Jacksonville Development Surges Into ‘06
In Jacksonville, mortgage rates and the median home price on the rise, which is enough to give pause to area real estate agents and those looking to buy or sell a home in 2006. But don’t worry, says Ray Rodriguez, president of the Real Estate Strategy Center of North Florida.
“We’re OK. We will let some steam off, but the bubble here won’t burst anytime soon. It will slow down a little bit and we will get back to reality. Speculative buying is slowing down a little bit due to rising interest rates,” said Rodriguez, who analyzes every aspect of the local real estate market, from the number of permits pulled in a particular development to the average price of beach condos.
The Jacksonville real estate market has been booming for several years now. The median home price in the four-county area (Duval, Clay, Nassau and St. Johns) surges monthly, and massive developments receive City Council approval at nearly every other meeting. The Northeast Florida Association of Realtors has more than 5,000 members and counting. Blink and you may miss another condo going up at the beach or an entire part of downtown changing.
“The Dinsmore area in the northwest corridor could be a real area of interest for development next year for two reasons,” said Rodriguez, who believes it’s still a good time to be in the real estate business, and that those good times should last through the next year. “One, it’s dry, not like the New Berlin Road area that’s wetlands and marshes. Two, it has good infrastructure. Three, it’s the only area left close to the I-295 corridor that’s affordable.”
One of the key indicators Rodriguez uses to forecast development in a particular area is permit activity. If hundreds of permit applications are filed for a specific area in a relatively short amoung of time, it’s a pretty safe bet that new roads and houses are soon to follow, as he says is taking place in the Dinsmore area. The Market Consultant predicts the Butler Boulevard area and the beach will continue to flourish in the current economy and market.
“That area will continue to grow despite the construction and that growth will happen with two areas: the Southpoint area where people work and the St. Johns Town Center area. That area is one of the hottest markets around,” Rodriguez said.
Development is going vertical at the beach, which is no surprise as land is at a premium. There are several new high-rise condos in the works and about 20 more permitted by the City of Jacksonville. The other development trend is either renovating existing older homes or tearing them down and rebuilding. Land refurbishing, where small duplexes are being converted into condominiums, is happening at highly sought after locations across the nation.
Downtown Jacksonville will continue to grow next year as well, according to the city’s Daily Record newspaper. While the Southbank is proving to be the next big urban residential mailing address, the Northbank is quickly turning into the center of commercial development. Both are growing at an extremely quick pace. Rodriguez also says to keep an eye on the city’s Riverside and St. Nicholas areas, as new announcements will be coming soon.
One area of the North Florida real estate market that does concern Rodriguez is the abundance of homeowners that took out unconventional mortgage loans. Rising mortgage rates and the fact that many owners are not building up equity could lead to serious issues for those with adjustable-rate and interest-only loans. Rodriguez believes those who bought homes worth $250,000 or more may experience problems making payments in the not-so-distant future.
“Those that bought in at that price range wouldn’t have if it had not been for interest-only mortgages,” he said. “Eventually, they are going to have to pay the piper and they won’t have any equity built up.”
