Jax homebuilding begins to pick up

JACKSONVILLE - “Jacksonville’s job losses have started to moderate. It is likely that the economy of Northeast Florida will recover a bit sooner than much of the rest of the state, as the housing bubble was less of a factor here. Military and port-related jobs have been more resistant to the problems created by the decline in the housing market,” said Anthony Crocco, director of Metrostudy’s North and Central Florida divisions.

However, a lack of job formation continues to plague the Jacksonville area. In the Jacksonville MSA, 23,000 jobs were lost in the 12 months ending in August 2009, a 3.7% rate of job loss. Unemployment continued to grow in the MSA, reaching 10.7% at the end of the third quarter. While unemployment may be nearing its peak, a quick rebound in job formations is not forecast.

“The housing market is stabilizing, as new-home inventories become tighter and resale-home inventories decline,” Crocco said. “Unfortunately, distressed housing is still working into the market, and we expect at least another few quarters of high-volume short-sale and foreclosure activity.” Short sales are sales of homes for which the lender accepts less than the existing mortgage.

According to Metrostudy’s most recent survey of the core Jacksonville market, which includes Clay, Duval, Nassau and St. Johns counties, there were 885 single-family housing starts in the third quarter of 2009, a decline of 25.1% compared to last year’s third-quarter rate of 1,181 units. Yet third-quarter starts showed an increase of more than 200 units compared to each of the previous three quarters.

The number of units under construction in the third quarter reached 1,020, a decline from last year’s third quarter, but an increase of 104 units since the second quarter of 2009.

Single-family quarterly closings during the third quarter of 2009 totaled 907 units, 32% lower than last year’s third-quarter rate of 1,334 units.

During the third quarter of 2009, the annual closings rate was 3,794 units, 37.6% lower than the annual closings rate of 6,080 units recorded at the end of the third quarter of 2008. Metrostudy’s closings figures represent move-ins evidenced by actual signs of occupancy, said Crocco, who noted that move-ins statistics are a true barometer of demand, as opposed to deed recordings or contract sales, both of which can be artificially inflated by speculative purchases.

“While still moving slightly lower, new-home pricing has stabilized during the past few quarters in Jacksonville, especially when compared to most of the larger MSAs in Florida,” Crocco said.

The $150,000 to $200,000 price segment had the largest number of annual starts and closings at the end of the third quarter, with 730 annual starts and 951 annual closings. The $200,000 to $250,000 price segment followed, with 716 annual starts and 945 annual closings.

Single-family inventory, which is composed of units under construction, finished vacant units and model homes, declined 29.7% from September 2008, to 2,354 units in September 2009, a 7.4-month supply. Finished vacant inventory decreased 23%, from 1,386 units at the end of the third quarter of 2008, to 1,071 units at the end of the third quarter of 2009.

“We believe the same general market conditions are likely to exist for at least the next few quarters, with a caveat that near-term activity will be influenced greatly by the outcome of the negotiation to extend, expand or allow expiration of the home buyer tax credit,” Crocco said.

Metrostudy is a provider of primary and secondary market information to the housing industry and related industries nationwide.