Jacksonville Real Estate Market Update | August 2022Sep 17, 2022
August marks a potential turning point in our local market. We saw inventory peak (at least in the short-term) and pending sales rose 7% compared to last month. We're still down about 20-30% in the various metrics compared to the highs last year, but this is an encouraging sign in a market dominated by headlines about it being the worst time to buy.
Major takeaways from last month include:
- Prices are peaking in the short term as we are bouncing around the $430,000 average price/$360,000 median price mark. This appears to be the market indicating that at current rates and incomes, higher prices aren't supported. Also, I think this is evidence of some desperation by sellers/listing agents as we were all used to the red hot market of the past two years and are a little more aggressive to sell a house quickly if it sits for a few weeks. We'll see if the desperation is warranted as we go forward.
- Rates moved higher from the short-term lows at the end of July and were back to the highs on mortgage rates. The FED is indicating they'll raise the federal funds rate another 0.75% to continue to slow inflation and we may be nearing the end of the rate increases should the economy further slow and inflation cool. This will be welcome news as mortgage rates will in turn decrease giving much desired affordability to the market.
- Pending sales rebounded and are up compared to July. This is probably a surprise to many as the headlines continue to promote doom and gloom, but there is a base level of business that will continue to happen given our diverse economy in Jacksonville and the addition of the Hometown Heroes program which is providing significant down payment/closing cost assistance (up to $25,000). Other states don't have this type of assistance which should help us continue to grow locally.
- Closed sales were flat from last month and while cancellations due to bad inspections are still common, it is good to see this hold steady and closings are roughly equal to pending sales which tells us contracts are holding together and making it to the finish line.
We must keep our feet moving and educating our clients to help them understand that waiting is not necessarily the best option with sticky inflation that may continue to drive rates higher should it not go away.