2018 Market Review and 2019 Outlook

It has been another successful year for the real estate market in Northeast Florida!

With most areas seeing their highest home values ever and the local economy booming it is no surprise that activity has been high.

Mirroring the national trend 2018 saw a shortage of inventory across the region. With limited homes available on the market and historically low interest rates, buyers have been eager to snap up homes and compete for desirable homes in bidding wars. Year to date average sales prices are up 8.4% for the area at $266,523. Inventory levels are below the 6 months “normal” supply market conditions at a rate of 3.6 months supply. The shortage of homes on the market created a strong seller’s market. For sellers, it was a great year to sell with low times on the market at an average of 64 days and 14.2% of properties selling for over the list price.

Altogether 2018 was a booming time for home sales in Northeast Florida with all trends pointing in a positive direction. Though as we wrap up the year it’s important to note some headwinds that came about at the end of the year that we will face in 2019.

In the 2nd half of the year, the increase of mortgage interest rates to above 5% has pushed down the affordability of homes. That coupled with prices rising has left buying a home out of the reach of many would-be buyers. In the past 4 months, there has been a 14% increase in inventory across the region signaling a resurgence of seller interest but lacking buyer response to the new listings. Home supply continues to remain tight but for the time being but the trend is pointing towards an easing of the shortage of homes that have plagued the market over the past few years.

Looking forward I would predict the inventory levels to return to a more normal level around the 6 months supply range indicating a more even market between buyers and sellers. The economy continues to remain strong and as long as jobs are plentiful buyers will have the ability to afford homes. As wages increase across the region buyers will be able to afford more expensive homes pushing the price trend upward. Though, I would expect the price increases we saw in 2018 to come down to the more historic average of 4% yearly increases. With more home inventory competition comes an easing of prices. Already we have seen many more home sales with seller concessions as we near the end of the year.

We here at Allison James Estates and Homes Jacksonville look forward to another great year in 2019!