Jacksonville, FL Real Estate Market Trends & Analysis [Updated 2020]

Jump To Another Year In The Jacksonville Real Estate Market:

The Jacksonville real estate market in Florida looks poised to benefit from the momentum it generated at the beginning of 2020. That’s not to say real estate in Jacksonville hasn’t experienced a setback in the wake of COVID-19, but rather that it appears to have fared slightly better than many of its national counterparts. The local housing market has been able to maintain healthy home values and keep demand intact, all while preserving future prospects. Perhaps even more importantly, the economy seems to have fared better than most other cities after the introduction of the Coronavirus. Local unemployment levels didn’t spike as high as national averages, which bodes well for a quicker return to normalcy. While the pandemic has served as an obstacle for the better part of 2020, the largest city in Florida looks positioned to return pre-pandemic levels sooner than later, which bodes well for everyone participating in the market: buyers, sellers and investors.

Jacksonville Real Estate Market 2020 Overview

  • Median Home Value: $195,692

  • 1-Year Appreciation Rate: +6.2%

  • Median Home Value (1-Year Forecast): -0.2%

  • Median Rent Price: $1,345

  • Price-To-Rent Ratio: 12.12

  • Unemployment Rate: 11.2% (latest estimate by the Bureau Of Labor Statistics)

  • Population: 911,507 (latest estimate by the U.S. Census Bureau)

  • Median Household Income: $52,576 (latest estimate by the U.S. Census Bureau)

  • Percentage Of Vacant Homes: 13.86%

  • Foreclosure Rate: 1 in every 11,841 (0.8%)

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View of downtown Jacksonville

2020 Jacksonville Real Estate Investing

Heading into 2020, the prospects of real estate investing remained attractive across the country. Real estate investors were the beneficiaries of a healthy marketplace, and those in Jacksonville were no exception.

“Homes flipped in the first quarter of 2020 were sold for a median price of $232,000, with a gross flipping profit of $62,300 above the median purchase price of $169,700. That gross-profit figure was up from $62,000 in the fourth quarter of 2019 and from $60,675 in the first quarter of last year,” according to Attom Data Solutions.

To be clear, real estate in Jacksonville has been coveted by investors for the better part of a decade. It is worth noting, however, that years of appreciation have started to take a toll on profit margins. Real estate has seen its profit margins grow slimmer due to historically high appreciation rates.

“Among metro areas with a population of at least 1 million, the biggest declines were in Jacksonville, FL (down 45 percent); Portland, OR (down 41 percent); Raleigh, NC (down 40 percent); Tucson, AZ (down 36 percent) and Minneapolis, MN (down 32 percent).”

It must be noted, however, that the decline in year-over-year profit margins isn’t an indictment on the state of real estate investing, but rather a sign that the investing landscape has shifted. In addition to years of historic appreciation, and the new market onset by the Coronavirus, indicators seem to lean heavily in favor of long-term investors. Rental property owners, in particular, appear to receive an edge in the Jacksonville real estate market because of the new housing landscape. In fact, there are three things currently working on behalf of passive income investors in today’s marketplace, and they are all the result of what has happened over the course of 2020:

  • Interest rates on traditional loans are historically low

  • Years of cash flow can easily justify today’s higher acquisition costs

  • The price-to-rent ratio suggests high home prices will increase rental demand

As of June, the average rate on a 30-year fixed-rate loan was 3.16%, according to Freddie Mac. June also represented one of the lowest average mortgage rates ever, and the Fed announced its intentions to keep rates low for the foreseeable future. As a result, lower borrowing costs have brought down acquisition costs for those looking to add to their passive income portfolio. At their current rate, mortgage rates will save today’s buyers thousands of dollars, and real estate investors will be able to pad their bottomline.

In addition to attractive borrowing rates, local investors should be able to expect positive cash flow returns on rental properties. Let’s say, for example, an investor was able to acquire a home for $195,692 (the median home value) and put down $40,000 (about 20.0%) at signing. After accounting for things like a 3.16% interest rate, property taxes, and a few other costs, the monthly mortgage payment would come out to somewhere in the neighborhood of $1,035. In the event the investor was able to receive $1,345 a month in rent (the median rent price), they could come away with about $310 a month. Perhaps even more importantly, rental property owners will be building equity in a physical asset with someone else’s money. Each rental payment not only nets cash flow each month, but also pays down the principal on the mortgage.

Last, but certainly not least, is the city’s 12.12 price-to-rent ratio. With home values resting around the upper one-hundred thousands and annual rent rates averaging more than $16,000, it is actually more affordable to buy a home than to rent one. Typically, a 12.12 price-to-rent ratio would hurt the prospects of rental property owners because demand favors sellers. However, the presence of the Coronavirus has drastically reduced inventory levels. Even those looking to buy are forced to rent, despite having the cash to make a purchase. As a result, demand for rental is up, which bodes well for the entire real estate investing community.

Investors are lucky to have a number of viable exit strategies at their disposal, but none appear more attractive than building a proper rental property portfolio in the wake of a pandemic. Too many important market indicators are pointing towards becoming a buy-and-hold investor to ignore.

2020 Foreclosure Statistics In Jacksonville

Jacksonville’s foreclosure rate is higher than the national average. Nonetheless, the foreclosure rate is a relatively healthy 0.8%, which means approximately one in every 11,841 homes is distressed. To put things into perspective, one in every 14,691 homes across the United States is distressed, which translates to a foreclosure rate of 0.6%. While higher than the national average, the city’s foreclosure rate isn’t far behind. To be fair, both foreclosure rates are healthy, and represent years of progress.

As recently as June, in fact, the number of properties that received a foreclosure filing was down 96.0% year-over year, according to RealtyTrac.

It is worth noting, however, that June may mark the end of improvements made to the local foreclosure rate. In lieu of the Coronavirus, an influx of foreclosures is expected to hit the market, and June saw an 89.0% month-over-month increase. While they are ultimately down over the last 12 months, the sharp spike could be a sign of what’s to come. The financial instability onset by COVID-19 is expected to lead to more foreclosures by the end of the year.

All things considered, the Jacksonville real estate investing community may be able to help homeowners on the brink of foreclosure, and perhaps even flatten the distressed inventory curve. At the very least, all-cash purchases on behalf of investors could prevent financially strapped homeowners from falling into bankruptcy, which begs the question: Is Jacksonville a good real estate investment? To be perfectly clear, it is possible to invest in any market, and Jacksonville is no exception. With the proper understanding of the current market and a sound real estate education, investing in real estate can be a great move in 2020.

Opportunities abound across the entire city for those who know where to look, but one question seems to be coming to the top of investors’ minds first: Where can I invest in Jacksonville, FL?

Investors looking to rehab deals should consider looking at the city’s foreclosure inventory. Approximately six months into 2020, most of the city’s distressed inventory resides in the auction market. More specifically, 58.8% of the city’s foreclosures are either up for auction or will be at some point in the near future. That means local investors will increase their odds of finding a deal with attractive profit margins if they attend local auctions.

The neighborhoods with the highest distributions of foreclosures in Jacksonville are:

  • 32234: 1 in every 2,652 homes is currently distressed

  • 32211: 1 in every 7,391 homes is currently distressed

  • 32223: 1 in every 10,101 homes is currently distressed

  • 32221: 1 in every 10,800 homes is currently distressed

  • 32225: 1 in every 10,987 homes is currently distressed

It is worth noting, however, that the latest improvements to the foreclosure rate are already starting to appear short lived, at least up to this point of the year. The Coronavirus is, after all, expected to take a significant financial toll one homeowners, and perhaps even cause an influx in foreclosures in the coming months. While it is too soon to tell just how much foreclosures will increase, investors who line up financing and position themselves for success at this time could be in line for a busy second half of 2020.

2020 Median Home Prices In Jacksonville

At $195,692, the median home price in Jacksonville is well below the national average. That said, local home values have had a historic run for the better part of a decade. Looking at today’s median home value doesn’t paint the whole picture. To get an idea of how far the market has come, we’ll need to look back to the first quarter of 2012 (when the city showed its first signs of recovery). At that time, the median home value was around $108,000. That means the median home value has increased more than 80.0% in a little over eight years.

To put things into perspective, the median home value in the United States was about $161,000 in the first quarter of 2012. Today, the median home value across the country is $248,857, which represents a 54.5% increase.

While the median home value may not be as high as the national average, it has had a better run over the last eight years. In the last year (May 2019 to June 2020), specifically, home values have appreciated at a faster rate than the national average—6.2% and 4.1%, respectively.

The increase may be attributed to many factors, but three indicators stand out: an improving national economy, positive sentiment, and (ironically) a distinct lack of available inventory. These three indicators, in association with the end of the Great Recession, helped boost the real estate market out of one of the worst recessions in American history and into nearly a decade’s worth of positive growth.

Years of historic appreciation have made these the most expensive neighborhoods in Jacksonville (according to NeighborhoodScout):

  • Ortega / Ortega Forest

  • Greenfield

  • Greenland

  • Saint Johns Ave / King St

  • Avondale

  • Hendricks Ave / San Jose Blvd

  • San Jose Forest

  • Ortega Terrace

  • Deerwood Club

  • Isle of Palms

It is worth noting that the introduction of the Coronavirus has caused appreciation rates to stumble for the first time since the recovery began. Home values have already dipped slightly, but the drop is only expected to be temporary. Forecasts are calling for home values to drop a modest 0.2% in the wake of government shutdowns and inactivity. That said, it may not take too long for local home values to return to normal, and perhaps even surpass their 2020 peaks.

For starters, unemployment appears to have fared slightly better than the national average. What’s more, the inventory shortages that have contributed to price increase over the last eight years have not been resolved. In fact, builders have been forced to stop working in many states, effectively pushing back the timetable we could expect inventory levels to rise. As a result, pent-up demand should create competition and drive up prices sooner rather than later. All things considered, the pandemic has actually created a window of opportunity to buy, for homeowners and investors alike.

Jacksonville Real Estate Market: 2018 Summary

  • Median Home Value: $166,500

  • 1-Year Appreciation Rate: 10.3%

  • Median Home Value (1-Year Forecast): 5.6%

  • Median Rent Price: $1,250

  • Number Of Foreclosures: 3,611

  • Homes For Sale: 2,262

  • Recently Sold: 9,505

  • Median Days On Market: 63

Jacksonville Real Estate Investing 2018

The Jacksonville real estate market was a hotbed of activity for real estate investors from 2012 to 2018; partly because of its relative affordability. To that end, local real estate comes with a less expensive price tag than the national average, so it only makes sense that real estate investors would gravitate to the Florida city. It is worth noting, however, that the Florida city wasn’t able to evade the same inventory crisis facing the rest of the country. While prices were relatively cheap compared to just about anywhere else, they were heading up, according to Jacksonville real estate news outlets at the time.

The appetite for real estate investing placed the city amongst the top five zip codes with an average time to flip a home under 100 days. In other words, turnaround times on flips were faster than the majority of the country at the time. The average time to flip a home in Jacksonville took 99 days.

Jacksonville Real Estate Market: 2016 Summary

  • Current Median Home Price: $215,000

  • 1-Year Appreciation Rate: 7.5%

  • 3-Year Appreciation Rate: 20.2%

  • Unemployment Rate: 4.7%

  • 1-Year Job Growth Rate: 3.7%

  • Population: 842,583

  • Median Household Income: $48,143

Jacksonville Real Estate Investing 2016

The sun shone bright on the Jacksonville real estate market in 2016. The second quarter brought a series of highs for the Bold New City of the South, with home prices, appreciation rates and job-growth all showing improvements. Unemployment and home affordability also continued to look good. The market continued to sway in investors’ favor, as gains in home prices over the previous three years extended the trend of positive price growth after the recession. In addition, the Jacksonville housing market was one of the more affordable in the nation, which aided investors and homeowners, including growing demand for rental properties.

The local real estate market was running on all cylinders in the second quarter of 2016. While price growth slowed, home prices were up from the previous year, with appreciation rates climbing past the national average. In fact, the previous seven years witnessed total equity gains quietly surpass the rest of the country.

The local economy was the strength of the city at the time. Employment held up and was on an upward trend, as one-year job growth rose to 3.7% during the second quarter, compared to the national average of 1.9%.

Jacksonville Real Estate Market: 2015 Summary

  • Median Home Price: 186,500

  • 1-Year Appreciation Rate: 0.8%

  • Unemployment Rate: 5.8%

  • 1-Year Job Growth Rate: 3.3%

  • Population: 842,583

  • Median Household Income: $48,143

Jacksonville Real Estate Investing 2015

Jacksonville is the largest city in Florida, both in terms of population and sheer size. Therefore, positive trends in the real estate industry should be viewed as a big step for the entire state of Florida. Fortunately, the local market made significant improvements since 2015. Experts expected both a strengthening job sector and increasing home values to continue. Jacksonville, for all it went through since the recession, was doing very well for itself as early as 2015.

The Jacksonville housing market, while not as highly publicized as some of Florida’s more prominent markets, was making a name for itself at the time. Despite being in a distressed state, trends suggested that the local market did enough to remove itself from a period of post-recession price weakness. The average price of a home was $186,500. Despite historically high appreciation rates over the previous three years, the median home price was about $30,000 below the national average. On a more encouraging note, experts predicted an increase of more than 2.0% in home prices.

Jacksonville County Map:

Map of Jacksonville neighborhoods

Jacksonville Real Estate Market Summary

The Jacksonville real estate market has done a lot to remove itself from the period of post-recession price weakness that followed the last recession. For what it’s worth, real estate in Jacksonville was hit hard, much like the entire state of Florida. However, Jacksonville has made up a lot of ground, and now stands to come out on the other end of 2020 even stronger than when it went in. The unique combination of affordability, relative economic stability, and pent-up demand should usher in an active real estate market sooner rather than later. As a result, buyers, sellers, and investors should all benefit in their own ways.

*The information contained herein was pulled from third party sites. Although this information was found from sources believed to be reliable, FortuneBuilders Inc. makes no representations, warranties, or guarantees, either express or implied, as to whether the information presented is accurate, reliable, or current. Any reliance on this information is at your own risk. All information presented should be independently verified. FortuneBuilders Inc. assumes no liability for any damages whatsoever, including any direct, indirect, punitive, exemplary, incidental, special, or consequential damages arising out of or in any way connected with your use of the information presented.
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