Real Estate Market Update

February 16, 2021

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“Talent is God given. Be humble. Fame is man-given. Be grateful. Conceit is self-given. Be careful.” John Wooden

 

The Northeast Florida Association of Realtors market stats for January 2021 confirms what we are seeing in the market every day. The Inventory of Homes for Sale is 4,296 homes, down 51.6% from last January when there were 8,876. We have 1.4 months supply of inventory which is down 57.6% from 3.3 months last January. These numbers are staggering. The available inventory is lower than in the crazy period of 2004 and 2005.

 

It is the perfect storm if you are considering selling your home. When a new listing comes available buyers are offering list price with escalation clauses to pay more. Some buyers are removing appraisal and inspection contingencies to get their offer accepted. It is a very competitive market and you need expert advice to manage the process.

 

Buyer demand is strong as evidenced by 2,970 pending sales in January up 17.9% from last January. Closed sales of 2,210 is up 11.2%. With strong buyer demand and lower than normal inventory, prices continue to increase. The median sales price in January is $256,995 up 10.8% over last January. The average price is $319,811 up 16.0%.

 

National Association of Homebuilders (NAHB) Chief Economist, Dr. Robert Dietz and Florida Realtors Chief Economist, Dr. Brad O’Connor spoke at a recent Florida Realtors event and shared some interesting insights. Dr. Dietz said Florida had strong growth in new construction with 2020 building permits up “an incredible 30% year-over-year.”

 

The NAHB chief economist said he tracked data to look at the often-cited “shift to the suburbs” for housing in the latter part of 2020 due to COVID-19. He found that large metro areas with high density in the urban core still experienced a year-over-year growth rate of about 5.7% in 3Q 2020, but the lower-density, lower-cost suburbs out from the cities reported a growth rate of about 15%. Dietz also looked further out from Florida’s urban cores at communities known for second homes, investment homes or retirement. He said those areas reported a year-over-year growth rate of about 23.2% in 3Q 2020.

 

Dr. O’Connor explained that buyer wealth and available inventory matter more than density. “So, I would hypothesize that’s why you’re seeing a suburban shift in new home sales. And, why you’re seeing an overall greater surge in sales of upper-priced and luxury homes in Florida is that these kinds of homes are more freely available, and because many of the folks who are able to afford these kinds of properties also tend to be those who will be most able to work from home going forward.”

 

The northeast Florida housing market remains strong. It will be interesting to see what happens in the spring which is typically our strongest season. Enjoy the great spring weather and all the sports that are resuming. Thank you for your continued support and please let us know if we can help you with any real estate needs

 

 

Real Estate Market Update

January 21, 2021

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“Have enough courage to start and enough heart to finish.” – Jessica N. S. Yourko

 


This quote seems like a wonderful way to begin a new year that looks to be a wild ride. All predictions are for continued strong demand for homes in the northeast Florida area and nationwide.

 

I have huge respect for Dr. Lawrence Yun, NAR’s Chief Economist. At a recent event co-presented by RISMedia and the National Association of Realtors (NAR), Dr. Yun indicated that the momentum from the second half of 2020 will continue into 2021. His predictions for the new year are interest rates at historic low levels, increased job creation due to the stimulus package recently passing and vaccines being widely distributed, improved unemployment rate, and more housing inventory.

 

He also expects the following:

– Strong home sales momentum, with sales up roughly 8 to 12 percent in 2021 vs. 2020

– Home prices rising more moderately, about 4 percent nationwide

 

The demand for homes in our area remains strong, but the supply of homes continues to decrease. There were 4,549 homes available for sale in December 2020 down 46.9% from the 8,569 available in December 2019 according to the Northeast Florida Association of Realtors market stats.

 

There is 1.5 months supply of homes for sale in our area down 53.1% from last December’s 3.2 months of supply. A balanced market is 5 to 6 months of supply. If you are buying or selling a home, you need guidance from a professional. We are seeing crazy things happening in this market on both sides of the transaction.

 

– Pending sales of 2,685 were up 25.7% December over December and up 12.9% year over year.

– Closed sales of 3,187 were up 15.2% December over December and up 8.2% year over year.

– Median sales price of $267,000 is up 11.3% December over December and 9.0% year over year.

– Average sales price of $331,242 is up 14.6% December over December and 11.8% year over year.

 

New home construction has increased and will help with the supply of homes, but builders are facing challenges also. From a blog posted today on the National Association of Homebuilders site, “Rising material costs led by a huge upsurge in lumber prices, along with a resurgence of the coronavirus across much of the nation, pushed builder confidence in the market for newly-built single-family homes down three points to 83 in January, according to the latest NAHB/Wells Fargo Housing Market Index (HMI) released today. Despite the drop, builder sentiment remains at a strong level.” Any number over 50 indicates that more builders view conditions as good than poor.

 

Thank you for all the support of Davidson Realty and Davidson Property Management. If we can assist you with any of your real estate needs, please let us know.

How COVID-19 Impacted Real Estate in 2020

January 15, 2021

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The resilience of the real estate market was perhaps the biggest surprise in 2020. Despite the COVID-19 pandemic, the loss of millions of jobs, and a crippled economy, millions of American’s made waves in the real estate industry by browsing and, oftentimes, purchasing a new home. With thousands of businesses negatively affected by the COVID-19 pandemic, the real estate market saw positive trends and record-setting numbers.

 

The 2020 real estate market was expected to see steady growth. Lawrence Yun, National Association of Realtors (NAR) Chief Economist predicted there to be more than 750,000, for an 11% increase, in new home sales while existing homes sales would be repressed by low supply of homes to more than 5.56 million for a modest 4% increase. The median home price was anticipated to land at  $270,400 for an increase of 4.3%. Overall, the NAR was forecasting a healthy year for real estate. 

 

At the end of the first quarter of 2020, in the infancy of the pandemic, the real estate market was merely reacting to the sudden, bizarre changes that were happening in the world. With the new phrase called “social distancing” added to American vocabulary, all players in the real estate industry were in uncharted waters. With schools closing and businesses shut down, the needs of home seekers shifted.  

 

The COVID-19 pandemic made an interesting impact on the real estate market. While inventory was low and homes were selling quickly, the NAR reported a surge of people moving to more rural areas from larger, more crowded cities while desiring more moderate climates. “We are seeing many buyers coming from the Midwest, Northeast, and South Florida,” shares Sherry Davidson, President of Davidson Realty. This shift was caused by multiple COVID-19 related effects. Offices started allowing employees to work exclusively from home to successfully socially distance and people were enjoying the new routine COVID-19 brought and desired a slower pace of life. 

 

Throughout the changing times, Davidson Realty was able to adjust to new safety procedures and listen to the new needs of their clients. “Buyers were looking for homes that were more in tune to the daily needs of their families. Many were working from home and homeschooling their children, requiring more functional space for work and play,” shares Sherry Davidson. “Families were eager to purchase a home, but with inventory at record lows, we were seeing multiple offer situations and buyers were paying more than appraised values. Sellers were in a position to not consider offers with contingencies for financing and appraisals.” With interest rates at record-setting lows, buyers were eager to get their hands on their dream home. 

 

Although NAR has not yet released their year-end sales report, NAR reported in December they were expecting to reach 5.52 million in purchases in 2020, which is the highest annual mark since 2006. They also anticipate the median home price will hit a record-setting high at $293,000. Lawrence Yun has stated that the momentum from the second half of 2020 will carry into 2021.  Yun foresees interest rates remaining favorable and an increase in supply which will give home buyers more choices and repress home price growth. 

 

It’s safe to say the real estate market is still on fire. If you are interested in buying or selling your home, contact Davidson Realty today at (904) 940-5000. 

Real Estate Market Update

December 23, 2020

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“God has given us two hands – one to receive with and the other to give with. We are not cisterns made for hoarding; we are channels made for sharing.” Billy Graham

 

The Northeast Florida Association of Realtors market stats continue to show more buyer demand than seller supply. Pending sales were below normal in March, April, and May due to COVID-19; however, the year to date pending sales are up 11.6% over the same period last year. The 2,858 pending sales in November is 21.3% higher than last November.

 

The 2,680 closings in November are 13% higher than last November. We are up 6.7% year-to-date over the same period last year.

 

The homes available for sale is the lowest number on any reports I have seen. There are 5,211 homes available in Northeast Florida down 44.7% from 9,418 in November 2019 and 9,976 in November 2018.

 

There is 1.7 months supply of homes for sale which is down 51.4% from last year. A balanced market is 5 to 6 months of inventory.

 

The Northeast Florida builders are building more homes than in any year since 2005. There have been 11,343 permits issued in the Jacksonville MSA through November. That is 18% higher than 2019 in the same period. There were 10,345 permits in all 12 months of 2019.

 

The low supply and increased demand is causing prices to continue to rise. The median sales price of $262,000 is 12.9% higher than last November and we are up 8.8% year-to-date. The average sales price of $317,602 is 17.2% higher than last November and we are up 11.5% year-to-date.

 

Realtor.com has issued the first predictions for 2021. They are predicting a 7% growth in sales nationally and a 5.7% price increase. The 2021 prediction for the Jacksonville area is 9.4% growth in sales and 5.0% increase in prices.

 

Realtor.com is predicting more homes will hit the market in 2021, but buyers will struggle with affordability as home prices continue to rise. Mortgage rates will slowly rise toward 3.4%.

 

· Millennials will continue to drive the market. Older millennials will likely be trade-up buyers while the younger segment of the generation age into their key home-buying years.

· Affordability will become a growing obstacle.

· Inventory will begin the slow road toward recovery.

· Suburbs will shine if remote work stays around.

 

I wish you a wonderful holiday season and an amazing 2021. This year was full of ups and downs with COVID and the election. I wish you a wonderful and safe New Year!

Real Estate Market Update

November 30, 2020

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“It is not joy that makes us grateful; it is gratitude that makes us joyful.” David Steindl-Rast

 

I am very grateful to everyone that supported the 2020 Davidson Cares Clay Day! Thanks to your generosity we raised over $40,000 to be split evenly between Builders Care, St. Augustine Youth Services and Investing in Kids.

 

The Northeast Florida Multiple Listing Service shows continued buyer demand and low supply. There were 3,192 closed sales in October which is 24.5% more than the 2,564 last October. The spring buying season got delayed, but we are up 5.6% for year-to-date closings over last year.

 

Pending sales of 3,153 are 18.4% more than the 2,663 pending sales last October. We are up 10.2% year-to-date.

 

There are 6,109 active listings which is down 34.5% from the 9,332 last October.

 

The National Association of Realtors (NAR) 2020 Buyer/Seller Survey has some interesting findings. “The coronavirus, without a doubt, led homebuyers to reassess their housing situations and even reconsider home sizes and destinations,” says Jessica Lautz, vice president of demographics and behavioral insights for NAR. “Buyers sought housing with more rooms, more square footage and more yard space, and they may have desired a home office or home gym. They also shopped for larger homes because extra space would allow households to better accommodate older adult relatives or young adults that are now living within the residence.”

 

The 7 Buyer pandemic-related trends:

  1. Multigenerational homes grow in popularity
  2. Homes are pricier
  3. Shorter house tenures expected
  4. More renters become owners
  5. Buyers love suburbia
  6. Searches speed up
  7. Certain buying segments grow

The 7 Seller pandemic-related trends:

  1. Looking to upsize
  2. Feeling urgency
  3. Technology’s importance grows
  4. Incentives haven’t disappeared
  5. Equity gains
  6. Long-timers appear more motivated to move
  7. Desire to live close to family remains strong

It will be interesting to see future housing trends. For now, we are seeing multiple offers on listings and many potential sellers are on the sidelines.

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