Jacksonville Florida Real Estate

March 2011 64% of Jacksonville FL Houses Sold Were Distressed Properties

  Distressed property sales, short sales and bank-owned property, continue to dominate the  Jacksonville FL real estate market.

The percentage of Jacksonville real estate market transactions that were distressed sales continued to increase from February (up from 62% of sales to 64% of non-builder sales) Other numbers show a worsening real estate market for Jacksonville home owners as well. 

In February the percentage of straight resales sold (non-distressed, non-builder) was 35% of the market.  In March this number dropped to less than a third of the Jacksonville real estate market sales at only 32% of all sales.

This is negative news for Jacksonville home sellers.  Home prices continue to decline with the high level of distressed properties on the market.  It is very important for the Jacksonville home seller to price their home correctly to have a shot of competing with the distressed properties. 

 Jacksonville home buyers are choosing price. 

 
While almost 60% of Jacksonville FL houses on the market today are straight resales (non-distressed, non-builder) that is not what is selling at a high level.  As evidenced by the statistics, Jacksonville home buyers are picking from a smaller pool of listings (short sales and bank-owned properties) to look for value. That is why we are seeing such a high level of short sales and bank-owned properties sold, because in general, they are priced at the low-end and represent the best values for Jacksonville home buyers.

Jacksonville Short Sales. Carrington Turned Down Short Sale, Home Now Listed as Jacksonville Foreclosure for 84% of Our Jacksonville Short Sale Contract Price!!!

ARE BANKS IN THE BUSINESS TO LOSE MONEY?  

Of course not!  Right?  Read on.... 

Jacksonville Short Sale Transaction Facts:

• Jacksonville Short Sale Contract Date - May 2009
• Contract Price for Short Sale - $237,500
• Appraised value of the home July 2009 - $240,000
• Carrington's Demand for Purchase Price on the Jacksonville Short Sale - $255,000 (!!!) Which they admitted was above fair market value.    SEE CARRINGTON'S REJECTION OF THE JACKSONVILLE SHORT SALE HERE.
• Buyer walked at the end of August 2009.


Servicer / Loan Originator / Investor Facts:

• Servicer - Carrington Mortgage Services (CMS)
• Original Loan Originator - New Century Mortgage (You can read about the lawsuits they disclosed to the SEC in 2007 here.)
• Investor Type : Mortgage Backed Security
• Investor's Trustee -  Wells Fargo
• Investor on Loan -  Carrington Mortgage Loan Trust, Series 2006-NC3 (no filings were found with the SEC since 2007 when they filed a Form 15 (under Rule 15d-6) representing they had fewer than 300 security holders of record) and the subsequently filed 10K.

House currently on the market as a Jacksonville foreclosure / Jacksonville REO for only $199,900.

 So not only have they lost almost two additional years of payments, but the bank/investor/trustee priced the home now that is an REO at only 78% of their above-fair-market value demand back in 2009.

Why?  Why turn away a ready, willing and able (and eager!!!) buyer to only hold onto an asset (in this case a home with a loan that had gone bad,  that they had to take back as an asset) in a declining market and lose an additional $40,000?  Is this in the best interest of the investors?   Insurance companies?  The sellers who are awesome people that were trying to do the right thing?  The taxpayers who keep throwing money at the banks through no decision of their own?

Are banks really in the business to lose money?  Why would they refuse a fair-market-value offer then wait two years to put the home on the market for approximately $40,000 LESS than what we had for them through our Jacksonville short sale?

This is not an uncommon event.  Who wins  when a Jacksonville short sale contract is rejected then the home goes back to the bank...then is listed for far less?

Jacksonville Real Estate: What Percentage of Asking Price Should I Offer On Jacksonville Foreclosures, Jacksonville Short Sales, Jacksonville Resales or Jacksonville New Homes

Here goes....

ASKING PRICE IS JUST NOISE.

Huh???

This is probably the most popular question we get regarding Jacksonville Florida real estate.  As a matter of fact we get tons of website visitors searching for the answer to this common question to apply to their offer to purchase.  The answer is, all the asking price should mean to you is it was an initial search parameter for you to see if you are interested or not.

So what matters?

What the Jacksonville home is worth.  The fair market value of the home is what you should be looking at.   If you are buying Jacksonville Real Estate, whether it is a Jacksonville Foreclosure, Jacksonville Short Sale, Jacksonville New Home or straight resale what you should be looking at is the value of the home in comparison to those that have recently sold.  Also look at what else is on the market.  Is there a similar home you could get for less?  Much less? 

The fact is, some asking prices are just ridiculous.  Sometimes they are ridiculously high, sometimes the asking price is ridiculously low.   Sometimes the asking prices of Jacksonville real estate are exactly where they should be.

I'll give you an extreme example:

• Let's say a home is priced at $500,000
• Recent Comparables suggest the home is only worth $350,000
• Do you really want to apply some formula of ___% of asking price that you saw in some book or your neighbor/son/uncle/etc. told you about?
• Or do you want to look at the value of the Jacksonville Real Estate in relation to what the home is worth?
• You WILL overpay if you make an offer in relation to asking price. (ie a certain percentage off of asking price)

Another example:

• Say there is a Jacksonville foreclosure / REO priced at $150,000
• Recent Comparables suggest the home is worth $200,000.
• Do you really think you are going to get the home if you offer some formula of ____% off of asking price...just so you feel like you get a good deal?
• In this scenario you could offer 125% of asking price and you would still get a pretty good deal...right?

If you are a Jacksonville buyer hoping to pick up a Jacksonville foreclosure or Jacksonville short sale this  is especially important.  In the Jacksonville foreclosure situation...there are many, many buyers hovering just waiting for that good deal to come up.  It is rare that we put in an offer on a Jacksonville foreclosure property that we don't find our buyer up against some multiple offer competition.  In a Jacksonville short sale, the bank is going to have either an appraisal or BPO that will give them a value of the property.  We are not seeing the banks let go of the properties in Jacksonville short sales for much, if anything, under what their belief is of fair market value.  (The bank's belief of fair market value of that short sale?  Another blog post for another day....)

If you are looking to buy a home in Jacksonville Florida...focus less on what asking price is and more on what you should be paying for the home based on what it is worth in today's real estate market, what your intentions are for the property (Long term?  Short term?) and how comfortable you are with potential future declines in the fair market value of the property. 

Want a Jacksonville Foreclosure? The Truth about Writing Offers on Jacksonville Foreclosures. Do You Want a Dose of Reality?

The Jacksonville foreclosure market is an interesting thing. 

Here is a general summary of the misconceptions we see from most hopeful buyers of Jacksonville foreclosures that we talk to or work with:

1)  The banks are desperate.  (No they aren't.  They know that there is no shortage of Jacksonville foreclosure buyers out there.)

2)  You can steal the property from the banks because they are desperate.  (Refer to #1)

3)  You can bid as low as you want on that Jacksonville foreclosure and the bank will counter. (No they won't.  They are likely sitting on multiple offers or will be if the property was already priced under market.)

4) My _____________ (aunt, neighbor, dad, psychic, magazine, etc...)  says it's a bad deal if you can't get it for  X% of asking price.  (This depends on the individual property and how the asking price relates to fair market value.  This is something we help you assess by running comps on the property to see what others have sold for recently and how the price compares.  You can NOT accurately assess a good or bad deal based on the percentage of purchase price to asking price...EVER.  )

From the standpoint of Jacksonville real estate agent experienced in helping Jacksonville buyers purchase foreclosures here is my summary of the Jacksonville foreclosure market as it relates to putting Jacksonville foreclosure offers:

1)  The asking price of Jacksonville foreclosures are already great deals.  Jacksonville foreclosures are usually priced less than fair market value.   Sometimes considerably less.  Sure there are a few exceptions to this, like with anything...but almost every foreclosure my team has set foot in with a buyer is priced really well already.  (There is a reason that Jacksonville foreclosures come on the market already priced under market value...but that is another post for another day....)

2)  The Jacksonville foreclosure market is hot!  The lower the price of the listing, the hotter the competition will be. 

3)  There are multiple offers.  No matter how many days the home has been on the market, almost 100% of the time we receive a message that there are multiple offers on the property.  Sometimes this statement defies reason but it doesn't mean that it's not so (spoken from experience!!!).  The listing agent will come back and ask you to submit your "highest and best."  Are there REALLY multiple offers on a property?  I mean really?  It's like how many licks to get to the center of that Tootsie Pop.  "The world will never know."  UNLESS you lose the property because you are outbid.  Then it's too late. 

4)  If you "really, really, really want" a particular Jacksonville foreclosure property you have to bid it to win it.  If you are willing to move on to the next you can take your chances.  It is unpredictable.  You can know what the property is worth and bid to the dollar exactly what it is worth and you may or may not get it. 

5)  You have to move fast.  If you want to put in an offer on that Jacksonville foreclosure you likely don't have time to think too long about it.  You need to have a take action attitude.  Do your homework in advance.  If you are going to hem and haw for days you risk losing the property.   We have Jacksonville buyers who are looking for foreclosures.  They have already decided exactly which communities they want to be in, what their exact price range is and what their offer parameters are.  This puts them in a much better position than a Jacksonville foreclosure buyer without goals and knowledge of the market.  When the Jacksonville foreclosure comes up that matches they are ready to put in an offer right away.

6)  The Jacksonville Real Estate Market may continue to go down.  Did a Jacksonville real estate agent really just say that?  Yes, yes I did.  We believe in complete honesty.  The truth is that when you buy, know your goals.  Do you plan on living in the home, or keeping it, for five years, ten years or more?  Are you planning to sell it after a year or so?  You have to be prepared to see home prices continue to drop even after you are sitting in your new home.  Does that mean you shouldn't buy now?  Absolutely not.  Prices are lower than they have been in years and interest rates are great.  This is a good combination.  It just means that you need to be realistic and understand that this is a very big possibility.  Make sure your short and long term goals line up with what we are likely to see.  It may be the best time ever for you to buy or it may be a horrible idea depending on your personal situation and your future plans.

January 7, 2009 Jacksonville Florida Real Estate Market Update

Currently we have 12.83 months on inventory for single family homes in the Jacksonville real estate market area.  We began 2008 with 10.66 months of inventory in the Jacksonville market.  The inventory went way up this past summer and fall...to a high of around 14 months, so the inventory has come back down.  Jacksonville Condos have an 18 month inventory currently.

In recent months we have seen some DRAMATIC price decreases in the Jacksonville market.  This has been due to the increase in foreclosures.  Banks have been creating new bottoms regularly and rapidly with foreclosures.  The percentage decrease has been remarkable in some neighborhoods.  Some neighborhoods are seeing home values around 50% of what they were selling for in 2006.  I am working on an analysis of a particular neighborhood so I can outline how it is unfolding to draw a picture for home buyers and home sellers.  I am amazed daily by prices homes are being listed for.

The banks bringing dramatic decreases to housing prices is just feeding the cycle.  When a bank does this, it makes it harder for their other homeowners with loans to sell their home when they need to.  Which forces a short sale.  If the short sale doesn't work out, then eventually it will lead to foreclosure.  This leads to further reductions in the price.  What I am observing is that the foreclosures that are coming on the market in the areas I follow closely are coming on dramatically under recent comps and current competition.  I have to ask, is this necessary to get the home sold?  The banks continue to complain about losses, however, does this behavior not magnify the losses? 

We deal with banks regularly with all of our short sales and we are amazed constantly by the decisions being made.  It's a great time to buy a home and take advantage of the lack of organization in the industry and get yourself a phenomenal deal before the before the problem begins to correct.

There are over 10,000 listings to chose from in the Jacksonville real estate market.  Here is the important part...2,645 of the 10,000 are distressed properties!  These Jacksonville Short Sales and Jacksonville Foreclosures are value priced and some are steals, listed at prices that we haven't seen in years and years.  It is such an exciting time to be a Jacksonville home buyer!

Now a few more Jacksonville real estate market stats for you:

• 54% of the Jacksonville real estate listings (non-condo) currently under contract are distressed properties!  This is where the market is.  Straight home sellers are generally unable or unwilling to compete with the incredible pricing on these things.  About 55% of these pending listings are Jacksonville short sales and 45% are Jacksonville foreclosures. 

• The Pending to Active ratio in the Jacksonville real estate market is 13.85% today for the overall market.  For the distressed properties, the pending to active ratio is almost 30%...a much healthier ratio than for the overall Jacksonville real estate market and much closer to a balanced market.

• 33% of the sales in the past 30 days in the Jacksonville Real Estate Market are short sales and foreclosures.

• 22% of Jacksonville real estate sales in the past year have been Jacksonville distressed properties--both short sales and foreclosures that have sold.  AT THE END OF 2007 THIS RATIO WAS ONLY 6%! 

• There have been 9,748 homes sold in the Jacksonville real estate market (non-condo) in the past year. Last year at this time we were at 12,664 sold in the prior year.  This same week in 2007 we were around 17,000 homes sold in the prior 12 months.  For the same period ended 1/07/2006 we were double what we are today.    This is a very positive number because it appears that this number has stabilized and is no longer decreasing.  It has remained stable throughout the summer and into the fall and winter.  This statistic indicates that It is highly possible that the Jacksonville real estate market has bottomed in the number of transactions closed.  A very positive statistic that I will continue to keep my eye on and keep you posted.

December 23, 2008 Jacksonville Real Estate Market Update

Things have slowed down a bit so close to Christmas.  We have the lowest inventory level since spring of 2007 when we were just one year into our Jacksonville real estate market downturn.  While we are down around 1500 units from the height of our  inventory levels since the downturn began, our inventory level is still almost double that of spring 2006 when the slide quietly began.

In the past month 635 single family and townhome units (non-condo) have sold.  Last year, for the same dates, this number was 855.  In the same time period in 2006 when most buyers, sellers, the media and agents had not caught on to the fact that we were in a downturn, the number was 1,258.  Not too far off of the almost 1,500 we saw at one point during the summer of 2006.

Jacksonville Florida real estate market inventory levels are at 13.64 based on sales over the past year, and 17.3 months based on sales over the past 30 days.

Our pending to active ratio is just over 14%.  A healthy, balanced market hovers around the "middle" with 50% being perfectly balanced.  A high number indicates a strong seller's market.  At our lowest, that number was around 10%, this occurred for about a four week stretch last December and early January.  We have not seen this ratio that low since then, for the past quarter we have seen this number hover around the 14%-16% range.

The big news is in Jacksonville short sales and Jacksonville foreclosures!  This week for the first time, we surpassed the 50% mark for pendings.  Currently, 51.5% of all homes (non-condo) under contract in Jacksonville are short sales and foreclosures!  It seems that our inventory and sales have steadied somewhat and the price is being driven down by Jacksonville short sales and Jacksonville foreclosures.  See our Jacksonville short sale blog for more information on short sales and foreclosures in the Jacksonville area.

Short Sales might be your best route to a great deal!

The horror stories surrounding short sales are rampant.

"You'll wait 4 months, then have to start over and find something else."

"Short sales never work."

"You shouldn't mess with short sales."

"Short Sales aren't good deals."

If you have heard any of the above "rumors" don't rely on them.  A lot of the negative press about short sales have originated because of a general lack of knowledge by real estate professionals and the public.  I think overall everyone is more educated now, however, a lot of the damage has been done.

If you are looking to get a good deal and have time on your hands to wait, you should not let anyone guide you away from pursuing a short sale opportunity.

The people who should not attempt to purchase a short sale:

• Buyers who have to be in something soon. (You should never expect a short sale to close in less than 6-8 weeks.  Sometimes longer.  If it is faster than that you will be very fortunate.)
• Buyers who lack commitment to see it through to the end. (Short Sales WILL take longer.  Everything is dependent upon that 3rd party approval which sometimes takes weeks.  Your life WILL be on hold. )
• Buyers who are looking for a steal. (Banks will not allow "steals")
• Buyers who are not totally qualified to purchase a home. (You are dealing with sellers who are usually facing foreclosure.  It is wrong to tie up their house while they head closer to foreclosure if you can not buy or will not commit 100% to waiting for the bank.)

If you have the patience to wait to get a good deal, then short sales are for you.  Be sure you work with a buyer's agent who is experienced and well versed in short sales or you could become part of a horror story.  Short sales are not easy.  However, for the buyer who sticks it out, you can get a really good deal.  If you are interested in purchasing a short sale property, we can help!

Popular Short Sale Myth #1 in the Jacksonville Real Estate Market

   

We are short sale specialists and get quite a few calls on our Jacksonville and St Augustine short sale property listings asking us what the bank will take. Until we have an offer, we do not know what the bank will take if it is less than what is owed on the home. Any home going on the market should initially be priced at fair market value. In a short sale this is done regardless of what is owed on the property. It's not in the bank's best interest to take the home back if they can get a good fair offer from a qualified buyer.

   

What the bank will take depends on where fair market value is for the home at the time the offer comes in. The bank is going to want to get as much as possible from the property and as close to fair market value as possible. The correct strategy is not to submit the offer at a price that is a "steal" for the buyer. The bank has already lost out, and to get approval on a short sale you need to offer the lowest possible price that the bank can't refuse.

   

If you are interested in purchasing a short sale home in northeast Florida, the first thing you need to do is hire a GREAT Jacksonville/ St Augustine area real estate agent trained extensively in short sales. A properly trained short sale expert can save you a great deal of hassle, although no one can eliminate all of the hassle. It's the nature of short sales.

   

If you are interested in selling a home and you owe more than the home is worth, don't even consider using someone who does not have highly specialized training in short sales. The short sale process is a very detailed, complicated process that should only be trusted to an expert in the area of short sales.

When you are trying to sell your home do you hang around for buyer showings?

I am showing Joe and Mary homes for sale in Jacksonville.  We have been out to look at homes a couple of days now.  Because I really tune in to what they like and don't, on this trip I have picked out a few homes that I think have great possibility.  I make the showing appointments and pick up the buyers.  We go to the number one home on my list.  It has everything they said they wanted and the pictures of the home were fabulous.  We get to the house and I ring the doorbell and go to unlock the lockbox key safe.  Five seconds later Mrs. Seller opens the door and welcomes us!  She starts to chatter about the features of the home and how much she loves the home.  She stays for the entire time of our showing.

What kind of impression do you think the buyer has of the home?  At this point it does not matter how incredible your home may be.  The buyers will not take the time to look at the home and truly consider it. 

If you are selling your home in the Jacksonville real estate market, it is very important that the home shows correctly.  Inventory is very high and if the buyers do not feel a connection to your home there are many, many other homes to chose from.

The first rule for home showings is that buyers have to be able to walk into your home and feel like the home could be theirs.  They will not be able to do this if you are walking around the home or, even worse, following them around.  If the buyer does not feel comfortable in your home they will not like your home.  While buyers come to us every day saying that their #1 priority is a great deal...when it really comes down to it (unless they are investors) emotions play the #1 rule.  I have seen very strong personalities turn to mush the second they walked into that home with the two-story family room when their old home had eight foot ceilings.

The buyers being able to be comfortable in your home includes having the home in great shape.  If the buyer can walk in the door and feel like they could just show up with their suitcase and move in, you have achieved this.  This means minimizing personal items.  For example, when we are selling one of our personal homes, we always pack away any pictures no matter how cute the little dumplings are!  Buyers need to be able to mentally come in and throw their pictures up on that mantle that you have cleared away for just that purpose.  Hide all of your personal items away.  If you wouldn't see it when you walked into a vacation rental or a hotel suite or a model home...don't let it be present in your own home.  You are creating a feeling...an emotion.  And emotions are stronger than logic with all but a few home buyers.  This includes your makeup, toys, drawings, junk on your refrigerator, and yes...even your underwear.

Competitive pricing, along with great videos and pictures, will get the buyers into your Jacksonville home that is for sale.  At that point it becomes your responsibility to allow the buyers to feel like the home could or should be theirs!  This is not something your real estate agent can achieve.  This is something that only you can do...so do it well!  Best of luck!  :-)  

Inventory Levels around Jacksonville...the "Good"

Currently things seem to be hanging in there.  No dramatic decreases, no real increases.  Mandarin real estate and Southside real estate are two of the "healthiest" (it's all relative, right?) areas right now.  They've managed to sink their toes in a little better in the "how low can they go" game of market results.  Currently Mandarin is almost at 18% for a pending-to-active ratio.  Southside is a tad over 15%.  In the inventory category Mandarin has a little below 9.5 months of inventory.  So if no other house went on the market in Mandarin, the existing inventory would take almost 10 months to sell.  Southside has between 8.5 and 9 months of inventory.  To help you compare, last year during the same week, Southside had roughly five months of inventory and a pending-to-active ratio of 30%.  Mandarin for the same period had a little over 5 months of inventory and a 25% ratio.  So the numbers are dramatically lower than a year ago.  In a nice balanced market the ratio we should see is around 50%.  This is the "Good".

It's Blissful to be a Buyer

The stage is set for happy homebuyers in Jacksonville...and what a great time they are having.  Inventory is high and motivation is low.  Jacksonville buyers know that they have their pick and they can take their time.  With the homes-under-contract to homes-for-sale ratio hovering around 15% for the Jacksonville Florida area, many buyers are content simply playing the waiting game.   With the current market conditions and interest rates, it is more important than ever for sellers to price their home correctly.  With the current inventory level in the Jacksonville area, the biggest challenge a seller faces is how to get buyers in the door.  If a home is overpriced even a smidgen...internet-savvy, bargain-hunting buyers will do nothing more than wave at it on the way to the value priced home down the street.