Jackson MS Housing Trends

Jackson is the capital of Mississippi and takes a great pride in its traditional southern heritage. Jackson is one of the cities on the famed Mississippi Blues Trails, and the city’s slogan “Jackson, Mississippi: City with Soul” honors the many great jazz, blues, and gospel musicians who have called Jackson their home. Forbes magazine ranked Jackson the third best “Bang For Your Buck” out of the largest 100 metropolitan areas in the United States. Jackson MS real estate is affordable compared to the national average. Nearly 175,000 people live within the city of Jackson. There are many neighborhoods right outside the city limits, and 500,000 people reside in the entire Jackson metropolitan area.

Urban Sprawl and Revitalization Efforts

In the past thirty years, Jackson suffered the same fate as many large American cities. Rising taxes and crime pushed the upper classes out of the city limits into new suburban developments. Urban sprawl continued to grow, and as a result, most of the Jackson metropolitan area now lives outside the city limits. Price appreciation in these neighborhoods far outpaced growth in the city limits. Real estate and infrastructure in the city of Jackson fell into disrepair. 

Over the past few years, however, more than $1.2 billion has been spent on revitalizing downtown Jackson’s real estate and infrastructure. New construction and renovation of existing buildings downtown are succeeding in bringing business back to the central business district of downtown Jackson.  In addition, many young adults are choosing to move out of the suburban neighborhoods and back into the city. The area around the University of Mississippi Medical Center, Millsaps College, and Belhaven University is particularly popular with young adults. Made popular by the book and movie The Help, gentrification efforts in the historic Belhaven are have been particularly successful. 

Current Market Conditions

Real estate in the Jackson metropolitan area has experienced a slow recovery compared to many other areas of the country. Prices in the past year have just returned to their 2007-2008 levels. Median list prices are up 3.4% over the past year, but this is low compared to the national average of 7.5%. Total listings in the Jackson metropolitan area are up 8.4% from the previous year while listings are down 2.4% nationwide. While demand is steady, the Jackson housing market experienced a relatively low level of supply to meet that demand.

Market conditions, however, may vary substantially by neighborhood. The average list price within the city limits increased dramatically over the past year, but other suburban neighborhoods are struggling. The median list price in Madison increased a mere 1% last year while neighborhoods such as Flowood, Ridgeland, Canton, and Pearl all posted significant declines in list price.     

City of Jackson

Median List Price: $125,000
Annual Price Change: +21%

Within the city of Jackson, the housing market is improving. The median list price increased by 21% over the past year.  The number of foreclosures fell by half in 2015. Homes are on the market for an average of 121 days. Compared to the rest of the country, Jackson has a relatively high proportion of renters and a large number of vacant homes. Homeowners occupy only around 44% of homes in Jackson while 39% are rental properties. These numbers compare to over 57% homeowner occupied and 30% rental properties nationwide. Almost 17% of homes in Jackson are currently vacant.      

In addition, Jackson faces the same difficulties as many large cities in the midst of gentrification efforts. Crime rates are about double the national average for both violent crime and property crime. Large, expensive homes priced between $300,000 and $1.3 million are located doors down from dilapidated homes priced below $70,000. Enticing residents to relocate into the city is problematic and will continue to be a major challenge for government leaders.        

Outlook

As a whole, the country witnessed a large increase in home prices over the past year. Yet, Jackson did not experience that same level of growth. General housing markets around the country reported strong demand with relatively weak supply to meet that demand. Real estate trends in many cities resembled a tale of two markets within the same city. Prices for smaller, lower-priced homes increased at double-digit rates. Relatively low demand for higher priced homes resulted in declining prices within that segment. Many experts suggest that another real estate bubble may be in the works in some locations.

Real estate in Jackson is immune to the bubble concerns right now. Home prices in the entire Jackson metropolitan area increased far less than the national average during the last year. While list prices in the city of Jackson are up 21% over the previous year, prices in the rest of the metropolitan area are either declining or experiencing small gains. The housing market in Jackson continues to be driven by economic fundamentals such as interest rates, unemployment, and household income.

Those trends, however, do not point to improved market conditions in the city of Jackson. Rising interest rates will make housing more expensive and loan approval more difficult. Unemployment rates in Jackson are above the national average. In addition, the modest job growth experienced across the nation is not mirrored in Jackson, where there has been negative job growth.  Considering all of these factors on top of the challenges of high crime rates and gentrification, housing growth is expected to remain slow in the future.