Jacksonville Housing Market

Jacksonville Home Prices and Trends

The housing market metrics in Jacksonville, FL showed significant improvement again in March 2024 in comparison to the first two months of the year as the spring market starts to heat up.

But will this market improvement continue as sticky inflation threatens the Federal Reserve's intentions for three interest rate cuts by the end of the year? Read more on this below.

For March of 2024, months of inventory (absorption rate) continued to decrease from 5.5 months in January 2024 to 4.3 months in February 2024 to 3.2 months in March 2024. A normally balanced market is 6 months of inventory, meaning that if no other homes were to come on the market, it would take 6 months for the current inventory to sell. Therefore, the market is moving fast towards a stronger seller's market. We continue to expect months of inventory to further decrease in the next couple of months in the spring market.

The median sales price also showed improvement, going from $368,000 in February 2024 to $373,890 in March 2024. For context, the median sales price is up 8.7% year over year, another sign of overall market strength despite seasonal fluctuations. We also expect this metric of median sales price to rise in the coming months and potentially set a record (previous record was $380,000 in July of 2022).

Sellers are also seeing their percent received of list prices (97.6%) continue to increase in March 2024. At the same time, 12.7% of all properties sold over their list prices. This particular datapoint shows that buyers are still willing to pay top dollar for good properties that are priced appropriately.

Jacksonville Housing Market Forecast 2024

The forecast for Jacksonville's housing market is largely dependent on the broader economic picture and the Federal Reserve's ability to curb and maintain inflation.

Why does inflation matter for the housing market?

The Federal Reserve sets the Federal Funds Rate; this is the rate that commercial banks borrow and lend their reserves to each other overnight. The Federal Reserve adjusts this rate based on economic readings that show indications of inflation, recession, or other things that can affect sustainable economic growth. Although indirectly, the Federal Funds Rate influences short-term interest rates, including mortgage interest rates, as lenders frequently set their rates based on the prime lending rate - a rate that is also affected by the Federal Funds Rate.

Bottom line, until the Federal Reserve sees consistent economic data that inflation is fully under control, they will maintain an elevated Federal Funds Rate, thereby influencing elevated mortgage interest rates and likely keeping many homebuyers on the sidelines.

Inflation has fallen from 9.1% in June 2022 to 3.5% in March 2024. Good news, right?

Not so fast...

In fact, these latest data in March 2024 marked a third consecutive month-over-month increase. This has become known as "sticky inflation," and it's worrying markets that interest rates will stay higher for longer.

Prior to the release of inflation data in March (Consumer Price Index - CPI), the market was giving a greater than 50% chance that the Federal Reserve would start to trim rates possibly in June 2024. After the release of these data, the market was only giving a 28% chance.

Until additional economic data in the coming weeks gives more confidence to a rate cut plan (now starting potentially in September 2024), the uncertainty and fluctuations in important economic readings may increase short-term pressure on the housing market.

At the same time, if and when the Federal Reserve is able to trim rates, housing markets nationally, including Jacksonville, will benefit from the lower rates and likely resume promising growth in the back half of 2024 and into 2025.

Should I buy a house now or wait until 2025?

Buyers who decided to wait out the market for a housing market crash have (so far) not been rewarded for their decision as current prices (i.e., median sales price) are only slightly lower than their peak in July 2022. Meanwhile, interest rates have more than doubled, compounding the financial impact of such a decision.

Inventory of homes entering the spring market will likely continue to be a problem in the Jacksonville housing market as sellers who purchased or refinanced at a 2.5% to 4% interest rate will hold on to their homes longer since the cost for a new mortgage will be an interest rate that is more than doubled.

With the Southeast part of the United States continuing to see strong demand and with a shortage of homes due to sellers staying in their current homes longer at lower interest rates, it's possible that continuing to wait to buy a home could end up costing buyers more.

Moreover, if and when interest rates decrease further, buyer demand will only increase, leading to higher prices as more buyers enter a housing market with already low inventory.

Bottom line, if you find your dream home now, you may consider buying it. If rates fall once the Federal Reserve fully has inflation under control, you will likely have an opportunity to refinance later.

Jacksonville Housing Market Data

Northeast Florida Housing Market Trends

Data Source: Northeast Florida Association of Realtors.

ABOUT THE AUTHOR:

Rob Hastings is a top-producing real estate agent in Jacksonville, Florida and helps buyers, sellers, and investors of homes and property throughout all of Northeast Florida. He works with his wife Nancy as a husband-and wife-team with Keller Williams Realty Atlantic Partners. When not helping his clients navigate the real estate process, Rob enjoys working on old Corvettes and playing music (guitar and piano). A U.S. Naval Academy graduate and former Naval Officer, he also loves boating and simply spending time on the water.