Thursday, May 6, 2010

Northeast Florida Housing Report

Jacksonville, FL – Traffic Beats Expectations for
First Time on Better Tax Credit Demand

(3,320 single-family permits in 2009, 23rd largest market in the country)
Traffic improves and exceeds expectations. Buyer traffic continued its momentum from
March into April, as our traffic index increased to 67 from 50 in March, exceeding
expectations (readings above 50 indicate traffic exceeded agents’ expectations). This
marks the regions’ first reading to come in above agents’ expectations. Agents credited the increase in traffic to the tax incentive, as buyers needed to sign a contract by April 30th (and close on a home by June 30th) in order to qualify. The increase in demand follows an improvement in our March survey, in which buyers’ urgency returned, and people started to express more interest in the credit. This urgency is also responsible for the volatility seen in the Jacksonville region since the November 30th tax credit expired. Buyers had no motivation to enter the market in early months, as they considered the extensive time frame to still sign by April 30th. However, buyers emerged again as the credit’s deadline approached. According to one agent, “People are running out of time on the government incentive. They realize the opportunity is here, and want to take advantage of it.”

Prices continue to decline, inventory trends improve. Prices remained under pressure
in April, as our home price index fell to 28 from 34 in March, falling further below a neutral reading of 50, with readings short of 50 indicating sequentially lower prices. Prices have yet to gain positive momentum throughout the downturn. Meanwhile, inventory trends improved for the second consecutive month, as our home listings index came in at 61 (up from 50 in March), with readings above 50 suggesting lower inventory levels over the past 30 days. We view this as a positive for the region, though we remain concerned over the potential level of foreclosure inventory held for sale by banks, not currently listed for sale.

John Holbrook - Realtor Amelia Island, Fernandina Beach & Yulee, FloridaCell: 904-415-0171 Email: Web: