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Buyers forced to sidelines as housing prices continue to climb
JACKSONVILLE, Fla, August 10, 2021 – Many would-be buyers are being priced out of the market as sales prices in Northeast Florida continue to climb.
In July, the median sales price on properties in the region rose 15% from a year ago to $303,600. The average sales price of $381,499 for residential real estate also was 18.4% higher than a year ago. And 45.6% of all properties sold for more than their asking price, an astronomical increase of 190.4% since July 2020 when the percentage was only 15.7. Meanwhile, REALTORS® cheered as new listings showed a 6.9% increase over the past year to 3,915 units.
“While the number of new listings increased compared to the same time last year, the continued demand for homes in Northeast Florida remained strong, bringing little relief to those still in the market to buy,” explained Missi Howell, president of the Northeast Florida Association of REALTORS®. “The increase in sales prices is far outpacing wages, and with almost 50% of homes being sold over the sellers’ asking prices, first-time homebuyers continue to struggle with their dream of homeownership and move-up buyers hesitate to list their homes due to concerns of what will be available for them to buy.”
There was an ever-so-slight increase since June bringing Northeast Florida’s housing inventory to 4,668 units, but this still represents a 40.6% drop from July 2020. The number of homes for sale continued to hover at a historic low of 1.4 months’ supply, and pending sales dropped 10.6% to 3,287 from a year ago and with most properties averaging 33 days on the market before sale.
“Pending sales of previously owned homes nudged out new construction by a nose, perhaps indicating that the rapid cost increases driven by material costs are losing favor with buyers,” Howell said.
During the past few months, Northeast Florida real estate has become increasingly less affordable. In July, Northeast Florida’s affordability index mirrored that of June at 118. This represents an 11.9% drop from July 2020, when the index stood at 134. An index of 118 means that the median household income was 118% of what is necessary to qualify for the median-priced home under prevailing interest rates. The higher the index the more affordable housing is in the region.
Howell recommends that both buyers and sellers utilize the expertise of a qualified REALTOR® when they attempt to negotiate today’s competitive housing market. “A tenacious buyer who works with a REALTOR® will strengthen their odds for success, while a patient seller who is looking to improve the bottom line at a sale will find the guidance and counsel of a REALTOR® invaluable,” she said.
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The Northeast Florida Association of Realtors (NEFAR,) serves as the voice of real estate in Northeast Florida. It is the region’s largest professional association, representing 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.