Writer: Joshua Andino
2 min read January 2023 — Jacksonville and the North Florida markets entered the new year with more than a few tailwinds carrying the residential real estate market forward. Invest: spoke to leaders across the region to hear their insights on how the residential market, and their business, is faring amidst a changing rate environment, tight inventory and continued population growth.
What are the current residential real estate trends impacting the market in Northeast Florida?
Jennifer Hendry, Broker & Owner, CrossView Realty
“The market is rapidly changing, making it very difficult to predict anything. The biggest task is being on top of it, being prepared to make a change and casting the net wider rather than being so focused on just one area. Diversification is also essential. The pendulum is swinging away from being such a strong seller’s market. Prices have leveled off, so we’re seeing a vast majority of homes staying on the market longer. We’ve never had more than 2,100 homes on the market in our area at any given time last year. We’re at 5,400 today. In less than two months, we’ve more than doubled the highest number of homes we’ve had on the market. The investor pool has significantly dropped in our area because they see home prices aren’t increasing to the extent that they were. We’re starting to see first-time buyers able to move forward on some properties but they’re still paying top dollar. The problem is payments are higher and people are starting to sell now because homes are starting to be overvalued.”
Alex Sifakis, President, JWB Real Estate Companies
“The past two years have been incredibly strong when it comes to land. The real estate market is beginning to level off, which is a great thing because we cannot continue with 20% appreciation and rent growth. For us, we haven’t seen scarcity in land deals because we’re great on the acquisitions side. We bought almost 1,000 properties last year and are on pace for another 700 this year. We’re still able to find deals because of our connections and those skills. It’s definitely made things a little more difficult but we’ve still been successful. Jacksonville is the largest city in the country when it comes to the amount of land it has and we have a renewed focus on infill sites – specifically Downtown. Our core business is around single-family development but in the past two years, we have been in a huge push for Downtown. We own about 20 city blocks and are about to embark on a significant amount of urban, mixed-use development with multifamily aspects.”
Sherry Davidson, President, Davidson Realty
“Jacksonville has seen an influx of out-of-area buyers, many of which are coming from places where the market prices were much higher than they are here. Don’t get me wrong, our prices have gone up a lot just like everywhere else in the country, but we still offer a better value for what you are purchasing in comparison to other markets. We have also seen a ton of buyers move into the area who want pools. This started during COVID and it hasn’t changed. People want to have an outdoor space with a nice pool and amenities such as a kitchen and fire pit. A lot of people are still working from home, so being able to spend time outdoors at your own house is an accommodation that is in high demand.”
How have market factors, like rising interest rates, shifted the landscape?
“Over the last two years, sellers made more money due to high prices. Having buyers meant potentially having to fight multiple offers. Houses today are starting to stay on the market longer. It’s a win if you have a buyer that’s ready and financially able. They’re the better customer today. The property management side of the business was in high demand due to high rent growth. We’re finally starting to see things slow down and inventory is increasing. Rents are astronomical. What $1,600 per month can get you now is too small and isn’t feasible for most families. A great deal of property management business shrank over the last year but not for institutional companies. They’re looking for investors that have a book of business. I’m hoping we’ll start to see the property management business increase over the next year, versus shrinking back down. Loan-wise, rates are fluctuating and still increasing. People are saying when you work with a customer, marry the home, not the rate. Refinance in 18 months when rates are lower.”
“The interest in real estate was strong and steady prior to COVID, then it disappeared for three months and shot back up. We couldn’t build houses fast enough – we were selling houses we hadn’t started construction on yet, which turned out to be a bad decision because of how high prices climbed. In the past few months due to interest rate and economic volatility, that has
pulled back. We needed a slowdown – things are moving from 1,000 miles per hour down to 72 miles per hour.
We are the most affordable large market in Florida and I’m excited to see a calm slowdown. Hopefully we will be on a smoother, more normal trajectory in the next few years.
Outside interest is pulling back on single-family and multifamily. There is a pullback in demand and a sense of caution from investors, which is warranted. It creates opportunity and we’re pushing forward with our strategy. The best thing for the market would be for interest rates to just stay in the same spot consistently rather than the rollercoaster they have been on.”
“The interest rates have been an issue, but I think a bigger issue has been the stock market adjustment because people feel like they have lost so much of their wealth. The national media has also scared people to death. Every article you read is about a housing crash, recession and prices dropping. We had a period of about six weeks where we saw almost no buyer activity as they waited to see what would happen with prices and then we had eight contracts come in the following week. We are seeing homes stay on the market longer and prices beginning to adjust, but homes are selling again.”
What are your priorities moving forward?
“Agent retention is our key focus. Many people came into real estate over the last two years. The industry will shrink, which is a really good thing. My personal focus will be on what I can do for my agents at CrossView. We really care about our people. Our tagline is, “going above and beyond.” I’m also really focused on what the agents do for their customers. The name of the game is honing our skills, getting better and training.
We’re also upgrading our space at CrossView to almost four times the space we’re currently in. Over the last couple of years, so many people have moved over to virtual. I’m not a fan of Zoom meetings and prefer to meet people in person. Handshakes are better and bringing people together makes all the difference. CrossView Realty is about relationships and bringing that sense of community back. That’s where we definitely stand out from most of our competition. We want to help everybody.”
“We are focused on Downtown development and property planning and will be working on the permitting and construction for multiple significant projects looking ahead. I’ll continue prioritizing turnkey property sales and development. Essentially, we will keep doing what we are good at.”
What sets your firm apart from its competitors?
“The biggest thing is that we have skills in all areas of real estate. We have expertise when it comes to buying land, land development, consulting, managing property, working with engineers and subcontractors, working with commercial real estate and working with residential real estate. So, when our agents have issues, we have a wide range of knowledge and experience that helps us find the right solution. When people walk through our door they are looking for someone who they can trust. A lot of the time our customers are from out of the area and are looking to make a big purchase. So, the thing that we offer more than anything is a trustworthy partner who is willing to hold their hand throughout the process of purchasing a home.”
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