According to the September On Numbers Economic Index as related by the Jacksonville Business Journal, the Jacksonville area economy ranked 99th among 102 U.S. metro area economies surveyed, making it “one of the weakest in the nation.” Plummeting job growth numbers and “the dramatic fall in housing values” brought on by the recession, followed by weak recovery trends, contributed to Jacksonville’s low standing.
Jacksonville Commercial Real Estate Economy Overview
“[T]hat trend may be turning,” however, according to the Journal. The turn is not surprising. While Jacksonville was held captive by the same housing debacle seen statewide, its economy otherwise confirms less closely to the Florida mold. Significant banking, distribution, and health care sectors provide for unusually favorable diversification relative to the state generally. And tourism, while a significant factor, is less prominent in the overall picture. Expansion of port facilities and expectations of the augmentation of trade flows through the port as a result of the expansion of the Panama Canal, scheduled to complete in 2014, are bright spots on the horizon.
For the moment, however, recovery and job growth proceed slowly. According to the latest data from the U.S. Bureau of Labor Statistics (BLS), non-farm employment in the Jacksonville Metropolitan Statistical Area (MSA) as of July was up just 1,800 jobs (0.3%) from July 2011 and was up only 5,800 jobs (1.0%) over two years. Moreover, the slowdown apparent over the latest 12-month span by itself is not encouraging. A mixed performance, on the other hand, includes favorable growth in the Professional and Business Services sector of 1,800 jobs (2.0%) over 12 months and growth at 6,900 jobs (8.1%) over 24. Accordingly, the overall slowdown has much to do with the slowdown in this sector—along with a simultaneous decline in the Leisure and Hospitality segment. Following no net gains over the previous 12-month span, meanwhile, the Trade, Transportation, and Utilities sector grew by 2,700 jobs (2.2%) over the latest July-to-July span. Like the Government segment but more extremely so, construction, a chief casualty of the recession and the housing fiasco, continues to shed jobs. Employment therein as of July 2012 was down 1,200 jobs (4.6%) from a year earlier and was down fully 25,200 jobs (50.1%) since July 2006. There may be new hope for construction, however, in the form of increased residential construction permit totals.
Jacksonville Housing Market Overview
The housing market, meanwhile, shows some recent improvement. “The residential real estate picture in Jacksonville got a little bit better in Corelogic’s second quarter negative equity analysis, but it still isn’t very pretty,” the Journal reported in September. Thus, while 43.4% of all residential properties, nearly twice the national rate, were “underwater” as of the second quarter, improvement was apparent from first quarter’s 45.1%. According to Northeast Florida Association of Realtors as reported by the Journal in August, moreover, the $140,000 median home price, while still well below pre-recession prices, was up nearly 8% in July. Foreclosure activity, on the other hand, has increased. According to RealtyTrac, the Journal reported in September, metro Jacksonville saw a 29.24% increase in foreclosure filings in August year-over-year, nearly twice the rate of increase reported for Florida as a whole. Indeed, among more than 200 metro areas covered by RealtyTrac, Jacksonville ranked 16th in rate of foreclosure that month, as one in every 299 residences received notification.