INVESTING IN JACKSONVILLE

 INVESTING IN JACKSONVILLE

As the 12th most populous city in the United States, Jacksonville offers favorable conditions for making an attractive real estate investment. Two-thirds of residents rate their city as offering an "excellent" or "very good" living environment (source: Niche.com). This includes over 35 km of beaches, a warm tropical climate, more than 450 parks and green spaces... all of which contribute to Jacksonville's quality of life. In terms of demographics, economy, and employment, investing in Jacksonville is an opportunity worth serious consideration, especially given the favorable outlook for 2020 and beyond. Here's what you need to know if you're considering investing in Jacksonville.

Favorable population growth

Located between the Atlantic Ocean and the St. Johns River, Jacksonville is considered a major economic metropolis in the southeastern United States. The current population is approaching one million, with 978,507 residents at the beginning of 2020.

Over the past 10 years, Jacksonville has experienced strong population growth, the fifteenth-fastest in the United States, with an increase of 90,000 residents between April 2010 and July 2019. This growth follows a national trend. Indeed, across all regions, large cities in the southern United States with a population of 50,000 or more continue to grow at a faster rate than other cities (11.8% compared to an average of 9.1% elsewhere). Jacksonville's population growth, when considered solely in the southern United States, ranks second only to Austin, Texas.

Between 2017 and 2018, Jacksonville welcomed 12,000 new residents, and according to the University of Florida's Bureau of Economic and Business Research (BEBR), more than 800,000 new residents will move there over the next 10 years. The BEBR also estimates that Jacksonville's population could reach 2 million by 2045.

Focus on the job market in Jacksonville

According to Forbes, Jacksonville ranks 22nd in Florida for business and career opportunities. It ranks 26th in the United States for job growth. The city's policies are pro-business and pro-development. In addition, the economy is a major focus, central to efforts to create opportunities, build a workforce, and support small businesses.

Jacksonville's economy can be summed up in a few words: a GDP of $77 billion and growth of around 38% over the past ten years. While employment in the Jacksonville region averaged 1.7% growth, the city saw significantly higher growth, at 2.8% (source: Bureau of Labor Statistics). Unemployment, meanwhile, stands at 2.8%.

Jacksonville boasts a skilled technical workforce, and its universities award some 13,000 computer science degrees each year. Eighty-nine percent of residents have high school or college degrees, and 27.5 percent of residents are over the age of 25. The southeastern city is home to several prestigious universities, including the Mayo Clinic College of Medicine and Science, located on the Jacksonville University campus.

Invest in Jacksonville and capitalize on a thriving economy

Jacksonville is regularly cited as one of the favorite U.S. cities for companies looking to expand and relocate, particularly due to its position in both national and international markets. The Federal Reserve reports that over the past 12 months, Jacksonville's Economic Conditions Index has increased by more than 260%! Key drivers of the city's economy include logistics, banking, and, of course, the presence of one of the three Mayo Centers, world-renowned as some of the best healthcare facilities in the world.

Jacksonville-based CSX Corporation, Fidelity National Finance, Fidelity National Information Services, and Southeastern Grocers are among the Fortune 500 companies. Active employers include well-known companies such as Bank of America Merrill Lynch, JP Morgan Chase, Johnson & Johnson Vision Care, GATE Petroleum, and Miller Electric Company.

Among the growing sectors in Jacksonville are IT and technology, including software development, healthcare, logistics, e-commerce, and finance.

A city open to the international community

Jacksonville benefits from optimal transportation conditions and resources, which adds to its attractiveness for anyone looking to invest in Jacksonville.

Interstates I-10, I-75, and I-95 run through the city's metropolitan area. The city also has four port facilities, including JAXPORT, which serves dozens of ocean carriers, hundreds of trucking companies, and a freight rail service that transports millions of tons of goods annually to over 70 countries.

Jacksonville International Airport (JAX) is expanding, adding a third concourse to better serve the approximately 6 million passengers who pass through the airport each year on airlines such as Allegiant, American, Delta, JetBlue and United.

The Jacksonville Real Estate Market

In their report "  Emerging Trends in Real Estate 2020  ," PwC and the Urban Land Institute ranked Jacksonville 12th in terms of housing prospects. The city ranks 25th in the list of metro areas in terms of overall real estate prospects in the United States.

The median home value in Jacksonville is $180,600 (source: Zillow, October 2019). In the past 12 months, home values in Jacksonville have increased by 6.1%. Estimates indicate that they could increase by another 5.3% over the next 12 months.

The median sale price of a home in Jacksonville is $169,500, and on average, a property stays on the market for 69 days before finding a new owner. Nearly two out of 10 homes, when listed for sale, receive a price reduction during their time on the market.

 

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Real Estate Rentals in Jacksonville

Jacksonville's rental property market is no exception! 37% of Jacksonville's homes are occupied by renters. The average rent is $1,350 per month (slightly less than the Jacksonville metropolitan area, where it reaches $1,509). Over the past year, average rents have increased by 4%.

The table below summarizes the Jacksonville neighborhoods with the highest and lowest rents:

Jacksonville neighborhoods with the highest rents ($1381-$1491/month)

Jacksonville Neighborhoods with the Lowest Rents ($667/month)

Del Rio 29th & Chase

Greenland College Gardens

Mixon Town Edgewood Manor

 

Investing in Jacksonville requires careful study of price trends over the past few years. The FHA's second-quarter 2019 home price index indicates that home prices in the Jacksonville metropolitan area have increased nearly 225% since the first quarter of 1991. Over the past five years, home prices have increased by more than 49% and are up 2.91% from the previous quarter.

According to economic data publisher Kiplinger, Jacksonville home prices have declined 9.3% since the last housing market peak in May 2006. Moreover, since the last housing market trough in March 2012, they have increased by more than 74%.

Jacksonville's affordability index is 3 out of 10, meaning the metro area is one of the most affordable places to own a home in the United States.

Investing in Jacksonville: What's the outlook for 2020 and beyond?

An investor-friendly real estate market in Florida might seem like an impossible dream. In fact, according to HousingWire, Jacksonville is among the top 10 U.S. cities where home buyers are likely to find attractive prices.

The city's geographic location, business-friendly government, superb climate, affordable cost of living, and excellent quality of life make Jacksonville one of the most dynamic and progressive cities in the United States.

Looking at the outlook for the real estate market in 2020 and beyond, here are the key takeaways:

Economic dynamics continue

Through 2019, figures show continued economic growth, with a boom in development and city support for several projects. In total, five major projects were approved, totaling over $36 million in city and state funding in 2020. However, a $36 million agreement to encourage the development of the unfinished Berkman II was rejected.

The City of Jacksonville's contract pipeline for 2020 is robust, with a projected $230 million spend on the Shad Khan plan and $450 million for TIAA Bank Field's Lot J development.

Agreements in progress

Three financial companies were awarded incentive agreements in 2019:

The grand prize winner (Fidelity National Information Services, Inc – FIS ) was awarded $30 million to build a $145 million headquarters in Brooklyn (a neighborhood of Downtown Jacksonville). The global payments technology financial products and services company will receive a $23.4 million tax rebate grant, $3.5 million for completion from the city, and $3 million in tax rebates – $600,000 from the city and $2.4 million from the state. In exchange, FIS commits to building a 12-story, 100,000-square-foot headquarters, retaining more than 12,000 employees in Jacksonville, and providing 500 new positions over 10 years.

SoFi will receive $1.5 million, including $300,000 from the city. The company will hire 300 employees at an average salary of $54,000 by the end of 2021. The company also plans to invest $5.5 million to renovate its operations center in the southeast U.S. 

SS&C, the Jacksonville-based parent company of Black Diamond, will receive $990,000 in Qualified Target Industry tax rebates in exchange for hiring 198 employees at an average salary of $69,000 by the end of 2021. The city will pay $198,000 of that amount, with the state paying the remainder. SS&C will also invest $1.8 million in its facilities.

It's also worth noting a fourth agreement benefiting Florida Blue, reflecting the city of Jacksonville's support for cutting-edge economies. The American insurer is receiving a $3.2 million Brooklyn property for free and a $3.5 million completion grant for the construction of a $21 million parking garage. The agreement in question encourages Florida Blue to vacate the riverfront surface parking lot that will be the future headquarters of the FIS.

Investing in Jacksonville: an idea that appeals to you?