Best Jacksonville neighborhoods for investors

Florida draws more than 1,100 people a day, and those folks are not tourists. That’s a daily average of people moving there. 

Sure, many prefer the warmer weather, but the state also has a business-friendly environment and no income tax. Then there’s the fact that goods produced for export in the state are not subject to sales or use tax.

Jacksonville receives a disproportionate percentage of that population growth, coming in at #25 on The Street’s list of cities with the biggest influx of new residents in 2021. The lure is acknowledged in the national press: U.S. News & World Report ranked the city #22 in its 25 Best Places to Live in the U.S. in 2021-22. 

One major draw is the city’s affordability, both the cost of living and the city’s housing prices, which are still below the national average despite major growth in the last few years. 

It’s a hyper-competitive market these days, but investors are flocking in, placing it ahead of hot cities like Phoenix, Orlando and Tampa for the share of homes purchased by investors in 2021.

How to win at Jacksonville real estate

Because of its sheer size (the city is roughly 875 square miles, making it the country’s sixth-largest), varied geographical profile (including oceanfront, the St. Johns River, and inland areas), and multitude of districts and neighborhoods, investors need to do their homework. 

Three realtors and a real estate development executive offered a variety of tips.

Consider master-planned communities

Peter Ma, an executive vice president at England-Thims & Miller, Inc. who oversees land development projects in northeast Florida, points to established and up-and-coming master-planned communities as good bets. 

Ma says that Nocatee, in coveted St. Johns County, “is the first place I’d look … it’s going to hold its value for a very long time.” 

He also recommends Julington Creek, established in 1994, and the new developments of 7 Pines and eTown as planned communities that will appreciate in value, “especially when the 2nd and 3rd phases come online.” Ma also advises that, “if you can find anything out at the beach,” go for it. 

Ma said the standard advice for investors used to be to look south and east of the river.

“Now that out-of-state money is buying up a lot of that area for multi-family investment,” he said, “we’re seeing a lot of opportunity in Clay County,” which is on the city’s western flank. 

But, Ma cautioned, the largely working-class county was one of the first places in the city to show distress during the last great recession. (All figures from Realtor.com.)

Nocatee median listing price was $683,167 in March, up from $533,560 in March of 2021, or about 28 percent.

Nocatee median sale price was $669,000 in March, up from $515,041 in March of 2021, or almost 30 percent.

Julington Creek median listing price was $573,673 in March, up from $416,404 in March of 2021, or almost 38 percent.

Julington Creek median sale price was $547,250 in March, up from $397,000 in March of 2021, again almost 38 percent.

Be open to different areas

Lisa Pruitt, who has worked in real estate in the area since 1992, advises looking at the Northside area, which has “easy access to the airport and new Amazon hub. It’s growing but your price points are still reasonable.” 

Other places on her list include the West Side (“close to the naval base”), Jacksonville Beach (“good situation at a good price point”), and Ponte Vedra Beach (“for Airbnbs and short-term rentals.”) 

Pruitt also mentioned that she’s recently seen clauses in certain builders’ contracts stipulating that an investor can’t purchase a new unit until it’s been owned by on-site owners for a prescribed length of time, a phenomenon the New York Times cited in a recent story on real estate in Charlotte, North Carolina.

Find undiscovered areas where deals can be had

Pushpa Devi, a Jacksonville realtor for almost two decades, says there are still “little pockets of Jacksonville that are a good investment, because they aren’t quite as discovered as other areas.” 

She counts Arlington and Fort Caroline among those up-and-coming places, and notes that they are way more affordable than other parts of the city.

Be aware of the risks of Jacksonville’s location

Investors should be aware of the city’s flood risk, which the website Flood Factor (created by the nonprofit First Street Foundation) rates as moderate but increasing because of climate change. 

As an ABC TV affiliate reported, 29,000 properties had a 1 percent chance of being reached by floodwaters in 2020. By 2050, that number will rise to more than 47,000.

Since many areas are facing increased risks from rising, investors should weigh the pros and cons of investing in a flood zone and vet properties they are interested in; Flood Factor has a tool that can search homes by address to assess their flood risk. 

Flippers should look elsewhere

Wendy Griffis is a Better Homes & Gardens realtor in Jacksonville, and also an investor. Griffis cautions that those looking for property would be wise to seek long-term return on investment. 

“If your goal is cash flow,” Griffis says, “we’re quickly becoming a market where that’s getting harder to do. If you’re looking for appreciation, now is a great time to invest.” 

Griffis also encourages investors to adapt to the changing market, and get ready to bid over the listing price.

“Last year I was telling buyers to bid 5 percent over and we would get it,” she said. “Earlier this year I was saying 10 and was losing. Now I’m saying 15-20 percent. As a listing agent, I can see all the offers coming in and what it takes to win. In the last 30-60 days, 15 percent over is what it’s taking to win.”

In fact, Griffis says the conversation among realtors has shifted dramatically. 

“Realtors used to price too high, and it would finally sell,” she notes. “Now the conversation is, are we pricing it too low?”