Fortunately for those making below the median income level, projects focused on affordable hosuing in Jacksonville are underway.

With median prices rising in the city, it was a welcome course of action when the Federal Home Loan Bank of Atlanta awarded more than $20.9 million in grants and subsidies to fund 68 affordable housing projects in 12 states and the District of Columbia. Including Jacksonville.

The projects include the Whispering Woods apartments in Fernandina Beach and a home ownership program in Putnam County. Those applying for a Florida mortgage loan with these complexes in mind should be in for a deal.

The Whispering Woods apartments will get a $500,000 grant and a subsidized $1.1 million loan through BB&T Co. for the construction of 24 units targeted for low-income seniors in Fernandina Beach.

Putnam County Homeownership will use a $500,000 grant to build 12 single-family homes for first-time home buyers in Palatka.

A total of $6.9 million in grants was awarded in Florida for 669 housing units.

The awards were part of $40.2 million in grants and subsidies Federal Home Loan Bank of Atlanta provided in 2006 to create or preserve more than 6,000 units of affordable housing. The bank awards the funds twice a year to member financial institutions and their community housing partners.

Nassau and St. Johns counties have a lot in common: A-rated school districts, top resort and tourist destinations and oceanfront views. But, experts say, it’s their Florida housing prices that make them increasingly different.

While the rest of the Jacksonville housing market continued to experience a slump in home sales in November, Nassau saw a 13 percent increase in sales of existing homes compared with November 2005, according to the latest data available from the Real Estate Strategy Center of North Florida Inc.

New home sales were up 14.6 percent in Nassau County, while St. Johns County saw only a 5.7 percent increase. Florida home loans lagged behind a bit in that region.

Those numbers indicate that people seeking a suburban lifestyle and an easy commute to work in Jacksonville are being lured away from St. Johns County - the fastest-growing and most expensive county in the MSA - to Nassau County by lower home prices and better infrastructure planning, said Ray Rodriguez, president of the Real Estate Strategy Center.

“It’s more affordable,” Rodriguez said. “The bottom line is people prefer to travel north.”

According to Rodriguez’s data, the majority of the existing home purchases in Nassau County are of houses between 1,500 and 1,750 square feet. At $160 per square foot, homes in that range are on average about $13 less per square foot in Nassau County than comparably sized homes at $173.46 in St. Johns.

By contrast, in the 2,000-square-foot to 2,500-square-foot range, Nassau County is $18 more per square foot than the $184.71 cost in St. Johns County.

A study that county officials published in 2003 called “Growth and Development Trends in Nassau County” estimated the population would mushroom to 83,300 permanent residents by 2010, based on development plans for more than 10,000 homes not yet built and the belief that Florida mortgage demand will increase.

According to the U.S. Census Bureau, Nassau County had 64,746 residents in 2005, compared with 57,663 in 2000. Nassau County Planning Director Walter Fufidio said that with the continued pace of growth, which includes a 3.7 percent increase from 2005 to 2006, he expected an even greater population for 2010.

Nassau County officials compare their county more to the Flagler County housing market, which lies just south of the Jacksonville MSA, than to St. Johns. Once considered a rural retirement community, Flagler has earned the status of fastest-growing county in the nation several years in a row. But that growth has brought growing pains such as bottleneck traffic jams and a race to build new schools.

Newly elected Nassau County Commissioner Mike Boyle, who made the focus of his campaign the need to find strategies to maintain growth, said Nassau is already experiencing some similar growing pains. County officials hope those pains will be addressed by Fufidio, who was the planning and zoning director in Flagler County.

Even before Fufidio’s arrival in Nassau, officials developed a special taxing district called a municipal service benefit unit, not based on ad valorem taxes, that will pay for the transportation improvements needed in preparation for the more than 10,000 new residential units in the coming years.

Among the improvements is a four-lane highway called Amelia Concourse that will connect County Road 107 to State Road A1A in the area where much of the growth is expected.

“County officials recognize that additional improvements are going to be required,” Fufidio said.

Still, county officials and residents must decide whether Nassau County will be a bedroom community, a retirement community, develop an identity all its own or a mixture of all three, Boyle said.

“What identity does Nassau want?” he said. “That’s the question I think we’re grappling with.”

The Jacksonville Housing Commission will spend an additional $5 million on home repairs for residents awaiting assistance through its Owner Occupied Rehabilitation Program.

The program provides home repair assistance to about 200 low-income residents in conjunction with two local nonprofits, Builders Care and Jacksonville Housing Partnership Inc. The additional funding will allow the partnership to provide assistance to twice as many residents in the Jacksonville housing market.

The program will work form an established list of more than 3,500 cases. No new cases are being accepted.

Repairs include general repairs, the addition of handicap-accessible features and electrical or plumbing upgrades or overhauls. This should help residents save on Florida home improvement loans.

The money comes from loan repayments recaptured when an individual who got Florida mortgage assistance from the city sells or refinances their home.

University of North Florida real estate professor Sid Rosenberg has made a living analyzing real estate markets for the past 35 years – and through relatively smart growth, a solid economy and minuscule unemployment, Rosenburg says the Jacksonville housing market will rebound from anything resembling a bubble.

“I am not a pessimist about Jacksonville at all,” Rosenberg told the Rotary Club of Jacksonville Monday. “Compared to other markets in Florida, it is a lot healthier. However, we are fooling ourselves if we don’t think there’s been a slowdown.”

He’s seen the recessions of the 1970s and ‘80s. He’s watched as areas of the state have created an atmosphere where supply exceeds Florida home mortgage demand and the local median home price isn’t in the same area code with the local median income.

Rosenberg said past local real estate downturns can be directly attributed to a struggling economy, high mortgage interest rates and high unemployment — three economic factors the Jacksonville area has been fairly insulated from during the past decade.

The professor, who has his degree in both real estate and finance and has lectured and taught on the subject all over the world, said 2004 was the time when the local real estate market began to see a slight downturn.

“A new home became unaffordable to the Jacksonville person who made a median income,” he said. “During that time, there was a sharp rise in prices.”

In June, the median home price in Jacksonville peaked at just over $213,000. Since then, affordable housing plans in the city have been proposed and accepted.

The median price, meanwhile, has fallen steadily and stood at about $197,000 as of October. According to Rosenberg, this is good for both the buyers and the developers - homes are becoming more affordable and developers are starting to move inventory.

The same is not true in other parts of Florida – particularly in the Southwest part of the state, where the median home price is nearly double the median income.

“You can clearly look and say that the Jacksonville market is holding up better than any other,” said Rosenberg, who joined UNF in 1991. “We have finally seen a drop in median homes prices.”

Rosenberg says the median home price needs to drop about another 15 percent for Florida mortgage demand to return in full. Between fluctuating mortgage rates and the other costs of living, a drop of 15 percent — that would make the local median home price about $165,000 — would allow many to purchase homes who cannot afford them right now and haven’t been able to for several years.

Rosenberg said one of the biggest problems with the real estate market right now is homeowners and developers wanting more than market value for both older and new homes.

“A lot of people keep asking prices [that are] too high,” he said. “This is normal. Some will drop their prices, and we will see slowing depreciation. There are all kinds of exceptions, but housing prices right now are about 13 percent too high.”

The real estate sky is not falling in around the Jacksonville houisng market - but experts say some Chicken Little investors who are running away from Florida condominium contracts and losing thousands of deposit dollars think it is.

In the last six months, real estate attorney Michael Freed has seen a quadruple jump in the number of clients who are either buyers trying to get out of their Florida mortgage loan contracts or developers trying to force buyers to close or pay punitive damages.

It’s the result of the fever-pitched market in 2004 and 2005 that included the announcement of dozens of new condominium construction projects around the city, said Freed, of Brennan, Manna & Diamond PL.

Results of forfeited deals

In many cases, Bishop Lending Group President Ben Bishop said, speculators signed contracts and sealed the deal with a 10 percent to 25 percent retainer fee before the first shovel of dirt was turned, anticipating that property values would continue their skyward ascent and they would profit from the sale of the unit or units at the closing table or shortly thereafter.

As news broke that the market was falling, the closing dates began to loom overhead and investors fled, realizing that they were not going to be able to make a quick profit and fearing that it would only get worse.

Some are seeking legal counsel to find a way to get their deposit back, others are leaving behind $60,000 or more, Freed said.

“They’re thinking that it’s better to lose a little now rather than a lot later.”

But that shortsightedness is causing long-term effects, he said. “It’s the people walking away from contracts who are perpetuating the [Florida housing market] conditions.”

Still, some say the number of investors backing out of contracts in Jacksonville is far fewer than those in Central and South Florida because it is not considered a resort destination city. Debbie Riley, the sales manager for Devlin Development Group, said her company has been spared investor back-outs in all of its high-end multifamily projects because it limits the number of purchases to one unit per buyer.

Mary Anne Hashem, director of builder sales and marketing at Prudential Network Realty, estimated that it has happened in less than 1 percent of the closings in the high-end condominium projects she represents and about 7 percent to 8 percent in the entry-level projects.

Hashem described those who walked away from the closing table - leaving behind on average $15,000 to $20,000 - as less sophisticated and experienced than the high-end buyers.

But in all those cases, she said she put the units back on the market and resold them within weeks or months of the original closing dates.

Reselling units

In some cases, the developer eventually gets more out of a resold unit, she said, if he keeps the retainer and resells the unit at the same price. But in other cases, Freed said, the developer is forced to resell at a lower price and then sues the investor for the difference.

Some investors have walked away from binders on single-family homes, but Freed said it is more prevalent in the condo market because that is where investors tend to buy. He expects the number of investors and jilted developers, particularly the smaller companies, to continue to grow in the coming months as more condo projects near completion.

Although it is unclear where and exactly how many condominium units have been affected in Jacksonville by buyers pulling out, Sid Rosenberg, a real estate professor at the University of North Florida Coggin College of Business, said many of the Florida mortgage contract issues are happening at the Beaches, where most of the speculative purchases took place.

But he considers the back-outs to be rational decisions.

“It doesn’t surprise me one bit,” Rosenberg said of the Chicken Little reaction. “I would have probably done the same thing.”

With average home prices are hovering around the $250,000 mark in St. Johns County, the average workers has trouble taking out a Florida mortgage in the area.

Fortunately, developer Charles Atkerson is preparing to start his second condominium development on State Road 16 with units starting in the mid-$100,000s. It’s one of a few affordable housing projects underway around Jacksonville.

The president of C. Atkerson Inc. closed on a 40-acre parcel on Inman Road. adjoining the Belz Outlet Mall, on Oct. 14 to build the complex based on his success with another mixed-use condominium project nearby. That project is still several months away from completion. but is nearly sold out.

“There is a distinct need,” Atkerson said. “Affordability in St. Johns is almost becoming unattainable.”

That’s why, after 20 years of specializing in horizontal subdivision development, Atkerson said he decided to shift the company’s focus toward building projects that teachers, police officers and other work force professionals could afford with a basic, non-exotic Florida mortgage loan.

In 2004, Atkerson Inc. acquired 75 acres on State Road 16 just south of the Belz Outlet Mall for $2.9 million and developed Old Town Villages, a mixed-use project that includes 276 condominiums tucked behind four acres of commercial space, three of which are slated to be the site of a 100-room Fairfield Marriott hotel.

Fifteen units are still available at Old Town Villages.

Atkerson Inc. Chief Operating Officer Serena Wakefield attributed the success of that project to its location and its price, which the developer was able to keep below the average cost of a home in St. Johns County because of the cost of the land and the company’s close relationship with general contractor Johnson, Graham, Malone Inc.

St. Johns County officials have been grappling with the issue of affordable Florida housing for years. In 2002, the Board of County Commissioners commissioned an affordable housing study that concluded that, of the 38,999 homeowners in the county in 2001, about 41.5 percent fell below the 80 percent median income threshold established by the U.S. Department of Housing and Urban Development for affordable housing - and that by 2015 an additional 237,200 affordable housing units would be needed.

“The need for affordable and work force housing is very serious in St. Johns County,” said Tom Crawford, director of the county’s housing and community services division. “There’s certainly a segment of the population that could benefit from this.”

The study contained several recommendations to the county including creating an affordable housing incentive plan, removing or reducing government regulations and policies on affordable housing and creating an affordable housing zoning district.

Atkerson, of course, emphasized that those taking out Florida home loans for his projects would not be sacrificing quality for price.

“We don’t yield to compromise,” Atkerson said. “A 90-degree angle is a 90-degree angle whether it’s in a $150,000 condo or a house in Ponte Vedra.”

Sales of existing single-family homes in the Jacksonville housing market dropped 18 percent in the third quarter, according to figures from the Florida Association of Realtors, as sales fell by at least 11 percent in all 20 markets tracked by FAR.

The 4,173 existing single-family homes sold in the third quarter was down from 5,116 sold in the third quarter of 2005; more and more Florida mortgage applicants appear to be waiting on the sidelines until prices come down.

But, for whatever reason, that isn’t happening yet: the median home price of such residences rose 5 percent to $204,500.

Across the state, sales fell by 34 percent and the median price of those homes was virtually unchanged at $247,900, up $100 from a year earlier.

However, the chief economist for the National Association of Realtors held out hope for a rebounding housing and Florida home mortgage market as early as the first quarter of next year.

“Many potential buyers who have been taking a wait-and-see attitude or are being methodical in the search process are being enticed by lower home prices,” David Lereah said. “Given a positive economic backdrop of lower [Florida mortgage interest rates] and job creation, we expect sales activity to pick up early next year.”

Sales of existing condominiums also fell statewide and locally.

Across the state, the number of sales fell 41 percent and the median price dropped 3 percent to $204,300.

If you thought the Central Florida housing market was poised for a crash along the lines of what’s going on in the Southern portion of the Sunshine State, you’d better reexamine your thinking.

Home values in Metro Orlando and two other Florida markets were among the nation’s fastest growing in the third fiscal quarter, an analysis by an online real estate research company showed.

The popular site Zillow.com estimated that greater Orlando existing-home values in the quarter rose 17.6 percent from the previous year, trailing the Jacksonville housing market, which averaged 19.1 percent.

Portland-Salem, Ore., also edged out Orlando with 17.9 percent home price appreciation. The Richmond-Petersburg, Va., area was fourth, posting 16.2 percent average, while Tampa-St. Petersburg came in fifth at 15.9 percent.

So much for that rise in Florida home mortgage rates killing demand for properties. While parts of South Florida are struggling mightily in this market, other areas of the state keep chugging along and posting strong growth.

Zillow.com uses a proprietary method for its analysis. The Seattle-based company said that despite a decline in values in many regions during the quarter, home values were up 4.8 percent year-over-year in the 36 regions it studies. Declines were noted for Boston; Hartford, Conn.; Cincinnati; Minneapolis; San Diego; and Sacramento, Calif.

The Jacksonville housing market is going through a slow period at the moment. The lack of movement among new and existing properties is having a trickle down effect on related industires.

For example, third quarter earnings for the St. Joe Company fell 83 percent, as the developer pulled out of the home building business in Florida altogether. St. Joe earned $6 million in the third quarter, or 8 cents per share, down from the $36.1 million, or 47 cents per share, it earned in the third quarter of last year.

Chairman and CEO Peter S. Rummell said the company does not expect the slowdown in the housing market to reverse itself any time soon. Florida mortgage applications aren’t exactly being sent in on a regular basis these days.

“The inventory of new and existing homes in the marketplace remains high,” Rummell said. “We continue to believe it could take until 2008 before a supply-demand balance begins to return.”

Earnings in the commercial real estate segment fell by almost half to $7.8 million, while residential real estate segment earnings went from $30.5 million in the third quarter last year to a loss of $4.4 million in the third quarter of 2006.

The company expects earnings for 2006 to be at the lower end of the previously stated range of 70 cents to $1.05. Chief Financial Officer Anthony M. Corriggio said St. Joe will stop making earnings estimates beginning in 2007.

It’s difficult to say when these sorts of figures will turn around. A recent report states we should expect Florida mortgage loans to continue to slide through 2007.

In some parts of the state, Florida mortgage applications are on the rise.

Unfortunately, however, the housing market slowed further last month in Northeast Florida. There was a significant dropoff in the sales of single-family existing homes; while the median sale price of local homes also dropped slightly.

Based on figures from the Florida Association of Realtors, 1,191 homes were sold in September. This was a 23 percent decrease from the same period in 2005. Moreover, the number of sales statewide fell 34 percent. Such a growing inventory means that prices are bound to drop even more - and Florida mortgage loan applicants should be poised to pounce when they do.

The median price locally of the aforementioned sold homes was $190,800, down 2 percent from a year ago. Across the state, the median price fell 1 percent to $243,900.

The numbers for the Jacksonville market included figures from the St. Augustine-St. Johns County Board of Realtors for the first time since August.

The St. Johns County numbers, however, were not included in the figures for sales of existing condominiums. In the Jacksonville housing market, the 109 sales were down 52 percent from September 2005, while the median price was unchanged at $176,700.