By Carole Hawkins, [email protected]
Multiple offers on a home for sale.
It’s something Realtors are seeing for the first time since prior to the recession.
The time for home buyers to scoop up a deal disappeared in Northeast Florida in 2015 and sellers are now firmly in the driver’s seat. 2016 will see homes values continue their steady rise, and homeownership will be seen as an attractive investment once again.
“The biggest thing we’re budgeting for is continued appreciation of 3 to 5 percent — really, just a normal market. Which is wonderful,” said Christy Budnick, broker at Berkshire Hathaway HomeServices Florida Network Realty.
Punctuating the end of the Great Recession the Federal Reserve in December raised interest rates for the first time in nearly a decade. It’s a change expected to have little to no drag on the growing real estate market.
Budnick saw foreclosure sales drop by half in 2015 and buyers started to compete for listings. Those who low-balled missed out.
“It’s been interesting, they don’t necessarily understand that the pendulum has swung,” Budnick said.
Inventory for homes changed dramatically in 2015.
A year ago Northeast Florida had almost six months-worth of homes for sale, the inventory of a balanced market. Today, it’s four months — and, closer to three months for homes under $300,000.
The dearth of inventory at the low-end will pressure homebuilders to deliver more entry-level product in 2016, said Sandy Robertson, a Bank of America executive in charge of home loans for Florida and Tennessee.
Jacksonville builders had shifted in recent years to move-up homes, as Millennials delayed their first-time home purchases.
It’s been a hole in Jacksonville construction — which was typically a strong market for entry-level homes.
But rents have been rising. Now, high rents are making home ownership more attractive.
Also, developers are catching up on producing the vacant lots on which to build new homes. The lot boomerang included the launch in 2015 of new master-planned communities Shearwater, Markland and TrailMark in St. Johns County.
The forces will join to bring more consistency to new home building in 2016, Robertson said.
Rising rents should also boost Jacksonville’s condo market, said Mike Bugg, principal of The Condo Group.
He’s predicting rents at high-end apartments will top-out in 2016, and some apartments will convert to condos.
New condo construction since the recession has struggled for financing. The trend has been to finish off existing projects, like The Palazzo on St. Johns, La Fontana at World Golf Village and the Villas of Estancia.
New luxury construction hasn’t fared as well. Jacksonville’s two waterside high rise projects, Beacon Riverside and Aphora at Marina San Pablo, suspended their pre-construction sales in December.
Bugg doesn’t see that luxury product coming back soon. Instead, look for construction demand in the middle of the market, driven by empty-nesters in St. Johns and on the Northside.
Also, look for new condo development Downtown, driven by continued urbanization.
Urbanization stepped forward in 2015 with the opening of two apartment complexes in Brooklyn, 220 Riverside and Brooklyn Riverside, bringing nearly 600 new upscale units.
Now 2016 could bring Jacksonville’s first Downtown condo lofts, Bugg said.
“I have developers looking for product down there,” he said. “The urban core is going to pop, it’s real.”