Jacksonville Real Estate Market Update | July 2022
Aug 11, 2022July marks the final month before school starts and is typically filled with family vacations and trips to the beach. Our market continued to normalize from the intense conditions in '20 and '21 where any home put on the market would sell and buyers offered everything they had to secure a property.
The Jacksonville Market Strength Index (MSI) decreased to 164.32 in July marking its lowest value since February 2021. The decrease is largely tied to the drop off in pending and closed sales as buyers hit the pause button in July with rates averaging 5.3% and average prices hovering around all-time highs of $439,000.
Additionally, we've seen a flurry of traveling take place as many families have gone two years without a vacation which is likely impacting activity in the housing market as Realtors and their clients take a break from work.
Historically, we see the index peak in the summer and decline through the second half of the year and will watch to see if that seasonal trend continues. As you can see below in the full history of the index since 2003, rising rates, ambitious sellers, and the slow down on transactions has cause us to peak earlier in the year which may point to a less traditional 2nd half of the year.
Should rates continue to come down into the 4's, we may see a reversal in the index and it could finish higher at the end of the year.
About the Market Strength Index
The Market Strength Index (MSI) is a proprietary tool created by The Market Distillery in order to measure how healthy the local Jacksonville real estate market is based on a variety of statistically significant factors.
When asked "how's the market?" you no longer have to piece together a variety of statistics or simply rely on average price and can instead reference this index to help provide an answer.
For example, average price has continued to move higher through the year while the MSI peaked in April and has been declining modestly since then. This shows underlying changes in the market that we have been feeling due to rates increasing, pending and closing sales decreasing, and homes generally being listed above the market price as sellers maintain the "see what you can get" mindset from 2021 when everything sold as soon as it hit the market.
There's no cause for major concern at this point though as we are primarily coming back to earth from the market hysteria of late 2020 and 2021. Additionally, with rates coming back down into the lower 5's in the past few weeks, we expect to see the index increase for August if things hold indicating additional strength in the market.
Overall, we are still in a historically very strong market with the MSI 32% higher than the long-term average and the underlying fundamentals of supply and demand are poised to keep prices at or near current levels for the foreseeable future.
