Real Estate Bust coming to Jax?

[jaxlvr_24]

There are signs the real estate bubble is starting to pop in several hot markets in the USA. Will this happen in Jacksonville's hot market too?

[asonj23]

I don't think we are in emminent danger. Things will probably level out a bit in the near future but not fall.

[JaxNole]

I don't think we are in emminent danger. Things will probably level out a bit in the near future but not fall.

I agree. I think points south of us may experience bubble-like conditions as permits have decreased and inventory isn't moving as quickly as it has in recent months. Jacksonville, however, continues to trend positively in other aspects which I think reflects the more metered approach the city takes to many issues.

[Urban_Legend]

I don't think Jacksonville has to worry about any massive bust. I've mostly read bust speculations about Miami/South Florida... I think Florida's great climate is a huge selling point and lures many people down here....

[Dale]

There is no such thing as a 'real estate bubble'. Yes, growth will moderate. But I'd guess that JAX is only beginning to address its vertical highrise housing demand.

By the way, I didn't vote as I do not believe any of the three options were satisfactory.

[wolfdawg54]

I am sure growth will fluctuate but that is bound to happen in any market, over a certain peroid of time.

[simms3]

jacksonville has literally just been discovered by the masses, unlike our other FL counterparts, especially south FL where there is no more land, and many circumstances that could spell disaster for a real estate market, but jacksonville will keep on chugging along because we have so many nice characteristics for living, and people are just learning this. the only bubble that could possibly occur with very low chances of popping are in high demand areas along the river and in the beaches, where there is no more land and quickly rising prices, but the demand continues to be there for any nice area.

[MrJoshua]

Bubbles do exist... but not to the extent that your annoying relative lost is arse by trading pets.com stock back in 2000 or buying beanie babies. Jacksonville probably has another year of +/- 8% growth, then will taper off to the 3-4% range. The important thing is real estate values will probably not DECREASE. Yes, this happens. Go to South Florida and look at the rental market. Go to California. The first place to take the dump is usually the beaches, which is just a symptom of how exxagerated their prices became in the first place.

[Australian1]

NO! we don't want a real estate bust in Jax!

[simms3]

Australia, I noticed you are from Australia, very hard for me to find that out , jk, but what are your ties to Jacksonville, I like it when foreigners are interested in the states (I think too many Americans obsess with trying to become Europe or Canada and complaining about conditions here...why don't they just move then), but I think everyone on this forum is interested when foreigners and out of towners also are interested or have ties to the region/city. I think it would be great if we were a little more diverse!

[capt.actionjackson]

I didn't vote because none of the above wasn't there. But, I've been in the business long enough to see the bubbles forming and agree that S Florida may be hitting a snag shortly. I don't think that the bubble will "pop" in any region really but S Florida will probably plateau and the rest of the nation will probably show plateau or light growth. Areas like CA where the median income is 70K and the homes are appreciating for ridiculous values, and everyone has a pick-a-pay loan, are the areas in real danger of a problem. NE Florida still has plenty of room for appreciation at this point, IMO.

When I talk to my friends/clients who live in the N they are amazed at how little we pay for our homes down here. One of my friends just bought a 1100 sq ft 2/1 and paid well over 200K for it.

[simms3]

Well, even condos in our downtown are more expensive than that. I would say that sounds reasonable and even cheap for many areas in NE FL. We are on the same housing price level or more expensive than Orlando and maybe even Tampa. We are definitely more expensive than even Atlanta. Near where my uncle lives you can get 4000 sq. ft. actually ok looking mcmansions for only half a mil. When I saw these houses and prices I thought, wow, back in Jax, these would go for at least a million.

[bluewingzz]

Well, even condos in our downtown are more expensive than that. I would say that sounds reasonable and even cheap for many areas in NE FL. We are on the same housing price level or more expensive than Orlando and maybe even Tampa. We are definitely more expensive than even Atlanta. Near where my uncle lives you can get 4000 sq. ft. actually ok looking mcmansions for only half a mil. When I saw these houses and prices I thought, wow, back in Jax, these would go for at least a million.

Jacksonville housing price is way cheaper than orlando.

[AuLukey]

Australia, I noticed you are from Australia, very hard for me to find that out , jk, but what are your ties to Jacksonville, I like it when foreigners are interested in the states (I think too many Americans obsess with trying to become Europe or Canada and complaining about conditions here...why don't they just move then), but I think everyone on this forum is interested when foreigners and out of towners also are interested or have ties to the region/city. I think it would be great if we were a little more diverse!

he's not the only one. I now live in Charlotte but I've been eyeing Jax for some time as I lived in Middleburg part of my childhood. I visited the city on a road trip last march and was amazed at the high rises coming up on the river. It gave me new hope of living uptown in Jax when I thought it previously didn't seem like a good (or safe) idea. Glad I was wrong.

I see Jacksonville as more immune to a "bust" as it has more economic strength that isn't completely reliant on the strength of the stock market. Healthcare and shipping seem like fairly steady markets and should remain so for decades to come as long as the flying barge is never invented.

[jandar]

Jacksonville is also very diverse in places to live.

Beaches, river, countryside to name the most obvious.

Even homes here can vary greatly just by location. A 2000sqft house off of Kernan would go for 1/3 to 1/2 as much on the westside or parts of the northside.

[labanjohnson]

I think you have to look at a number of economic indicators to determine if there is an actual slow down.

Yes, there may be a slowdown in sales and new constructions due to fewer qualified buyers on the market, a result of creeping interest rates which as many know have been artificially held down for years by the Fed.

You also have higher consumer debt-to-income ratios because so many homeowners refinanced while rates were low and then wasted the fast-earned equity from their homes on expensive depreciables (such as SUVs, boats, ) etc. instead of reinvesting. Kudos to you who did use that equity wisely!

Now things are getting a little more 'realistic', creating shock for those who were more comfortable living in the bubble. Well a bubble is just that, something unreal that happens for a limited time. Anyone who makes a long term investment strategy around a short term trend is... lets just be nice and say ignorant.

However, the growth factor for North Florida is still astouding. Perhaps someone else can provide comparative census data, but all you really need to do is count the out of state license plates you see on Jacksonville streets (not I-95) to realize that many are still being drawn to Jacksonville for many reasons. Half of the people I meet here are not from here. I myself am from northern VA, have been here about a year and a half, and love where this city is going enough to want to invest here locally.

Although appreciation rates may dip to more accurately reflect local growth and demands, I don't see them flat-lining or going in the red at all, we'll see more modest gains, and some people may have to learn new financial equations to turn larger profits! But its alllllll good I think MrJoshua is right on the money, appreciate rates will taper down to about 3-4%. At least, thats the number I'll be using. If we're wrong and it stays higher, then thats just a plus for me for being conservative (well at least on factors which are out of my control!)

If you own and don't need to sell, hold that property! (But if you really need to sell, contact me!)

Question is are the newcomers renting or buying?

I believe the rental market will boom, however, since fewer consumers will buy and more will rent, not they planned to fail, but have failed to plan, financially. We are the market. We are causing the booms and bust. Why are we as American consumers in general so uneducated when it comes to finances?

[Spartan]

Sometimes it is related to supply and demand. If there is too much supply for the current demand, it will appear as though there is a bust, but then demand will ultimately catch up. Its a natural part of the real estate cycle, and with the exception of metro Atlanta, most places are not immune to it.

Welcome to the forum!!