metropolitan statistical areas in Florida continue to remain high in cash purchases, including Cape Coral-Fort Myers, 70 percent; Miami, 64 percent; Sarasota, 59 percent; and Tampa, 58 percent.
In Jacksonville, cash purchases was down 4 percentage points, good for 42 percent.
Of all Florida sales in June, 12 percent were by institutional investors. For Jacksonville, that figure was 16 percent, down from 17 percent a year.
Now, for the "other news."
When it comes to home flipping, Jacksonville remains fertile by ranking eighth in the top 15 markets.
Nationally, buying and flipping houses within six months continues as a profitable growth industry.
RealtyTrac says home flips were up 19 percent in the first half of 2013 compared to last year and up 74 percent from the first half of 2011.
Furthermore, 1,823 houses in Jacksonville were flipped in the first half of this year, an increase of 260 percent year over year.
The average purchase price of each Jacksonville flip was $133,968, producing an average profit of $21,326.
RealtyTrac's Blomquist says that despite these strong numbers, home flipping seems to be tapering off in a number of major markets.
Interestingly, investors who purchased homes in the Oklahoma City and Tulsa markets are holding them off the market.
Because of the devastating tornadoes that destroyed so much of the housing stock in the area, these investors are finding rents are skyrocketing and profitable.
Rather than put the houses back on the market, investors are holding on while the properties appreciate.
• • • • • • • • • •
Here's something to ponder.
At its first meeting of the new fiscal year, the Jacksonville City Council ensured for the first time in several years that we could face a property tax increase.
The amount of the increase won't be determined for a couple of months when Council finally has the 2013-14 budget put to bed, but it could be as much as 15 percent.
More than likely it will fall somewhere just above the 10 percent range.
In the past, Jacksonville has been notorious about not raising the property tax rate, deciding year after year to cut services and programs instead of increasing revenue.
Mayor Alvin Brown has remained adamant he does not support a tax hike.
But this Council's debate on where to set the preliminary rate did not focus on standing still or falling back.
Instead, the question discussed was how much more in taxes do we need to fill a $65 million budget deficit and at least maintain the current level of City services.
It's obvious by the debate and the 15-3 vote that Council members think Jacksonville residents are tired of closed libraries, poorly maintained parks, boarded up fire stations and unfilled potholes.
If you're one of those people opposed to any kind of tax increase and you're counting on Brown to veto whatever the Council passes, don't hold your breath.
The mayor is prohibited by law from vetoing a millage increase or a budget that includes one.
He can, however, line-item veto the budget, something Brown is not likely to do.
Council President Bill Gulliford can sign the millage legislation Council passed and the mayor is then required to deliver it to the Property Appraiser's Office.
So, here is my question to you.
What will hamper home sales more: a modest property tax increase or a lack of City services?
I'd really like to know what you think.
— Jim Bailey is publisher of Realty/Builder Connection and president of Bailey Publishing & Communications Inc. He can be reached at [email protected].