Why There Might Only Be 5 Homes For You To Choose From in north Florida....
Despite what you hear on the news about the thousands that are out there
North Florida - I get it. You turn on the news or open the paper and all you hear about are the millions of homes on the market and the millions that are coming. This is perfect because YOU have decided that the time is right to listen to Buffet. When the blood is in the streets is when you should be buying (not during the euphoria 5 years ago). So everything is lining up perfect for you: Interest Rates are crazy low, prices are at steep discounts (and you're going to make an offer remember), and there are millions of homes/condos to choose from... So how in the world can you say that there is 5 to choose from (an exaggeration) but more realistically around say 20 or so?
Well lets start by talking about the pie. The millions you hear about are nationwide. Are you looking to live anywhere? Is Detroit in the cards? What about say Silicon Valley? Have you thought about the beauty and comfort of living in Wyoming? No? Alright well for this piece of the pie lets take N. Florida. Congratulations! You've decided to purchase a home in North Florida!!
Did you know that North Florida is Big. Big big... Not New York City, Tall big... but North Florida Wide big. Don't know what I am talking about? See this: http://en.wikipedia.org/wiki/North_Florida I live here and I can't believe how wide big north Florida is so lets just stick to some of the areas because you actually are going to live somewhere that has a job nearby for you and maybe the significant other or you simply want to live near civilization (let the emails begin).
So you and your significant other, over a Latte, pick Duval, Clay, Nassau, or St. Johns Counties as where you'll land. Well I can already tell you that we're no longer talking about millions of homes. We're talking about 'a lot' of homes... Thousands. Not millions but still so many that as of this point in the article you're going to get a mansion for next to nothing. Nice.
So lets talk about what type of financing you can do because thats going to tell you what kind of home you can look for. Let me explain it like this: If you're looking to do a VA loan (military) or FHA loan (3.5% down payment) and can qualify those lenders aren't going to give a loan for just any home on the block. Oh no, remember this home is collateral for the loan so its gotta be in fairly good shape so if you were thinking about buying a home that is a fixer upper that might get a little dicey and pricey in inspections on a home you eventually wont be able to close on. So for this example lets say you are looking for an FHA fixed rate 30 year mortgage. Great!
So that pulls out a lot of homes. A lot. Pretty much any home that is being sold "as-is" and needs a lot of work isn't going to work for you and if there is one big thing that hurts a lot of potential homes from making it onto your long list (we're not at the short one yet) is the roof. In Florida, you'd be shocked to hear that a 30 year or 20 year roof doesnt last 30 or 20 years. So homes built in the 80's and 90's might surely need a new roof if it wasn't redone and guess what, the shortsellers and the banks rarely put these on for you. FHA wont let you promise to do it when you move in so all of those homes are pretty much out. We're probably still in the thousands of homes though, so that's good.
So you determine that you're looking to live near civilization again and not be way out... you know, over there... you want to live over here. Ok. We can do that but now we're cutting out a lot of homes from contention. So no homes over there and it needs to be of fairly good quality. Ok. We're now talking about probably under a thousand homes...
So now you need a garage. Slice off some pie. You need a yard. Pie. You must have tile. Pie. Amenities in the community. Pie. 4 bedrooms. Pie. no less than 1600 square feet. X, Y, and Z of the things that are really important to you before you start compromising. All chopping that pie down to a pretty small menu and we havnt yet talked about affordability. Are you going to spend $900K, 750K, 450K, 200K.... Well under a certain price point you have more and more homes that wont get qualified by that lender's FHA appraisal so there's a floor you cant go under too because you really dont want a townhome...
So over $95K but under $200K... in the Southside or St. Johns County, with a garage and yard, solid flooring and we need to be in in say, 90 days. Well out with the shortsales (or most of them anyways). So now how many homes do you think are on the docket anymore? Well just taking the example above and not excluding towhomes and not checking out the yards youre under 40!! We havnt even begun looking yet and there are people in their home, with the Realtor doing the same calculations so its actually getting competitive as heck to get you the home you want becuase others want 'nice' things too.
Yes things slide up and down this wants and needs list and if you include shortsales in your search you can see the numbers rise dramatically but let your favorite Realtor tell you the road you step onto when you try to buy a shortsale just so your aware of what is coming.
Affordability changes. Sticker price is not the same thing as monthly payment and all of the other things you're being told. Some are right, some are wrong but one thing is true as far as I can tell. If you seriously are looking to take advantage of buying in this buyer's market you have to realize that the numbers you hear on the TV and the numbers you're looking at on the net are not the same numbers that involve you. Your wants. Your needs. Your timeframe. Your family. Real Estate is local and about location and that applies to you. Not Diana Olick on CNBC and not the person playing the same scenario out in Texas. You can buy a home and get a great deal today, no doubt however the days of 50% off are over and the misinformation that is out there stating that there are millions of homes on the market for you simply doesnt make sense. There's a home out there for everyone and you wont have to look at thousands to find it :)