JACKSONVILLE, Fla. – The housing boom that fueled a major increase in home prices during the coronavirus pandemic may finally be cooling off.
Economists say several signs are indicating that the market may be correcting itself, while the price to rent a home or apartment continues to climb.
Financial experts are watching the housing market very closely as the winter months approach after the cost of buying a home or renting skyrocketed nationwide. While experts do not expect the housing market to crash like it did in 2008, economists say there are indicators that the market may be returning to normal.
″We are near the peak. I don’t expect there to be a crash,” said real estate economist Ken Johnson.
Johnson says Jacksonville-area home prices are about 23% higher than what they would be in typical conditions.
“To see that price growth is slowing is a good thing because you don’t want to get too far away, but are we there yet? It’s hard to say we are. I think we are close, but it’s difficult to call to the month or to the week,” Johnson said.
Johnson says he expects to see a definite slowdown in the price of a North Florida home over the next six to 18 months, based on key indicators like interest rates, the inventory of houses and the expected influx in population growth.
According to Realtor.com, last month, the median listing price for a home in Duval County was nearly $270,000, and homes are selling for approximately the listing price.
Real estate agents tell News4Jax that in today’s market, some homes are still getting multiple offers and buyers are getting into bidding wars but mostly in popular areas and on renovated properties.
While there may be indications the housing market is slowly cooling off, Johnson says that the rental market may remain higher priced for some time.
“The number of units that are being built for rental purposes is just not enough, so you’ve got the shortage of inventory and you’ve got the huge influx of expected population growth, so rents are going to go up,” Johnson said.
According to data from rental listing website Zumper.com, the average rent for a two-bedroom apartment in Jacksonville is $1,350, a 17% increase compared to the previous year, and the average rent for a three-bedroom apartment is currently $1,799, a 24% increase compared to last year.
Johnson says the growing popularity of the River City is only going to attract more renters and buyers to the region.
“Jacksonville offers tremendous professional opportunities. The city is growing, the professional opportunities are growing very fast, very rapidly, and you can think of other parts of the country where those opportunities aren’t provided,” Johnson said.
If you’re contemplating whether to rent or to buy in today’s housing market, Johnson says that renting will make you more money over time if you take the money you would have invested into the home — like your down payment, taxes and insurance — and instead invest that into a portfolio of stocks and bonds.