EDITOR’S NOTE: Contributing Columnist, Steve Nicklas, expresses his views and insights on various topics in Marketplace column.
After several years of being on life support, the Florida real estate market is beginning to breathe normally again.
The breaths are short and sporadic, but somewhat steady. From here, the recovery may be long, tedious and trying — but necessary toward regaining the state’s past vitality.
Short sales and foreclosures have become pockmarks on the face of the market here, and elsewhere. These desperate, last-gasp actions continue to quash prices throughout the state.
However, they are an unfortunate evil in whittling away an enormous overhang of inventory. For 2010, the number of sales of existing single-family homes in Florida increased by five percent over last year; however, the average prices declined by four percent. (These figures are from the Realtors’ Multiple Listing Service and do not include private sales.)
In Nassau County, Florida the number of transactions increased from 460 (in 2009) to 499 in 2010. The combined sales increased from $116 million to $123 million this past year, even though the average home price declined by more than 30 percent.
For the Jacksonville, Florida area, which includes Nassau and neighboring Duval and St. Johns counties, a pattern reappeared of higher sales and lower prices. The number of sales came in at 13,300 — an 11 percent increase over last year. However, the average home price fell yet again — from $152,000 to $142,000.
“It’s a good time to buy, and people are buying,” says Florance Churchill of Century 21 in Fernandina Beach, pointing to the volume as evidence. The proof is there, in the numbers. Prices are down, mortgage rates remain low, and plenty of quality properties are on the market. It’s sort of like buying stocks after a correction in the markets. If you have the stomach and the liquidity, you can profit handsomely.
In addition, the economic and demographic trends are still favoring Florida. The Sunshine State will soon become the third most-populated state, and has been one of the fastest growing places in the U.S. for each of the last seven decades. Florida is expected to resume its long-term growth trend of adding 300,000 new residents a year.
According to a survey by the University of Florida, optimism is permeating the real estate market. The defeat of the Hometown Democracy Amendment and the election a pro-growth/anti-regulation governor has stirred a positive fervor, with the property market exhibiting early signs of recovery from the precipitous downturn.
“Results of our first quarter survey indicate that the real estate market in Florida has hit bottom and is in the process of stabilizing across most property types,” according to Timothy Becker, the director of Bergstrom Center for Real Estate Studies at the University of Florida.
Becker also says the four major cities in Florida — Miami, Orlando, Tampa and Jacksonville — have emerged as leaders in the recovery. These metropolitan areas “are less bad off than the rest of the state and they’re going to be quicker to recover than other places.”
The Jacksonville area is in a particularly good position. The housing market here never got as heated as other areas, and has not endured as many foreclosures. “I think Jacksonville is primed to really take off,” Becker says. “And, with the expansion of the port, it is going to have a lot of jobs coming into the marketplace.”
Steve NicklasSteve Nicklas is a financial advisor who lives on Amelia Island. He can be reached at 904-753-0236 or send eMail to [email protected].)
