Signs indicate housing market may cool, economists say

JACKSONVILLE, Florida – The real estate boom that fueled a significant increase in house prices during the coronavirus pandemic may finally subside.

Economists say there are several signs that the market may correct itself as the price of renting a house or apartment continues to climb.

Financial experts are watching the housing market very closely as the winter months approach after the cost of buying a home or renting has skyrocketed across the country. While experts don’t expect the real estate market to collapse like it did in 2008, economists say there are indicators the market could return to normal.

We are near the top. I don’t expect there to be a crash, ”said real estate economist Ken Johnson.

Johnson says home prices in the Jacksonville area are about 23% higher than they would be under typical conditions.

“Seeing price growth slowing down is good because you don’t want to stray too far, but are we there yet? It’s hard to say we are. I think we’re close, but it’s hard to call by the month or by the week, ”Johnson said.

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Johnson says he expects the price of a North Florida home to slow sharply over the next six to 18 months, based on key metrics such as interest rates, inventory houses and the expected influx of population growth.

According to Realtor.com, last month the median listing price for a home in Duval County was nearly $ 270,000, and homes are selling for roughly the listing price.

Realtors tell News4Jax that in today’s market some homes are still receiving multiple offers and buyers are entering bidding wars, but mostly in popular neighborhoods and on renovated properties.

While there may be indications that the housing market is slowly cooling, Johnson says the rental market could stay at higher prices for some time.

“The number of units built for rental is just not enough so you have a shortage of inventory and you have the huge influx of population growth expected so rents are going to go up,” Johnson said. .

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According to data from the rental listings website Zumper.com, the average rent for a two-bedroom apartment in Jacksonville is $ 1,350, an increase of 17% from the previous year, and the average rent of a three-bedroom apartment is currently $ 1,799, a 24% increase over last year.

Johnson says the growing popularity of River City will only bring more renters and buyers to the area.

“Jacksonville offers tremendous professional opportunities. The city is growing, professional opportunities are developing very quickly, very quickly, and you can think of other parts of the country where these opportunities are not available, ”Johnson said.

If you’re considering renting or buying in the current housing market, Johnson says renting will earn you more money over time if you take the money you would have invested in the home – like your down payment. funds, taxes and insurance – and invest that in a portfolio of stocks and bonds instead.

Copyright 2021 by WJXT News4Jax – All rights reserved.

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