To provide another useful supplement, in addition to the Atlanta MSA post, regarding our recent "Monthly Market Trends" February Blog, we are taking a closer look at one of our other major key markets on our platform, and one we have an exclusive partnership in, Jacksonville, to provide you with even more comprehensive insight.
Currently, Groundfloor has 253 active loans in the Jacksonville Metro Statistical Area (MSA) totaling $50,358,840 across both partner channel and core Groundfloor originations.
Before we delve into the housing details, let’s examine some key points about the market:
Jacksonville is the largest city in the state of Florida by land area and has a diverse economy with a range of industries, including healthcare, finance, logistics, and tourism.
- Healthcare: Jacksonville is home to several major healthcare providers, including Baptist Health, UF Health, and Mayo Clinic, which employ a significant portion of the city's workforce.
- Finance: Jacksonville is a hub for banking and financial services, with major companies such as Bank of America, Wells Fargo, and JP Morgan Chase having significant operations in the city.
- Logistics: The city is a major transportation hub with a port that serves as a gateway to the Caribbean and Latin America. Companies such as Crowley Maritime, CSX Transportation, and FedEx have significant operations in the area.
- Tourism: Jacksonville has a thriving tourism industry, with attractions such as the Jacksonville Beaches, the St. Johns River, and the Jacksonville Zoo and Gardens drawing visitors from across the country and the world.
- Manufacturing: Jacksonville has a growing manufacturing sector, with companies such as GE Aviation, Saft America, and Carlisle Interconnect Technologies having operations in the area.
Overall, Jacksonville's economy is diverse and continues to grow and evolve, with a range of industries and sectors contributing to its current and growing success.
Given this broad economic base it is no surprise that the JAX Market has very low unemployment.
If we pull back and look over a 5-year history, with the exception of the acute period of COVID onset, we see a consistently low unemployment rate.
Gainful employment is essential to strong housing economics, and without it, wide swaths of unemployment can have a negative effect on the market. Jacksonville's economic growth and stability have been supporting robust housing fundamentals and providing Groundfloor Investors with solid investment opportunities. As we work to diversify our loan portfolios, it is important to remember the link between employment levels and housing economics.
The key is to look for areas with a healthy job market – those with above-average wages and plentiful employment options. This will help ensure that local economies remain stable, allowing investors to feel more confident in their investments. Additionally, make sure you’re keeping track of relevant data such as the unemployment rate, labor force participation rate, average wages, and trends in population shifts in order to make informed decisions before investing in an area’s housing economy.
Let’s take a closer look at how Jacksonville’s housing market is fairing today.
The advantage remains on the seller side and the seller advantage has increased over the past month. As you can see below, the Market Action Index bottomed around December of 2022 and then increased as much as 10 points. (Source: Altos Research)
Are sellers with listed properties holding their prices firm or are they decreasing them? Well, let’s look.
The percentage of listings with price decreases was 53% in November 2022 - which means more than half of sellers decreased their price. Since then, the percentage of sellers decreasing their prices has steadily declined to 38%. This is a clear positive trend and, again, a ballast against overall housing price collapse in this MSA.
Inventory declined in January but slightly increased in February - which is what we would expect heading into the Spring market. While it’s good that the market is not being flooded with distressed properties as was experienced in the great recession, we can clearly see supply is constrained.
On a year-over-year and on a three-year basis how has Inventory changed?
We can see that inventory has increased over the past year, but it is coming off of an historically low number. In November 2022, inventory peaked before decreasing noticeably and flattening out around the 4.5k level.
Looking back over the last three years, inventory has regained pre-pandemic levels despite climbing from an historically low base. It is remarkable how it was constrained to within a 1.5k to 2.4k range until May-June 2022, when the Fed's interest rate tightening started to heat up.
Houses listed in the JAX market on average are selling in about 90 days. While this is higher than the historically low days on market we saw in 2021, relative to the past this represents a more normal marketing time, and it is to me reassuring that this number has remained relatively flat since the beginning of 2023.
DOM 90-Day Lookback
DOM 3-Year Lookback
Since the start of the Covid pandemic, days on the market (DOM) in the area have been fluctuating. It initially hovered around 120 days, then plunged to nearly 90 days before reversing again in summer 2022. For real estate geeks, this is like a live action movie taking place before them. Despite all these shifts, it appears that DOM is reverting back to its mean and normalizing, making this number an important one to keep an eye on. There may be a slight decline over the next quarter, so it's worth monitoring closely.
Median List Price
After retracting decreases and normalizing the typical number of days it takes to sell a home, what does this mean for housing prices? On a year-over-year basis, the median new listings price has essentially stayed the same after spiking at the start of last year.
Last year at this time, the median new listing price was $369,000. This number rose to a peak of $420,000 in July before moving back and stabilizing to slightly above its initial level, now standing at $385,000.
As spring approaches, Jacksonville's market inventory stays constrained, prices remain steady, and listings usually sell within a reasonable amount of days. The long-term outlook for the economy in this area is looking very positive.