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August’s slight increase in housing inventory not enough to satisfy buyer demand
JACKSONVILLE, Fla. – High sales prices and an inadequate supply of available housing continued to characterize Northeast Florida’s booming housing market as summer came to an end. Although new listings increased slightly in August from a year ago, prices continued at historically high levels, causing many buyers to take a breather, and forcing them to rent for the forceable future. As the sellers’ market continues, demand for apartment and single-family home rental rates have begun to skyrocket, with the cost of leasing often superseding the cost of securing a home mortgage.
In August, new listings in Northeast Florida rose to 3,787, a 5.7% increase from a year ago. Meanwhile, pending sales fell 2% to 3,424, inventory levels fell 37.2% from August 2020 to 4,651 units, and the average number days on the market between when a home was listed and when an offer was accepted was down 50% from last year to 31 days.
In August, the month’s supply of inventory continued at 1.4, a 46.2% drop from a year ago. Prices continued to hover in the $300,000 – range with the median sales price at $300,000 and the average sales price at $362,699. Nearly all sellers at least attained their list price, with 41% of properties selling for over the asking amount.
Northeast Florida’s housing affordability index in August was 118, a mirror of what was registered in July, showing that homes on the First Coast are 13.2% less affordable than they were in August 2020 when the index registered 136. Higher numbers on the index indicate greater affordability.
“Buyer fatigue and summer vacations brought a slight increase in inventory in August, but it is still not enough to balance buyer demand,” said Missi Howell, president of the Northeast Florida Association of REALTORS®.
Many sellers have taken advantage of escalating sales prices, only to discover the frustrations of being a buyer after their houses have sold. Unable to find a suitable home to purchase, many have been forced into the rental market. Increased demand for housing as well as an improving economy has sent rental rates soaring. According to Apartment List, rents in Jacksonville have risen 19.7% since August 2020, and 4.4% since July 2021. The median rent for a one-bedroom apartment is $1,122 and for a two-bedroom apartment is $1,341. However, this is lower than the national median for monthly rent, which has so far increased 13.8% since January 2021.
“As challenging as it is for buyers to secure a home that fits their lifestyle and budget, renters who are seeking affordable accommodations are watching their options become less available and affordable,” said Howell. “The best way to protect inflationary housing increases is to own your own home. Homeownership is built-in “rent control,” which is one of the reasons buying a home is a person’s first step into wealth building,” she said.
In August, home builders continued to struggle to meet buyer demand, as housing starts nationwide dropped 7%, according to the Commerce Department. Single-family home construction declined 4.5%, and multi-family home construction, which includes condos and apartment buildings, was also down, falling by 13%. Builders continue to be challenged with labor shortages, rising material costs, and supply-chain setbacks. Many projects are temporarily paused due to construction material availability and the rising cost of materials.
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The Northeast Florida Association of Realtors (NEFAR,) serves as the voice of real estate in Northeast Florida. As the region’s largest professional association, it represents more than 10,000 members who work in all facets of the real estate industry including residential and commercial sales and property management. It serves the public through support of community affairs programs and seeks to protect private property rights. The Northeast Florida Multiple Listing Service is a wholly owned subsidiary of NEFAR. NEFAR is headquartered in Jacksonville, with satellite Service Centers in Orange Park, Jacksonville Beach, Palatka, and World Golf Village.