The Jacksonville Florida Housing Market is a Tale of Two Markets
...At least in this guy's opinion
Jacksonville, FL - I am meeting so many buyers that are calling and visiting that still have the mentality that they're going to be able to buy a property, a really really nice property, for say..... 50% off the list price. When I tell them that those days may be in the rear view mirror they look at me like I am simply the typical "salesman". Then, inevitably, they make offers on the home they, "Love" as I heard them say, and they offer something far less than I'm showing them to be comparable to the marketplace and inevitably they scoff at the counteroffer and walk... to wait, I presume.
Well, I'll have you know, that I can probably get you a home at 50% off. Yes, I can! See if the home is listed for $40K there is a possibility that it'll go for half that. Mind you, it's not going to pass inspections to get an FHA or VA loan. So you'll need to get a conventional loan. Whoops, lenders generally don't offer loans for that minute an amount so now its cash. This is great! If you're an investor and looking to rehab it and re-sell it. I can help you with that too but thats not the point of this diatribe. Im trying to speak frankly.
Yes. There is a possibility that the market is headed for a double dip and the prices will drop further. That you'll see homes sitting that no one will bid on and the sellers will drop the prices. I, however, am not seeing your nice home, you know, the one on the golf course, or on water listed at $700K going for $350K. That is NOT REALITY. If I had a crystal ball I would've bid 50% off on a home a year ago... not near the bottom where it won't get me a home at all. Unfortunately, I don't AND I would've had to convince the seller that my crystal ball tells the truth and the offer I'm offering in 2009 is the best offer they may see in a long long time. Well... my crystal ball is broken.
What I do know is that it is unlikely that interest rates are going to be this low forever. I also know that prices likely won't fall another 50% from here. So while we bounce along the bottom here and you wonder if its the right time to buy and only look at the price of the 2 or 3 homes you're looking to buy with a mortgage you need to also consider what the other variables might do.
So what are the 2 markets (and there are likely more but Ill focus on...)? First, there are the homes that cannot pass inspections, are in areas that are surrounded by homes that also cant pass inspections and need cash to be put into them to be livable. Those homes are trudging along being snagged up by your remodelers or I know that there are a few lenders out there offering piggyback mortgages for fixing up some things but these homes, generally, don't give the lookers the warm and fuzzies. The second market, the one in which you likely will "Fall in love with a home", is made up of homes likely at the top of your price range and likely will pass all inspections. I know I know, these homes are really more than you thought you'd have to spend and you want it for half that price. Ok, so here is what is going to happen...
Make your offer, the one you're comfortable with, and the home you like is likely liked by others... you didn't find a hidden gem.
Your seller will pick a higher offer and you'll be mad and frustrated and angry and you might even say that North Florida isn't the place where you'll find that hidden Taj Mahal that no one knows about.
You'll vacillate between emotions and blame your Realtor, blame the seller, blame the market, blame Obama, blame the banks, blame anyone.
Here's the deal though... Your Realtor isn't lying to you more than likely. He or she, when showing you the comps and data and talking about the market, likely isn't spending the time to edit all the data in the MLS to try to get you to bid $5K more than you want to because they want to make an extra $150. It is what it is. On your next home, you'll bid a little bit more and might get it might not but after swinging and missing twice you'll realize that it wasn't that you're making a mistake by buying a home right now... its that you're buying a home because you want to own a piece of the pie, you too think the market is near the bottom, you want to be able to send your kids to that school, you want to garden, you want to change the dining room fixture, you want to get to know your neighbor, you want to know that the mortgage is being paid and you don't want to be at a landlord's mercy. Whether or not you get the home for an extra sliver off the price shouldn't be the only thing that matters. The stuff in the nicer market can be had and can be had by you and it could be a good investment but the firesale, for now, is over, in this man's opinion.