As we progress through the second quarter of 2022, the U.S. housing market continues to report record home prices and low inventory. While these trends continue, there is a sense that the massive home price growth rate may slow in the near future.
According to Lawrence Yun, chief economist for the National Association of Realtors, “Prices throughout the country have surged for the better part of two years, including in the first part of 2022. Given the extremely low rate of inventory, we are unlikely to see prices decline, but appreciation should slow in the coming months.”
Inflation concerns and recent rises in interest rates have the potential to curtail demand. As of early May, the average rate of a 30-year fixed mortgage has risen more than 2% to 5.42%. These rising rates limit the borrowing power of potential buyers, which could result in a reduction in home demand.
This March, pending home sales dropped 8.2% when compared to the prior March. Despite these factors, home prices continue to rise. The median national home price in March rose 16.8% compared to March of 2021. The key mantra for real estate, of course, is “location, location, location,” and we all know that North Florida is the greatest place to live in the country.
Our combination of favorable tax structure, excellent business economy, job and wage growth, sandy beaches and sunny skies make us an extremely desirable place to live and work. In 2021, the Jacksonville area saw the second highest “Net Migration In” figure of all large cities in the U.S., behind only Austin, Texas. This measures the number of new people moving into an area, minus the number of people moving out of the area. These new inhabitants to our area, along with our local population that is changing homes, continues to drive demand for our limited inventory of houses.
This is particularly true of the Ponte Vedra/Nocatee area and is reflected in our local statistics. The median home price in March for a home in the Ponte Vedra/Nocatee area rose to $722,500, up more than $87,000 from $635,000 in March of 2021.
Other key statistics that impact the Ponte Vedra/Nocatee include:
Our area continues to exhibit a strong seller’s market. The current home supply gives the area 1.2 months of inventory, vastly below the six-month supply that is considered a balanced market.
However, this monthly supply is up 10.2% from the same time last year. (Source: Northeast Florida Association of Realtors).
The housing market has always been cyclical and remains one of the safest places for anyone to invest their money. In addition to the pride of owning one’s own home and the savings in rent, coupled with the growth in equity, make home ownership advantageous for most people.
While there are no guarantees, historically a home grows in value by roughly 4% per year. Whether you are considering buying or selling a home, this is a wonderful time to do it; and there is no better location than North Florida and the Ponte Vedra/Nocatee area.
— Pete Sherrill, Team Leader, Keller Williams Realty Atlantic Partners
