Monday, June 6, 2011

Jacksonville Market Report

Jacksonville, FL – Distress Drives Better Volume as
Buyers Continue to Look for Deals

(3,381 single-family permits in 2010, 26th largest market in the country)
Demand continues to improve on demand for distress opportunities. Buyer traffic
improved further in May, as our traffic index increased to 61 from 54 in April, coming in above agents’ expectations for this time of year (readings greater than 50). Agents continued to stress the crucial role of lower prices in contributing to the better traffic readings as of late. Agents noted that buyers remain drawn to distress properties that “present a good buying opportunity.” One agent mentioned, “I’ve been slammed. My buyers are a combination of investors, relocations and first-time buyers.” Agents also noted that the level of quality inventory has been low, leading buyers to actively seek out the best properties. Low interest rates seem to be sweetening the deal, as several agents noted that a combination of the lower prices with the low interest rates have helped traffic and sales.

Agents mentioned that foreclosures and short sales are the primary drivers of
the region’s demand. Home prices fall as distress drives volume. Prices fell in May despite the improvement in demand, as distress-driven sales volume has kept a lid on any price stabilization. Our home price index fell to 35 from 42 in April, pointing to sequentially lower home prices (readings below 50 point to falling home prices). Meanwhile, our home listings index pointed to a drop in inventory levels, as it came in at 58 (from 39 in April), with readings above 50 pointing to reduced inventory levels. However, we see this as a result of the prolonged foreclosure processes (as a result of the foreclosure moratoria of 2010), and expect distress to lead an increase in inventory levels in coming months. Our time to sell index came in at 42 (from 50 in April), pointing to a slight increase in the length of time needed to sell a home (readings below 50 point to a longer time to sell).

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

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