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St. Johns County

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St. Johns County follows national trend as home prices increase

Home prices in St. Johns County are keeping pace with the rising prices seen across the country.

A report released Tuesday, the S&P/Case-Shiller U.S. National Home Price Indices, showed a year-over-year gain of 5.4 percent in home prices in January.

“Home prices continue to climb at more than twice the rate of inflation,” David M. Blitzer, managing director and chairman of the Index Committee at S&P Dow Jones Indices, said in a release. “The low inventory of homes for sale — currently about a five-month supply — means that would-be sellers seeking to trade up are having a hard time finding a new, larger home.”

In St. Johns County, people seem to be finding homes quickly in a market that lacks a huge amount of inventory despite the heavy presence of new home building.

According to the local Multiple Listings Service information, for the first three months of 2015, there were 417 single-family homes sold, with an average sales price of $258,262. And it took an average of 136 days to sell each home.

This year, for the first three months, which aren’t quite complete, there were 411 single-family homes sold with an average sales price of $269,618. It took an average 103 days on the market for those to sell.

“Conclusion: Even though single-family homes sold are down by a few units for the first three months of the year compared to 2015, the average sales price increased by $11,000, and it has taken about 30 days less to get them under contract,” said Dirk Schroeder, broker/owner of Century 21 St. Augustine Properties. “That’s good news for home sellers.”

That’s not necessarily good news for buyers, especially first-time buyers who can’t use the equity from an existing home for a down payment on a different one.

However, Victor Raymos, AE/CEO of the St. Augustine and St. Johns County Board of Realtors, said many homebuilders are offering “affordable” models for less than $200,000. He added that interest rates and financing availability are favorable.

“All aspects of the market are being served,” Raymos said. “I think the difficulty in processing loan applications has eased up a little bit. People are finding it easier to go through the process.”

Blitzer, in the Case-Shiller report, said credit is still a problem for some potential buyers because many young workers are saddled with credit card and/or student loan debt.

“While rising home prices are certainly a factor deterring home purchases, individual financial positions are more important than local housing market conditions,” Blitzer said. “One hopeful sign is that the home ownership rate, at 63.7 percent in the 2015 fourth quarter, may be turning around. It is up slightly from 63.5 percent in the 2015 second quarter but far below the 2004 high of 69.1 percent.”

Raymos said he is clearly seeing “prices increase appreciably” in St. Augustine. He said the factors leading to the rise include low inventory, available financing and pent-up demand by consumers who might have been waiting to make sure the market is stable.

Busy homebuilders will alleviate the inventory problem to a degree, Raymos said, but they aren’t flooding the market. Raymos pointed out that builders don’t put up a lot of speculative houses, so most are simply built only as quickly as they’re selling.

“It’s going to help with the low inventory, (but) it won’t completely affect inventory,” he said. “The fact that the builders are building fast and furious is good for the market.”

There is no doubt builders are busy in St. Johns County.

Through Tuesday, the county building department reported a total of 775 permits processed this year for detached single-family homes. That puts the county on a pace for more than 3,000 new homes in 2016. In 2015, there were just more than 2,500 permits issued for detached single-family homes.

On the national level, Blitzer said the recovery of new home construction has lagged the gains seen in existing home sales.

“This may be starting to change: Starts of single family homes in February were the highest since November 2007,” he said. “The single-family-home share of total housing starts was 70 percent in February, up from a low of 57 percent in June 2015, and approaching the 75-80 percent range seen before the housing crisis.”

By STUART KORFHAGE   
stuart.korfhage@staugustine.com






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