Jacksonville, FL – Traffic Falls as Buyers Lack Conviction
(5,135 single-family permits in 2008, 18th largest market in the country)
Traffic at uninspiring levels. Buyer traffic declined in May and remained at levels below agents’ expectations for this time of year, as our traffic index fell to 39 from 45 in April (any reading below 50 suggests traffic below agents’ expectations). Agents were generally unimpressed with the traffic, as comments suggested first-time buyers were still searching around, but the move-up market was slow and the spring selling season appears to be winding down. Still, one agent quipped, “Anything is better than last year.” Another agent commented, “I think there is still a real fear factor out there.” Others said that even when they had serious buyers, it is tough to convert them into sales and closings as appraisals are coming in low and killing deals. “Appraisals are a tremendous problem,” according to one agent. Nearly all agents note lower prices as distressed sales continue to make up a significant percentage of sales. Home prices continued to fall in May, with foreclosures
and short sales representing about half of sales, according to the agents surveyed.
Our home price index fell to 7 in May from 18 in April, with 86% of agents citing lower prices over the past 30 days (readings below 50 indicate sequentially lower home prices). Inventory levels appeared flat relative to last month, with our home listings index improving to 50 from 45 in April, in-line with a neutral 50. We think inventory will trend higher in the near term as the end of the foreclosure moratoriums lead to higher foreclosures in the months ahead. This will likely continue to pressure home prices.
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