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Pensacola Real Estate Market

Published on Monday - June 22, 2015

The Pensacola real estate market has undergone many changes since the mortgage collapse. Since the market bottomed out in June of 2008, there has been over a 100 percent increase in total sales. This recovery has seen its share of ups and downs, but as we near the halfway point of this year, it appears the market has finally turned the corner. Home prices are on the rise, equity growth has been made, and foreclosures are on the decline. All signs point to a strong second half for Pensacola real estate and surrounding areas.

Prices continue to grow at a slow pace for the Pensacola real estate market. The current median home price in the area is $149,900; as opposed to the national average of $203,867. In getting to that point, Pensacola real estate has appreciated at an impressive rate of 7.1 percent in the last 12 months. The national average, on the other hand, saw prices increases slightly less: 6.7 percent. Over a three year period, sales prices have risen in Pensacola by more than 17.3 percent, which is well below the national average. This number may appear to be a disappointment, but considering how bad the Florida market was after the collapse, things are starting to look really good in the Pensacola area.

Over the past three years, homeowners and those investing in Pensacola have seen an average equity appreciation of more than $18,000. Gains made during this period have helped pull the market out of recession and back on track. The following illustrates the total equity gained over the past nine years:

  • Homes purchased in the Pensacola housing market one year ago have appreciated by an average of $12,114, whereas the national average was $15,753 over the same period.
  • Homes purchased in the Pensacola housing market three years ago have appreciated by an average of $28,583, whereas the national average was $53,565 over the same period.
  • Homes purchased in the Pensacola housing market five years ago have appreciated by an average of $19,737, whereas the national average was $47,444 over the same period.
  • Homes purchased in the Pensacola housing market seven years ago have appreciated by an average of $8,791, whereas the national average was $17,200 over the same period.
  • Homes purchased in the Pensacola housing market nine years ago have appreciated by an average of $7,106, whereas the national average declined by an average $100 over the same period.

Gains are far from staggering, but Pensacola real estate investing has certainly appreciated the increase in equity. Moving forward, these gains can be viewed as a positive sign that things are headed in the right direction.

Supply and demand shape the outlook of any real estate market. Pensacola has indicators in place that it could be poised for to take off. The first indicator is with local unemployment numbers. Last month the market posted unemployment figures of 5.3 percent, compared to the national average of 5.5.5 percent. No more than a year ago, Pensacola’s unemployment    rate was at 6.4 percent. These numbers alone would be promising, but they have also led the way for job growth. The one year growth rate of 3.4 percent is greater than the national average of 2.1 percent. With unemployment numbers declining and more jobs being created, this has led the way to a growing economy. This boost to the economy has led to a slight demand for housing. This is represented by an average one month increase in new building permits. The number of new housing is down over the last twelve months, but it appears that the market has hit the bottom and is on the way up.

Housing affordability is also another indicator of the economy and housing market. One of the trends to look at when dissecting affordability is the monthly mortgage payment to income number. Pensacola homeowners spend an average of 8.1 percent of their income on monthly mortgage obligations. The national average is closer to 14 percent. This indicates that Pensacola homeowners have more reserves and higher disposable income. Those should reduce the number of future foreclosures and increase the growth of local economy. Pensacola is historically strong in regards to affordability, and price to income ratio. Growth may be moving slowly, but there are driving forces that show it can be sustainable.

Florida was one of the areas hit hardest by the foreclosure crisis. Since 2007, the state foreclosure average far exceeded national numbers. However, there are signs that things may have finally hit a bottom. According to RealtyTrac, the Pensacola housing market has about 1,317 homes in some state of foreclosure: default, auction or bank-owned. At that rate, the number of distressed properties in the city are 24 percent higher than last month and 4 percent lower than this time lat year. Distressed properties are fairly evenly split between default, auction and bank-owned. Each scenario should provide great opportunities for those interested in Pensacola real estate investing.

The real draw to distressed properties, however, lies in the discount they offer. The median sales price of a non-distressed home was $89,900. The median sales price of a foreclosure home was $43,100, or 52 percent lower than non-distressed home sales. That is a savings of more than $46,000. Again, the Pensacola real estate investing community should find the spreads to be very attractive.

Northeast and Northwest Pensacola are the most popular areas in the market, according to Trulia. As far as appreciation, South Pensacola showed a whopping 15 percent hike in average list price over the previous week. The average list price in Pensacola has undergone some steep swings in the last 30 days. This could be a reflection of the influence of foreclosures on the market. The number of total listings is another area of the market that has gone through dramatic swings in the last month. Around the middle of the year, this number is typically influenced by seasonal buyers and sellers, and not a true reflection of the market.

The Pensacola real estate market has rebounded nicely from the market collapse. Sales prices, equity and volume are all on the rise. Foreclosures are still a concern, but that seems to have stabilized, and is now headed in the right direction. With a healthy economy, reduced unemployment and sustained job growth, Pensacola real estate appears healthy once again.

Pensacola Real Estate Market Summary:

  • Current Median Home Price: $149,900
  • 1-Year Appreciation Rate: 7.1%
  • Unemployment Rate: 5.3%
  • 1-Year Job Growth Rate: 3.4%
  • Population: 52,703
  • Median Household Income: $47,336

Pensacola County Map:

Map of Pensacola neighborhoods

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