Jacksonville Real Estate Market Information

The changes to the HUD rules for FHA mortgage short sales supersede the prior rules of the Pre-Foreclosure Sale Program.

The ratio of sales price to fair market value has gone up!  Previously the sales price had to net 82% (after closing costs) of fair market value of the home.  Now the ratios have gone up to 88%, 86% and 84% of fair market value.  (This is okay if the appraisal is realistic, but since many come in high, the extra 2% was helpful)  The ratio used depends on the amount of time the home has been on the market.  Here is the way the tiered system works:

They have defined what allowable closing costs are that go against the proceeds to arrive at a net proceed amount.  

Closing costs items specifically NOT allowed to be charged to the seller's side are:

• Repair Reimbursements or Allowances
• Home Warranty Fees
• Lender's Title Insurance Fee 

• Discount points or loan fees for non-FHA financing  (They WILL now allow up to 1% of the buyer's loan amount in closing costs to the seller's side ONLY IF the buyer is buying the home with a new FHA-insured mortgage)

For agents that are familiar with FHA short sales, they have eliminated the 63% for fair market value to outstanding mortgage balance (including unpaid principal and accrued interest).  With the declining market, this change is a very favorable change because previously this 63% requirement could create problems.

The new guidelines specifically state that if the Pre-Foreclosure sale is unsuccessful, after a homeowner participates in good faith, and the home ultimately forecloses, neither HUD nor the lender will be pursued for deficiency judgments.  It also states that a pre-foreclosure sale has to be reported to the national credit bureaus as a "Short Sale."

There are many other guidelines that are outlined in this 18 page lender letter, but these are the important changes that relate to how a short sale offer must be written by the buyer's agent (or negotiated to this point by the knowledgeable seller's agent) to qualify.  It is pointless to submit an offer on a short sale property when it is a FHA loan if the offer does not meet this basic criteria.  Another reason to make sure your agent completely understands the short sale process.  Whether you are buying or selling a short sale property, you should make sure your agent is a trained specialist and thoroughly understands the process to save yourself months of frustration and the increased likelihood that the short sale will be unsuccessful.

CNBC just ran a small story about how Fannie Mae is testing short sales of homes.  They were reporting that this keeps lenders from having to take the home back and finds a new buyer for the home.  They reported that the average short sale results in losses of around 19% to the lender while an average foreclosure results in a loss of around 40%.

This is what we have been tellng our Jacksonville Short Sale buyers and Jacksonville Short Sale sellers.  Jacksonville Short sales are truly a win-win for every party involved, the buyer, seller and the lender.  So with this being the case, the question is why are some lenders still so slow to process and approve short sales?  Many lenders are doing much better at this.  The ones that aren't really need to streamline their process to allow for faster approval and closings since waiting for approval is what turns off many buyers currently.  Why not get the process down to under a month from start to finish?  Let buyers and sellers close with a timeframe that closely mimics a traditional or a foreclosure sale.  Rumors about the impossibility of short sales are rampant.  While short sales are not at all impossible...the actions and performance, or lack therof, of banks are why these rumors got started in the first place.

Banks need to sharpen it up.  Why aren't they being held accountable for increasing profits and reducing losses?  The fact is that if a home is sold in a short sale it never has to go on the banks books and the bank mitigated their loss.  It escapes me why the investors who sometimes hold these loans in pieces do not pressure the banks to move FAST on these things.

Why are the investors and stockholders standing by and allowing banks to sit on short sales, lose buyers who are willing to pay around fair market value, then foreclose on the house later...which adds significantly to the loss?  They then end up selling it later for lower than the short sale price multiplying losses! This is what is happening when banks don't approve good fair short sale deals.  You don't fix bad decisions with more bad decisions.  They need to be held accountable for knowingly making decisions that increase the losses to the bank.

Even if the buyer is patient, if you have an especially slow bank who sits on the file and does not accept it for 2-3 months, in a declining market, many times the market value of the home has fallen enough to make the deal ABOVE market forcing buyers to walk away rather than closing on a home that already has a built in loss of equity.

Worse is the second mortgage holder.  Sometimes this is a straight second mortgage, sometimes a HELOC.  In this market many of these loanholders will never see a penny if the home is foreclosed on.  Yet some of these banks either refuse to accept the short sale, demand a large payoff that is out of the realm of possibility in the deal (and the seller obviously doesn't have it or they would be making their payment), or insert crazy terms or conditions that wreck or threaten to wreck the deal.   This type of behavior by certain banks is what gives the short sale a bad reputation.

Jacksonville short sales are great deals!  While not all Jacksonville Short Sale transactions will be successful, most Jacksonville short sales will be successful when done correctly.  Following the correct procedure is a crucial component.  We can help whether you are a Jacksonville short sale buyer or are a Jacksonville homeowner who is upside down on your home but need to sell.

Today Jacksonville distressed properties (Jacksonville Short Sales and Jacksonville Foreclosures) represent almost 55% of all Jacksonville homes for sale that are under contract.  Only 45% of pending homes are straight resales.

Over 25% of homes on the Jacksonville real estate market are short sales or foreclosures.  This number continues to rise weekly, sometimes daily.  Between 32-33% of the homes sold in the past 30 days have been Jacksonville short sales or Jacksonville foreclosures.  Of this number 37% were short sales. 

Jacksonville short sales can be successful  (no matter what you hear!) and can be a great deal for buyers!  Hire an agent who knows and understands how to successfully complete a Jacksonville short sale.

Jacksonville short sales are much, much harder for the agent.  It is a lot more work for what is usually less pay.  A multitude of obstacles can and will come up in a Jacksonville short sale transaction.  Every day is a new challenge.  Agents have to be on top of things, sharp and able to think outside the box to increase the closing rate of Jacksonville short sales.  Agents who are able to maneuver the challenges are very successful in closing Jacksonville short sale transactions. 

If you are a buyer, you have to consider Jacksonville short sales these days if you don't want to overpay for your home.  We can help you with a Jacksonville short sale transaction.  We think they are great...and such a win-win...for both the buyer or the seller.  Are they all successful?  Of course not.  But no transaction is bulletproof in these volatile times.  Let us get started helping you today!

The overall Jacksonville real estate market has a pending to active ratio of only 13.82%.  Jacksonville distressed properties have a pending to active ratio of just under 30%!  This is proof that this is generally where the deals are for buyers.  What are you waiting for?  Contact us today to see the Jacksonville Short Sale and Jacksonville Foreclosure opportunities that are waiting for you.

Today a buyer for one of our Jacksonville short sale properties just "changed their mind."  There was no contractual reason, so the buyer will lose their binder deposit that was put down at the time of the contract.  But that doesn't make up for the fact that the sellers have lost a month of marketing time and are a month closer to foreclosure.

Jacksonville short sales are serious business.  A Jacksonville short sale buyer needs to understand the importance of being serious when they put down a short sale offer.  I've heard some agents joke that since short sales take so long, they just get their buyers into several contracts.  Kind of like throwing darts and seeing if one sticks.  This is entirely unacceptable and this practice needs to stop.

When you put down an offer on a short sale and it is accepted, the status in the MLS has to be changed to "Contingent" or "Pending."  This turns away other buyers.  Why would you want to see a home already under contract when there is plenty of inventory to chose from, right?

Once the home goes under contract, buyers quit coming.  You have effectively taken the home off of the market.  The short sale package is submitted and the listing agent begins to work with the bank to negotiate the short sale.  This is very detailed and time consuming work, and a great deal of effort, and number of hours,  is put into this by the listing agent.  Depending on the bank the answer can come back in a week, or it could be a couple of months.  This can not be controlled by the listing agent, but the wait can be minimized by a knowledgeable listing agent correctly and completely putting the Jacksonville short sale package together and submitting it promptly to the bank.

In the mean time the home moves closer to foreclosure.  The payments are usually still not being made.  Every day is another day that the seller is late.

So when the buyer "changes their mind" the seller does not get any of this time back.  They are unquestionably harmed by this behavior.  This is especially true if the educated and knowledgeable listing agent made sure the offer was at a price that would be acceptable by the bank and the package was correctly submitted.  These Jacksonville short sales are usually approved.  So what has happened is that the buyer walks away from an offer that would have been accepted by the bank.  When the contract falls through the bank usually continues the foreclosure process, if you were lucky enough to have it halted due to the short sale.

While the home was not on the market due to the slippery buyer, a sincere buyer who might have purchased the home didn't even have an opportunity to see the home.  The seller lost serious buyers because of a buyer who doesn't take it seriously and has no respect for the seller who is experiencing a hardship and trying desperately to avoid foreclosure.

Do NOT be this buyer.  If you don't fully intend on following through with a contract...DO NOT put in an offer in the first place.  The ramifications to the seller are so much more severe than to a straight resale property where the seller is not behind on payments.  Please be respectful of this fact.

We have gotten calls from agents who told us that they were putting in several offers on several short sales with the intention of getting them all under contract.  They just want to see what closes first.  We explain to them why this is not an acceptable option.  Generally they understand.  Just this week we found out that a buyer that we have under contract on one of our other short sale homes closed on a different property.  We had been in constant contact with the buyer's agent.  We are STILL technically under contract because a release has never been signed.  This agent could have gotten the buyer into a lot of trouble.  They had binding contracts on multiple properties and were obligated to buy both.  This is a dangerous game.

The purchase contract states that "In the performance of the terms and conditions of this Agreement each party will deal fairly and in good faith with the other."  This is not dealing in good faith.

If you are contemplating buying a Jacksonville short sale, please be sure you chose an agent who is experienced in short sales and knows how to handle the transaction.  This is even more important if you owe more on your home than it is worth and need to sell.  Successfully closing a Jacksonville short sale transaction requires dedication, education and experience.  Please make sure your agent qualifies.

If we can help you buy a Jacksonville Short Sale, let us know.  We would be happy to help you purchase a Jacksonville distressed property for a bargain price.  If you are no longer able to afford your home and have to sell your Jacksonville Real Estate and suspect that you owe more than your home is worth, please let us know.  We can explain the process and begin trying to find your buyer. 

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.

Foreclosures and short sales continue to be on the rise in the Jacksonville Florida Real Estate market.  The 2008 year saw dramatic changes to the market.  Sellers began to lose their "staying power" short sales and REOs took off.

The year opened with the Jacksonville Real Estate Market at a low 6.21% ratio of homes sold being distressed properties-either foreclosures or short sales.  By the December 31st of 2008, that average had gone up to almost 22%.  The December 31st average of short sales and REOs sold over the past 30 days was almost 32% indicating that this average is continuing to go up as Jacksonville short sales and foreclosures continue to be the place to find deals.

For single family homes and townhomes (non-condo properties), the pending to active ratio for distressed properties is at 30%, dramatically higher than the 14% that the Jacksonville real estate market is seeing overall.  This indicates that these distressed properties are going under contract at a higher rate for every home that comes on the market.  Almost 53% of all homes under contract in the Jacksonville real estate market are now short sales or foreclosures!  They are simply better deals right now.  Sellers that have purchased their homes in the last 5-7 years in many cases can not afford to get out without selling short.  The reluctance to do this is often great, so many sellers continue to try to get money back out of their house.

Buyers are very savvy.  They know when a house is overpriced and they are not interested.  Upgrades that were worth so much a few years back are now largely irrelevant to buyers.  Houses are commodities, buyers simply want the best price.

The condo market is faring slightly better for sellers.  For condos 22% of all condos under contract are short sales or foreclosures.  Just over 10% of the condos sold in 2008 were short sales or foreclosures.  This is up from less than 1% at the beginning of the year.  The fact that over the past 30 days the percentage closed was at 15% shows that the uptrend is continuing.

If you have bought in the last 5-7 years and need an honest, upfront evaluation of your situation, let us know.  We can also help you purchase one of these great deals.  Just let us know when you are ready.

No matter how you feel about your HOA, they unfortunately have a lot of power over you.  This is even more true if you are trying to short sale your property and have gone late on your HOA dues because of your inability to pay.

HOAs are insensitive creatures.  Unlike banks, the management companies in charge don't seem to care about the reason for your hardship.  They are usually more than willing to let your home foreclose before they will take a lesser amount.

They do not see that they are better off having a new homeowner in the home who can, and will, pay their dues on time.  How is forcing a homeowner into foreclosure, so the home remains vacant for longer, better for the surrounding homeowners?  Well common sense says it's not. 

We have a short sale that has been approved by both the first and second lenders.  The family has experienced incredible hardship involving job loss and loss of health.  The HOA management company, in a popular area of Northwest St. Johns County, told us 2 months ago that the amount due was around $1,700.  They drug their feet in getting an actual payoff letter to the title company.  We had allotted $2,000 in the deal to go to paying off the HOA based on what they stated.  The day before yesterday, the number all of the sudden miraculously hit $4,000.  Well, that tooka little bit of wiggling on the HUD to figure out what could be reallocated or renegotiated.  Imagine our surprise when we got another call last night stating that the HOA had added more fees and they were now saying the payoff was $5,000.

The numbers have been established for weeks and we have just been waiting for the buyer's loan to come through.  Can the HOA just randomly add fees and continue to increase the balance?  We can't even get a straight answer and itemization of what is included in the $5,000.  From our understanding the homeowners quit paying roughly a year ago when their extreme, very legitimate, hardship hit.  Even if they haven't paid for a year the deficiency should only be around $1600-$1700.  Where did the rest come from?  We may never know.  We have to try to figure out a way to make the numbers come together even though the fees may or may not be legitimate.  The homeowners can't even pay their mortgage anymore.  They definitely can not afford to hire an attorney to fight the questionable fees. 

The HOA will not take a settlement amount...even one of a few hundred less.   The first lienholder is getting roughly half of what is owed.  The second lienholder is only getting $2,000.  Both are settling for much less, the HOA won't.  The only other option is for the poor family to foreclose in which case the first mortgage holder won't even recover but half of what they are owed.  The HOA said they would rather have the home foreclose and just try to collect after that than take less than the high amount they are quoting.

So yes, the HOA can really wreck your short sale deal.  Don't let it happen to you.  Because of our training and experience we will be able to keep this together.  If you are comtemplating a short sale, do not trust it to someone without extensive training and experience in short sales.  A short sale has many obstacles that an educated agent can manuever. 

Now you can grab some donuts and go get your groceries in the Palencia area.  Food Lion opened last week and is supposed to be a deluxe version of the store. 

We enjoyed breakfast at Dunkin' Donuts on Sunday and the store had quite a bit of traffic just in the few minutes we were in there.

Dunkin' Donuts and Food Lion are both located just south of the Palenicia entrance.  You can access the two stores from US 1 directly, or enter the Palencia subdivision then make the first right.  This is less than 5 minutes from World Golf Village and right down the road from all Palencia neighborhoods, Kensington and the new neighborhood of Las Calinas that is going up just north of Palencia. 

Food Lion and Dunkin' Donuts joins Starbucks and a few other stores and shops at the entrance to Palencia.  Burger King is opening here soon, it looks to be almost complete. 

If you want to live in this great developing Palencia area, we can help!

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 biggest news is that this week, for the first time, the number of homes under contract that are short sales or foreclosures surpassed the 50% mark!  In the Jacksonville Florida Real Estate market 51.5% of all homes (non-condo) currently under contract are short sales or foreclosures.

Last year at this time buyers and agents were still largely avoiding short sales.  This continued on through a good portion of the year.  This is no longer possible.  A quarter of all listings on the market are short sales or foreclosures and those are priced very competitively, as a rule.  The fact that only a quarter of all active listings are short sales or foreclosures, yet over 50% of homes under contract are short sales or foreclosures shows that this is where the bargains are.  If the prices for straight resales were in line with short sales you would expect to see a similar ratio for actives and pendings, however, short sales and foreclosures are getting a larger share of contracts from a lower inventory.  The pending to active ratio for Jacksonville short sales and foreclosures is around 30%, slightly more than double the same ratio for the market overall.

In the past 30 days 31% of all homes closed  were short sales or foreclosures.  This number should start trending up more given the rapidly increasing number of pending homes that fall into this category.  Short sales do have a higher fallout rate because of the complexity of the transaction but this can be minimized with proper handling of short sales transactions by real estate professionals.  We have no way of knowing how many of the pendings have unrealistically low contracts on them that have no shot of bank acceptance.  Those will eventually go back on the market, which is why it's important to put in the lowest possible offer that a bank will accept going into the process.  It saves time and aggravation for buyers and sellers.  If you are trying to sell your home, you have to price your home to be the next to home to sell.  With the market prices trending down, this means lower than your competition if you truly want to sell.