Baker County Housing Market Deflating… Slowly

Baker County residents who believe the area is growing too fast can relax a bit.

The Florida real estate slump that began nationwide during the summer is clearly obvious here as 2006 draws to a close. The balloon has burst, and property priced too high sits unsold.

The downward slump is most noticeable in the “new market” - developments like Sands Pointe, Rolling Meadows, Heritage Oaks and Cypress Pointe that sprouted up around the fringes of Macclenny in 2006. They are planned and platted subdivisions by out-of-county companies like KB Homes, Drees and Richmond American, Watson and Maronda, all specialists in the mid-range market of homes costing $175,000-$275,000.

For the time being, they are all scaling back, waiting for an uptick in the market expected by mid-2007 as low Florida mortgage rates spark demand.

The City of Macclenny issued 111 new home permits in 2006 through November: 91 of them January through July when the market starting falling off. Had activity continued at the same pace, total permits for 2006 would be riding around 156. Compare that to 115 in 2005.

Even with the downturn, the projected pace for all of 2006 will be 143 new home permits in the city, a respectable 24 percent increase over last year.

Outside Macclenny, new housing starts dropped to three applications this month, down from nine last year in November. In October, there were four, compared to seven last year.

“It starting slowing in summer, but remember we deal [outside Macclenny] mostly with individuals building for themselves,” said Robert Hathcox, the county’s building official. “Our activity won’t pick up until some of these large developments they are proposing get underway.”

The residential real estate market in Baker County has stagnated in the closing months of 2006, and properties priced at the “boom” level are staying on the market.

“The way the market is now, sellers are having to come down on prices – it’s no longer their market,” observes Wayne Combs of Homes and Land of North Florida, a Macclenny real estate company. “Land prices, however, seem to be holding their own.”

To gauge the status of the North Florida housing market, look no further than Heritage Oaks, a Watson Homes development in Macclenny, will construct an amenities center this winter – a pool and other features – to jump start its 70 lot tract. Doug Warren, a spokesman for Watson, has said that the home builder has put special pricing on several units already built to get them off the inventory before January 1.

“If I was in the market, I’d be out there looking and buying right now,” he said. “All the home builders are busy trying to sell off their inventory.”

Even with Florida mortgage loan costs low, Watson doesn’t see the market climbing back to pre-July levels when new and on-market housing rose to often unrealistic levels, but he does predict an upswing by the second quarter of 2007.

On top of builders’ actions and Florida mortgage rates, the title company activity is generally an accurate bellweather of real estate activity, and experts believes Baker County took a hit beyond the flattening market. The spike in gasoline prices this summer turned off the spigot of potential home buyers looking for a way out of Jacksonville.

The number of homes on the MLS in Baker County averaged 50-60 since summer, but of late rose to above 100. On Tuesday there were 106 properties and 28 pending sales. One of the pendings is over $300,000 and several are in the high $200s; the majority fall in the under $200,000 category and that’s where she sees the greatest activity – for now.

So, what do we know?

• The bubble has burst – no one disputes that as November winds down. If you were a seller and wanted in on the frenzy that was 2005 and half of 2006, you missed the boat.
• If you’re a buyer in Baker County in 2007, and you either have the cash or the ability to get a Florida home mortgage, the slump may be working in your favor.
• If you’re one of the large-scale developers caught in the flat zone, you’ve seen this before and you know how to wait out the market.
• If you own land in Baker County and have a mind to sell it, you’re in the driver’s seat.