Market Trends for the North Florida Real Estate Market. In this review, we will cover Listing Trends, Listing Price Trends, Days On The Market Trends, as well as take a look at the Sold To List Ratio that the Jacksonville Rental Market is experiencing.
Happy New Year! I hope your new year is off to a great start! The new MLS Rental Data is out with the December market data. Unfortunately, its more of the same. Active listings are way up, days on the market are way up, and surprisingly, New Median List Price went back up as well. Let's dive in!
The number of new listings was flat, which will help the supply levels a bit. However, the “sold” or rented-out, listings were also flat and far lower than the number of new listings. This has driven the supply level, or Active Listings, up to over 1500 properties. This is an 8% increase from November to December. Until we see, the number of new listings decrease drastically, which I do not expect. Or the demand for rental homes increases dramatically, we should expect the active listings and overall supply to continue to rise in the coming months. As we enter the spring season, demand usually picks up, and that will be something to watch for.
The New Median Listing Price is a bit peculiar to me. We are seeing an up-and-down trend from month-to-month with December seeing an increase of almost 6% from November's data. The “sold”, or rented out, Median Rental Price also saw a slight increase from November to December. Despite what the supply and demand data is showing, the listing price of rentals is actually holding steady overall. Personally, I think that investors should consider price drops if they feel that will produce an increase in occupancy. The Days On The Market (DOM), as you will see below, is increasing to an uncomfortably high level. I am one that favors occupancy rates over monthly rental rates, as I feel it produces great annualized returns for my personal portfolio.
If you thought the November DOM data was painful, you don't want to see December's data. We again saw a sharp increase in homes sitting on the market. December saw an increase from 34 days to 43 days, which is an increase of 25%. In December of 2022, the Average CDOM was 22 days. DOM is a major pain point for investors and landlords, vacancies can quickly eliminate most or all of a landlord's annual profits. For that reason I focus on occupancy. With demand staying steady, the only way to ensure your property rents before the house down the street, is to provide a superior product or a better price. I still expect to see investors begin to reduce prices as DOM continues to rise but it has not happened yet according to the data.
This month we again saw a small drop in the Sold Price (rented price) to List Price Ratio. This is really just showing that landlords are dropping their prices or another way to look at this, is that they are listing their properties too high from the start. When we list our homes too high they sit vacant. What we are seeing here is that the actual price the homes are rented for is about 95% of the original listing price. The yellow/gold line is the ratio the sale price (rented price) to the most recent offered price. As you can see, the data shows that once a home gets to the “market value” it is rented out at 99% of the offered price.
The seasonal slump in the real estate market is reflected in the data as we suspected. With active listings continuing to skyrocket and while the overall market is generally seeing initial listing prices stay steady, I think there is an opportunity for investors to fill their vacancies by competing on price. Typically we never want to compete on price, but with the current market trends and economical environment, I believe it is justified and needed in order to fill vacancies.
This data is from the North Florida realMLS and I hope that it helps all fellow landlords make better-informed decisions for their rental homes and investments.
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