QuoteJacksonville's economy is starting to generate jobs at a good clip again, but that hasn't translated to meaningfully better performance in the apartment sector. Jacksonville's apartment market remains lackluster by most metrics due to competition from single-family and from new apartment supply.
The Jacksonville apartment market added approximately 20,000 new jobs in the past year, expanding the employment pool by 3.3%. But while the jobs picture is looking better in Jacksonville, apartment fundamentals continue to struggle.
Occupancy levels have actually risen over the past couple of years, but still remained weak at 92.6% as of Q1 2014. This lackluster occupancy led to a limited year over year rent growth of 1.8%.
The major reason for the suppressed performance is the single-family market. In fact, Jacksonville's home ownership rate of 70% is one of the highest in the nation. Additionally, construction activity has increased in sub markets that generally outperform the metro averages and having a negative impact on market fundamentals.
Unfortunately, the next year isn't going to be any better for Jacksonville. The considerable supply set to finish in that time along with a general preference for single-family homes will continue to provide headwinds for the metro. Look for occupancy to remain weak and annual rent growth to remain around the 2% mark.
Amazing how high our home ownership percentage is. Should be a good thing, but stresses metro rentals.
Yea it's almost a universal law that job growth = rent growth & occupancy growth, of course the degree depending on other factors. Annual rent growth of 2% in these times is also just painful for owners. If that's true and we had all of these new national investors throwing money in our market to that kind of failure, we'll always be viewed pretty negatively, and that could really hurt chances of developing more housing downtown.
I think in a way, we need stellar performance from SS apartments to get more traction/attention on downtown. The SS is where folks have tested the market, and if it fails (that's where the jobs are), why would they throw money at downtown where the jobs aren't?
QuoteThe SS is where folks have tested the market, and if it fails (that's where the jobs are), why would they throw money at downtown where the jobs aren't?
Simms - That my friend, is the elephant in the room, for every downtown initiative. Jobs = money and you follow the money trail. So downtown has to get around that stigma and add more residents to lure employers downtown to create more jobs to fuel more money in the area, which then leads to more commercial.
^^^Residents downtown won't lead to jobs.
Cases in point:
Miami has tons of downtown residents and one of the smallest office submarkets for major cities in this country (really not much more office space than DT Jax).
Houston has virtually no residents downtown and has a huge downtown with hundreds of thousands of workers.
mtrain, seems to me the jobs you are talking about are street level retail, jobs that would be positively impacted by more residents downtown. Live streets might help bring some more office jobs downtown with a perception of better safety-security but by and large, those that work those jobs couldn't afford to live downtown.
Simms correct me if I'm wrong, but what Jax needs is some massive activity in a few downtown spots to jump start the city back on a growth path. The Laura Trio, Barnett Building, Deutsche Bank, Tennessee Bank, Shipyards, Berkman, reconstruction of The Landing and a new downtown convention center if played right could be the nuke this city needs. Add to our list of must-do's: fixed rail mass transit, a true and compact transportation center, actual improvements to the Springfield and other downtown area parks, infill or 'place-holding' parks north of the historic railroad terminal and actually maintaining our roads, sidewalks and properties.