Silver lining seen in prices

14 08 2008

The following article by Kevin Turner in The Florida Times-Union indicates a rebound in housing.

A UNF economist said a 1 percent jump in local inflation last month hides good news: It could mean a turnaround is coming to the city’s ailing housing market.

Jacksonville’s local consumer price index rose, after seasonal adjustments, by 1.01 percent in July, from 107.97 to 108.98. That brings the local inflation rate for 2008 to an above-normal 2.95 percent, said Paul Mason, an economist with the University of North Florida and coordinator of the Local Economic Indicators Project.

“What now appears to be a legitimate recovery in the housing market in Jacksonville fueled a large portion of the [inflationary] leap,” Mason said.

The July jump follows a modest June increase of 0.1 percent and declines in April and May, LEIP data indicates. Jacksonville’s normal inflation rate is from 1.5 to 2 percent, he said.

A measure of how much a property owner’s primary residence would cost to rent primarily drove the CPI increase, he said. It was led by increases in condominium prices, he said.

“Normally, a jump of inflation in that high an amount would be very disconcerting, but when the gist is a growing recovery in the housing market, it’s not as bad as it appears on the surface,” he said.

Ray Rodriguez, owner of the Real Estate Strategy Center of North Florida Inc., said Wednesday he thinks the condominium price increase could be coming from as few sources as one – such as leases converting to sales in the Peninsula building on the Southbank.

“If you have more expensive units being closed, that’s going to spike the price up,” he said.

Joe Farinacci, North Florida market manager for housing market research firm Metrostudy, said the increase could be the continuation of an ongoing trend. According to a Florida Association of Realtors study, the prices of condominiums in Jacksonville went up by 5 percent from June 2007 to June 2008, although 9 percent fewer units were sold during that time.

Other local price increases included personal care, up 8.9 percent; and clothing for women and girls, up 7.3 percent. Prices of meat, poultry and eggs dipped 5.5 percent; recreational product prices decreased 4.6 percent; and prices of new cars were down 4.2 percent, according to the report.

Jacksonville’s 2.95 percent inflation rate is still better for the first seven months of 2008 than the 5.5 percent estimated national rate through June, Mason said. The Bureau of Labor Statistics was scheduled to release the national CPI statistics for July today, according to its Web site.

Source: Florida Times-Union

%d bloggers like this: