Jacksonville Monthly Market Update | February 2023Mar 19, 2023
We've sprung forward and the markets also change as we take a look at stats for February in Northeast Florida. Overall, this market appears to have gotten a quick start to the year as many buyers went under contract in January and we see the results in the closing numbers in February. Now, we have a banking crisis that is starting, an unofficial Fed Pivot to easing monetary policy, and many other factors to consider as we go forward. Before we get too far, remember that this too shall pass.
Here's some of the major points from the market update:
February typically marks the final quiet month before the Spring market boost in March. It is also a month where you see how many New Year's resolutions turned into home purchases. With a 27% increase in sales vs. January, it's clear many took action and bought.
Rates do give pause to the celebration. We went back to 6.5% on a 30YR fixed loan prior to the collapse of SVB. Since then, rates have come back down closer to 6.25%, but continuing inflation concerns have the markets wondering if rates will continue to rise over time.
Homes on the market fell another 6% (counter to the normal seasonal pattern of rising Spring inventory) down to 3.4 months of supply. Sellers continue to hold onto their houses with 3% mortgages while builders continue their leisurely pace, and prices aren't likely to drop significantly without significantly more inventory coming to the market.
Days on market jumped 21% higher as the average house that sold took 75 days to go under contract. While this is not listed in the stats on the dashboard, the average price of a new listing was up $30k compared to January, which may be part of why this timeframe is getting longer. This also could be due to houses listed before Thanksgiving finally selling after having to sit through the holidays.
- We expect that mortgage rates will be the beneficiary of this banking crisis in the short-term as investors flee to the "safety" of bonds which pushes rates lower. The major issue with this plan is that inflation is still clocking in at 6% and with new rounds of stimulus, could move higher going forward. We'll likely see a lag to the increases so in the meantime, make hay while the sun is shining and secure hard assets (like real estate, gold, art, jewelry, etc.) to protect your wealth.
Next month, we'll see if this was the tip of the iceberg or an isolated event that was handled quickly (we wager it's the first option). Consumer confidence will likely drop which could lead to fewer home sales (although housing is a necessity and renting isn't cheap, so it may not be as negatively impacted in areas outside these bank failures like the Southeast currently).
Also, check out this episode from What's Your 1 More to get more information on the cause and fallout of the bank failures:
Have a great Spring break and we'll be back for more with March market stats!