Lack of available inventory is creating a price escalation crisis

Lack of available inventory is creating a price escalation crisis

2021-09-09T16:36:00+00:00September 9th, 2021|Economy, Jacksonville, Technology|

Writer: Cameron Saunders

housing market Jacksonville2 min read September 2021 — Over the last 18 months, the COVID-19 pandemic has accelerated a migration to Florida, which has resulted in one of the hottest housing markets in the nation. In Jacksonville, where housing prices are traditionally lower than in other major metropolitan areas, the lack of available inventory is creating a price escalation crisis for the region. 

The numbers can illustrate the factors affecting Jacksonville’s housing market. Moving at a faster rate than the rest of the state, Jacksonville has recently become the 12th largest city in America and, from 2015 to 2019, 500 people a week were moving to the region (half a million over the last 20 years). 

In more recent tallies—since the time of the pandemic—Jacksonville has seen the second most number of new residents of any city in Florida. Pending home sales grew by 80.5% in the year from February 2020 to February 2021, by far the largest amount of growth in the entire country (Cincinnati, Ohio was second with 72.8%).

This influx and growth has led to higher home prices and, according to Florida Atlantic University, homes in Jacksonville are selling at an 18% premium. Home values have jumped by 21.1% from 2020 to 2021, again a national record. While this is good news for homeowners looking to sell, it is bad news for first-time buyers and, especially, lower-income buyers, who are being priced out of one of the most dynamic regions in the country. 

In Jacksonville there are nearly 41,000 low-income renter households who have to pay over 40% of their income on housing. In addition to this, there are nearly 11,000 people in the city on the Section 8 waitlist, up from 6,000 in 2018. 

Part of the solution to this crisis is construction, which is continuing apace in the five counties of metropolitan Jacksonville. At this moment, there are 8,000 apartment units in some phase of construction. 

According to data from the U.S. Census Bureau, between January and April of this year, the area posted the 11th highest amount of residential construction permits in the country. But, despite these numbers, construction is not keeping up with demand. The lack of available labor and supply chain issues means that construction is not happening at the rate it should and, when it does happen, the home prices shoot up.