Is it a bubble or is it because of supply and demand? Is it because of COVID, like almost everything different or difficult over the past year and a half, or is it just cyclical? Real estate agents and economists have their theories, but one thing is certain: Jacksonville has had the craziest housing market since 2008.
What does this mean for people who live or want to move into our historic neighborhoods? According to some local realtors, both historic and new home communities are selling well at the moment.
“We know a market of ‘super sellers’ in historic neighborhoods and new residential communities,” said Josh Cohen, chief broker of Berkshire Hathaway HomeServices Florida Network Realty. “In the Riverside, Avondale and Ortega markets, 26% of properties sold above asking price in March, and we expect a similar trend in April.” The cost of lumber and other materials and a backlog of supply chain continue to limit the construction of new homes and have dramatically increased costs, he noted.
The Jacksonville market appears to have performed slightly better during COVID than many of its domestic real estate counterparts, according to FortuneBuilders, a real estate education company founded by nationally recognized real estate investors. He reports that while the pandemic has served as a hindrance, Jacksonville appears in a position to return to pre-pandemic levels as soon as possible, which bodes well for everyone involved in the market: buyers, sellers and investors.
The Jacksonville Company Snapshot shows the median home value at $ 218,194 with a year-over-year appreciation rate of + 11.2% and a median rent price of $ 1,345. The foreclosure rate is 1 in 3,935, or 2.5 percent. The historic districts of Ortega, Ortega Forest and Ortega Terrace; St. Johns Avenue; Avondale; and Hendricks Avenue, San Jose Boulevard, and San Jose Forest are among the most expensive in Jacksonville, according to NeighborhoodScout.
Historic homes are currently less available than new homes, according to Sally Suslak, management broker at Traditions Realty LLC. “As a result, historic homes in our Riverside and Avondale neighborhoods sell for more per square foot than most new homes.”
A May 7 article in FloridaRealtors reported that the US real estate market is on the right track with double-digit annual home price gains, bidding wars and growing demand from buyers. The median selling price of a home is up $ 35,000 from a year ago, the fastest increase since 2006, as reported by Lawrence Yun, chief economist of the National Association of Realtors, in the article.
“Prices for new homes in development have increased by about $ 46,000 this year because the cost of raw materials needed to complete a home has skyrocketed, especially the price of lumber,” Suslak said of the market. Jacksonville real estate.
Rising prices coincide with increased interest in buying.
“We see everyone coming into the market,” Cohen said. “Many buyers are sellers who take advantage of the market, leverage equity and move forward. There is still a wave of buyers coming from other parts of the country deeply affected by the pandemic. “
According to Jeff Rohde of Roofstock, a national real estate investment market that focuses on real estate investing, more people are moving to Jacksonville for a more suburban lifestyle in a smaller, affordable market instead of a crowded city life in an expensive big city. The average value of single-family homes in Jacksonville rose more than 5.5% in September 2020 from a record high last year, while inventories for sale are down almost 42% from last year. previous year, as reported in the March Roofstock article.
The combination of rising prices, increased interest and a lack of supply is a challenge, especially for first-time homebuyers.
“They compete with cash buyers and investors for the same home, depending on the price point,” Suslak said. “In this market, good deals are rare.”
“The inventory we have is moving at the speed of light,” Cohen said. “Multiple offers are common. Buyers will forgo appraisal contingencies, and even lenders will for some loans. Buyers can also offer to pay sellers for deed stamps and title insurance. “
“If a property is competitively priced, it will sell within days,” Suslak said.
It is not uncommon for buyers to bid more than the asking price to get the home they want. “However, if financing is involved, the property must price the highest, and sometimes it is not.”
Buyers and sellers should approach home buying with caution in this volatile environment. Cohen and Suslak agree that sellers should be ready to get to a new destination in less than 30 days.
“Sellers can put their house up for sale and sell it over a weekend,” Suslak said. “In that case, they have to find a new place to live in a very tight market.”
“For buyers, the biggest challenge is finding a property that they really like,” she says. “If they’re not cash buyers, then they have to have their financing arranged in advance and then bid very quickly.”
In a seller’s market, some renovations may not be as necessary as in a buyer’s market, an important factor especially for those trying to sell an older home; However, local real estate agents agree that buyers today are looking for ready-to-move-in homes. Given the low interest rates, they are able to afford more expensive homes and are generally not interested in undertaking major renovations. A house, however, may have older kitchens and bathrooms and be considered ready to move in.
“Kitchen appliances and solid surface countertops are popular renovations that can update a kitchen without replacing all of the cabinetry,” said Suslak.
Suslak and Cohen again agreed that a new roof, new electrical and plumbing fixtures were on the list of the most important sellers should pay attention to.
“You might run into insurability and funding issues if these key components have significant wear and tear,” Cohen said.
“A seller doesn’t necessarily have to do a lot of renovations in today’s market, but should be upfront about what may be needed,” said Missy Cady-Kampmeyer, who owns and brokers Cady Realty. “However, shoppers need to understand that historic neighborhoods are not cookie-cutter areas. Homes have quirks, but the pros of having a well-built home right by the river and within walking distance of shops and restaurants outweigh the cons.
“People are buying a lifestyle, especially now after COVID,” she said. “Avondale, Riverside and Five Points are Walk Score areas where you never have to use a vehicle. They have a diverse culture and history, unique homes, the river, parks and racetracks, and yet they are very urban which attracts everyone to these neighborhoods and drives up the prices.
All this volatility is causing some buyers to fear that Jacksonville is in a bubble similar to that of 2006 and could burst with prices falling drastically. However, according to Morgan Stanley, as reported in the Florida Realtors article, it is not 2006. Home inventories are low, credit remains tight, and lenders are not issuing risky loans like they used to. ‘time.
Product risk – such as mortgages with introductory periods, teaser rates or skyrocketing payments – accounted for about 40% of the mortgage market between 2004 and 2006. These factors now represent only 2% of the mortgage market, according to Morgan Stanley.
“The housing market is based on price, location and type of property,” said Jeff Chefan, broker in the office of First Coast Sotheby’s International Realty in San Jose. He noted that inventories are down in most price points, with the exception of very high-end homes.
“What’s interesting are the percentage changes in the number of homes sold over the past 12 months compared to the previous 12 months,” he said. For example, homes selling between $ 200,000 and $ 399,000 rose 39% in San Marco, while they rose only 18% in Avondale. On the flip side, homes selling between $ 400,000 and $ 599,000 rose only 17% in the San Marco area, compared to 51% in Avondale, even though San Marco had more inventory at that level. price.
Homes selling between $ 800,000 and $ 2 million rose only 11% in San Marco, compared to 68% in Avondale. And homes priced at $ 2 Million + rose 166% in San Marco, but only 75% in Avondale, with San Marco again having more homes available in this lineup.
“2006 was the benchmark for high market value in Jacksonville,” Chefan said. “Along the river, we have fallen by 20 to 40% compared to 2006, while the prices of Ponte Vedra have increased by 30 to 40%.”
According to Chefan, this difference is mainly due to who is attracted to each of these fields.
“Riparian neighborhoods are usually the main resident markets,” he said. “In Ponte Vedra, many buyers come from elsewhere now that they can work remotely and want a second home on the beach. They are willing to pay more because they come from high priced markets and at the same time they find the houses in Ponte Vedra to be more advantageous than those in South Florida. “
So, is it time to sell or buy?
“Timing is a key economic driver when it comes to moving into real estate,” Cohen said. “It’s a great market for sellers. Qualifying buyers must purchase. Interest rates are still close to their historic lows. “
By Karen Rieley
News from the resident community