The Jacksonville
area is one of the most affordable areas in the United States to buy
a house, based on data from economists, Realtors and home builders
who track affordable cities.
There are different formulas for determining affordability, but
each is based on home prices and wages.
"In Jacksonville, the typical household that earns the median
income can buy a house that is 72 percent higher than the area's
median sales price," said Brian Nottage, an economist at
Economy.com, an economic consulting company in West Chester, Pa.
In the Jacksonville area, the median household income is $55,600.
The median sales price for an existing house is about $111,000,
according to statistics provided by Economy.com. In Miami it's
$173,390; in Orlando, $127,930; and in Tampa, $132,310. When new and
existing house prices are combined, the median sales price in
Jacksonville is $128,000. Median represents the middle price in a
series of numbers and gives the most accurate assessment of the
housing market because of the range of home sales prices. The same
theory is applied to median income.
Affordable houses are important because the largest segment of
home buyers, those with moderate income, want them. And home
builders have their sights set on building those kind of houses.
The reason for the area's affordability is the abundance of land
on which to build new houses and a stable employment base that does
not rely heavily on tourism, as do cities like Orlando and Miami,
say economists. A downturn in tourism after Sept. 11 caused many
tourism-based businesses to reduce staff.
The availability of new houses keeps existing home prices
reasonable because buyers can choose from a larger supply. That is
not the case in large metropolitan areas where there is a lack of
available land or high land costs. In such a scenario, potential
home buyers can only hunt for existing houses, which allows sellers
to increase their asking prices above what they would if buyers had
new houses to choose.
In theJacksonville area's favor, wages are relatively low
compared to other cities, which also helps keep prices low. The
area's diverse economy features Mayport and Jacksonville Naval Air
Stations, hospitals, private-sector companies, such as Citibank that
employs about 4,000 workers, Bank of America's regional headquarters
that employs 4,800 workers and a host of call centers.
"The Jacksonville area remains well diversified," said Lynn
Reaser, chief economist at Banc of America Capital Markets in St.
Louis.
Reaser said the area's housing market does not heavily rely on
snowbirds, the Northerners and Midwesterners who mostly live part
time in South Florida and southwest Florida cities.
"That has helped keep the price of housing from rising as much.
You don't have that demand feeding from afar. Most of the demand is
driven by people who live and work in Jacksonville year round."
Stable environment
And that describes David and Tammy Dollarhide, who are expected
to move into their first house in Orange Park in August. At
$108,000, the Dollarhides' 18-year-old house is near the median
sales price.
"It was the right price for us given the debt that we have," said
David Dollarhide, who grew up in Orange Park. He said they felt that
the quality of construction was better than some of the new houses
that are being built. Dollarhide said the couple might keep the
1,560-square-foot house and rent it out, if they and their
4-year-old son, David III, ever move to another house.
Opting for a new house were Brian and Gina Richardson, who live
in Northwood at Water Mill, a new residential development in the
Argyle area. In February, the couple bought their $126,035,
1,650-square-foot house. David is a plant manager at Granger Lumber,
located on the Westside. Tammy works in accounts payable at
Insituform Technologies Inc. in Mandarin. The couple chose that area
because it is close to their jobs. And they will rent out Brian's
old house in Ortega.
"I looked everywhere and decided to stay on this side of town
because it is close to work for us," said Brian Richardson.
The Argyle area is popular with home builders because the
availability of land allows them to build affordable houses.
A building attraction
Developers and home builders do not face the restrictive
concurrency and regulatory challenges that thwart home building in
other parts of the state, said Jeff Agar, division manager for
Ryland Homes Northeast Florida. Agar, who formerly worked for
Morrison Homes in Jacksonville, said the opportunity to build
affordable houses is the reason Ryland decided to enter the
Jacksonville housing market.
The company is under contract to buy land for seven communities
where houses will be built in Clay, western and eastern Duval and
northern St. Johns counties.
Agar said the company will start building houses in October that
will be priced from $127,000 to $270,000. He said Ryland has about
450 home sites under contract and expects to build houses on 250 of
those sites.
Mercedes Homes Inc. is another builder that sees an opportunity
to build affordable houses.
Next month, the company is expected to start building Valley
West, a 40-unit single-family subdivision on Herlong Road.
"It is kind of exciting because there is a need for more
affordable housing in Jacksonville," said Donna Sadowski, vice
president of sales at Mercedes.
Sadowski said the company is able to keep down prices because it
is building on land the company bought five years ago. "Since that
time, land prices have gone up," she said.
As an example of the difference in home prices in Jacksonville
compared with other cities, Mercedes' three-bedroom, two bathroom
house is priced at $123,500; in Orlando, the same floor plan is
priced at $158,000; and in Tampa, where Mercedes builds the same
plan, it is priced at $159,900.
Beazer Homes Jacksonville, a division of Atlanta-based Beazer
Homes USA, is building affordable houses ranging from $125,400 to
$200,000 in a Northside communityacross the street from First Coast
High School on Starratt Road.
"In other areas, the land prices have pushed up, and you have to
build multi-family product," said Bill Mazar, division president at
Beazer Homes Jacksonville.
Mazar, who is a board member of the Northeast Florida Builders
Association, said the company has other developments, including one
off of Normandy Boulevard that will be priced from $116,000 to
$160,000.
"We find that area as an attractive area for affordable houses,"
he said. "It has been unaddressed in Jacksonville."
Staff writer Earl Daniels can be reached at
or via e-mail at edaniels
jacksonville.com.
