Driving the Housing Market

Ben Bates said he’s never seen anything like the current real estate market.

And he’s been in the real estate business for 46 years in Putnam County.

“It’s a big difference from what we saw in 2004, 2005 and 2006,” said Bates, who owns Coldwell Banker Ben Bates Inc. Realtors. “Then, a lot of the purchases made were on investments. But most of the buys today are going to be used by the consumer.

“And the other biggest thing is the interest rates. You can get a 30-year mortgage for less than 3%. So as long as the interest rates are low like they are, you’re able to buy so much more value.”

The median sales price of houses in Putnam County rose 20% from a year ago to $150,000, according to market statistics from the Northeast Florida Association of Realtors.

Bates is also encouraged the housing market is strong on the heels of the COVID-19 pandemic.

“A year ago, 15 months ago, we had no idea what it would be like,” Bates said. “We’ve been very fortunate, absolutely.

“The demand is still very strong. What’s happening is other areas are finding our county. We get a lot of our buyers from out of county.”

The association said robust buyer demand fueled by lower interest rates, historically low residential inventory and the continued desire of out-of-state residents to move to the Sunshine State has caused Northeast Florida housing prices to surge.

This is also reflected in the average price of a home in Putnam County, which increased to $168,546 in May 2021.

“The average sales price a year ago was roughly $138,000,” Bates said. “Now, it’s almost $170,000. Ours has gone up tremendously. And when you like at our median price, it’s gone up more than St. Johns County, percent-wise. It’s definitely showing our values are going up.”

Bates said new developments underway in Putnam will also make a difference in the market. Century Complete is the builder of the River Hill development in Welaka, where 66 single-family homes are planned starting from the high $100,000 price range. Welaka Mayor Jamie Watts said earlier this month 18 new homes are under construction at River Hill and building permits have been requested for 14 more.

“We’ve never had a big development done by a builder,” Bates said. “The first one is the one they are doing in the Welaka area now.”

Bates also said two new houses at Nobles Crossing in Francis were under contract before they were completed.

Bates said one key factor increasing Putnam housing demand is the improvements made in the Putnam County School District. The district has pushed graduation rates above 90% and they are just above the state average.

“People aren’t leery of our school system like they were five years ago,” Bates said. “We’ve just got to stay positive. We’re in the process of cranking back up our revitalization to move our county and city forward.”

Bates said one issue builders and consumers face is the increasing cost of construction materials and labor, along with supply chain challenges.

“I’m very concerned about inflation and the increasing prices of everything,” Bates said. “Look at what’s happened with our fuel; it’s gone up 30 to 40%. Grocery prices have gone out of sight.

“But I still think that Putnam County is being discovered. We have a lot of positive momentum and we’ve just got to keep that moving forward.”

Market data showed there was a 2.5-month inventory of available houses, 217 residential units, in Putnam County last month. That’s a decrease from 367 units available in May 2020.

In the $50,000 to $250,000 price range, the niche Putnam County’s low- to moderate-income buyers usually consider when shopping for a home according to the association, there is only a 1.6-month supply of residential units.

The median number of days on the market in May 2021 for Putnam County listings was 32, compared to 84 days in May of last year.

“The frenetic spring home-buying season for Northeast Florida continued through May, with 41% of closed sales receiving more than the original listing price,” said Missi Howell, president of the Northeast Florida Association of Realtors. Howell said that’s a 188.7% increase from a year ago, when the percentage was 14.2%.

In May, the average sales price throughout the Northeast Florida region jumped to $363,044, a 26.1% increase from May 2020 and up from April’s average of $357,438. The region’s median sales price increased 16.9% from a year ago to $290,000 and up from $284,941 in April.

The region’s highest home prices in May were in St. Johns County, where the median was $415,000. The median price in Duval County was $260,000, up 18% from a year ago.

Howell expects the trend of high demand and low inventory to continue for the foreseeable future. With the limited supply of existing homes for sale in the region, she hopes builders can provide “a much-needed boost of inventory to meet demand.”

“Realtors report that most listings are receiving double-digit multiple offers,” Howell said.

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