Writer: Joshua Andino
2 min read April 2023 — 873 single-family and townhome building permits were filed in March, up from February’s 664, according to the Northeast Florida Builders Association.
While the boost is a positive, the numbers are still down by 44% compared to this time last year, where Clay, Duval, Nassau, and St. Johns county saw 4,225 permits in 2022. Today, that number is 2,384, as first reported by the Jax Daily Record. At no point did permits surpass 1,000 filings – in 2022, over 1,000 permits were filed on nine separate occasions.
Indicative of how hot the market was, March 2022 also marked the beginning of the Federal Reserve’s interest rate hikes as prices continued to rise and inflation became increasingly entrenched in the market. On average, 30-year fixed-rate mortgages averaged 4.42%. Today, the average is 6.28%, according to Freddie Mac.
The slowdown is likely being driven by a number of factors. Interest rates have increasingly impacted demand on both the builder and buyer side of the housing markets. With lending increasingly expensive, employing debt to finance projects is increasingly unattractive, while buyers themselves may not be able to afford the increased mortgage payments. Land prices themselves also factor into whether projects pencil out or not.
“Because developers can’t get any more land or any more acreage to build properties, their numbers are going to go down,” explained Rob Kearney, owner of boutique firm Kearney Real Estate. He added, “It’s a little more of a reflection of the lack of land inventory than it is of a lack of demand. The demand is still there but the fact that they can’t get enough land has led to the slowdown in real estate.”
Despite the challenge when it comes to navigating rates and land prices, some developers are still making it work.
Just south of Jacksonville in St. Johns County, a new housing development was proposed on 581 acres of land off of Greenbriar Road and west of Longleaf Pine Parkway. The developer, represented by Ellen Avery-Smith, is seeking a Comprehensive Plan Amendment land use change from Rural/Silviculture to Residential-B, as noted by The Jacksonville Business Journal. The developer would also contribute over $11 million to road improvement projects.
The proposed Landings at St. Johns would provide 761 age-restricted homes. Adjacent to the project would be The Landings at Greenbriar, which would offer 588 single-family homes.
“We are fortunate to be one of the fastest-growing communities in the country and in the state of Florida, however, this comes with many challenges,” explained St. Johns County Administrator Hunter Conrad to Invest in an earlier interview. He added, “Our county and city governments are specifically looking to ensure there is smart growth.”
Overall, and despite national economic headwinds, Northeast Florida continues to be an attractive market for a number of developers and new residents migrating to the area.
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