Wednesday, July 15, 2009

Jacksonville, FL – Lack of Confidence Offsets
Attractive Affordability
(5,135 single-family permits in 2008, 18th largest market in the country)
Traffic declines, despite attractive affordability. Buyer traffic declined again in June,
coming in below agents’ expectations for this time of year as our traffic index fell to 30
from 39 in May (any reading below 50 suggests traffic below agents’ expectations). Agents
said demand for foreclosures continued as these properties present attractive
opportunities for buyers, but there appears to be little activity outside of the distressed
market. Agents also noted the tax credit for first-time buyers is helping affordability further,
but that the increase in mortgage rates in June seemed to offset the benefits from lower
prices and the tax credit.
Distressed sales continue to weigh on home prices. Home prices fell further in June as
foreclosures and short sales continued to make up the majority of sales, according to the
agents surveyed. Our home price index increased to 20 in June from 7 in May but remains
well below a neutral reading (any reading below 50 indicates lower home prices over the
past 30 days). Not helping the matter, inventory appeared to increase modestly in June, as
our home listings index fell to 40 from 50 in May (readings below 50 suggest an increase
in listings). Weaker demand and higher inventories resulted in a longer time needed to sell
a home – a negative indicator for future pricing trends – as our time to sell index slipped to
40 in June from 43 in May, below a neutral reading of 50. We expect further price declines
in the coming months.

John Holbrook - Realtor Amelia Island, 904-415-0171

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