Jacksonville Real Estate Market Information

In the name of progress and improving the system, HUD issued new short sale guidelines on December 24, 2008 outlining a brand new set of rules regarding how short sales are to work when the seller has an FHA loan.  These new rules apply to Jacksonville short sales and short sales around the country.

Here are a couple of quotes from HUD regarding why they are making the changes:

"High foreclosure rates continue to have devastating effects on families and neighborhoods. The Federal Housing Administration (FHA) remains committed to taking actions to help families avoid foreclosure. "

"FHA has consolidated in this ML the requirements of the PFS Program that have been issued over the years, and has updated and clarified those requirements where needed, to better address the problems faced by mortgagors today and provide greater flexibility in considering a mortgagor’s candidacy for participation in this program. "

We think that the new requirements are a step backwards.  What they had already wasn't bad.  The net to the lender, after all closing costs were paid, had to be 82% of the fair market value of your Jacksonville short sale. 

Out of the blue they changed the reasonable ratio of 82% to a sliding ratio of 88% (first 30 days of marketing), to 86% (for the next 30 days of marketing), down to a minimum acceptable ratio of 84% if the home has been on the market over 60 days.  They raised the amounts that the lender has to net on the deal.  In a buyer's market heavily saturated with distressed sales, we are not sure why they thought that this will provide "greater flexibility."

Sure, they got rid of the pesky ratio that required the market value be a certain percentage of the total loan amount which was definitely a good thing.  Raising the ratio was definitely a giant step backwards that will make it harder to purchase an FHA home in a short sale and ultimately force more families into foreclosure.

HUD requires an appraisal, rather than a BPO, to determine fair market value.  The guidelines instruct the appraiser to determine fair market value using comps that are not distressed properties.  Wouldn't a true "comparable" be a distressed property by definition?  This is while the national average shows around half of all homes being sold now are distressed properties.  Our Jacksonville real estate market shows a similar ratio.  So now you have to obtain an offer of 88% (or 86% or 84%), of an inflated fair market value determination, to have a successful FHA short sale.

Here is another interesting tidbit.   The letter outlining the new requirements state, "Regardless of the property's sale price, a mortgagee may not approve a PFS contract if the net sales proceeds fall below the minimum allowable thresholds stated herein.  HUD has established guidelines for varying  minimum net sales proceeds based on the length of time a property has been competitively marketed for sale."  (Emphasis ours) While the letter says it's based on the length of time a property has been competitively marketed for sale, we are being told by a major lender that the "marketing period" according to HUD doesn't start when the home is actually put on the market.  Instead the marketing period for the purpose of determining the applicable ratio doesn't start until the lender has issued an approval to participate in the program.  This approval to participate is not issued until after a file review is completed and an appraisal determines the "fair market value" for the property which, as we've seen, can take months. 

The lender does not have a timeframe, that we can find, that they have to respond to the application to participate.  It just took over two months to get an approval to participate with complete package submission on Day One for one of our sellers.  Nothing was missing from the package and they did not have to request additional documentation.  They just sat on the file for two months, even with regular calls and communication.  This timeline will vary from bank to bank, and even negotiator to negotiator within the bank.  In the end you will have a preapproved price that you must obtain to successfully sell your Jacksonville short sale, even if the market demands a lower price.

So is the seller supposed to delay putting their home on the market waiting to be told the price they are allowed to sell the home for?  This wait is for an unpredictable amount of time.  In a declining market they will be waiting while market values crash around them and will likely be given an inflated, and unattainable,  price in the end.  And what if an approval to participate is not issued until a long period of time after the appraisal (which is likely to be inflated to start with)  is completed?  Does a seller go ahead and put their home on the market before the approval is issued knowing they have to get 88% of some value they aren't aware of yet?  Why should a seller waste valuable marketing time when values are headed lower?  This defies reason.

This is just one example of why you need an experienced short sale specialist when selling your home.  All short sales will not be successful.  At the same time, if you are working with a Jacksonville short sale specialist who understands the system and the challenges, and how to work around them, you will greatly increase your odds.  If you have a Jacksonville short sale, or are thinking about purchasing one, make sure you have knowledge and experience on your side. 

The overall Jacksonville Florida real estate market has an inventory level of 12.87 months based on the past year.  Based on the past 30 days of sales this level is currently at 18.73, down from 22 months just one month ago.  This is an indicator that Jacksonville real estate market activity is picking up.  We have seen the pending to active ratio go from around 14.5% a month ago to today's 18.73%, a healthy jump in current activity.  This demonstrates that buyer are putting down contracts at a higher rate than they were.  Although it's still a strong buyers market, it's moving closer to healthy territory than we have seen it in a long time.

The most balanced sub-market we see today is in the Southside Jacksonville area.  Southside has an inventory level of just over 10 months based on the past year and 14.81 months based on the past 30 days sales.  This is down from Southside Jacksonville's real estate market inventory that, just a month ago, was at 10.74 based on the past year and 21.76 months based on the past 30 days.  This change in the 30 day inventory level represents a significant increase in home buying for this area.  The active to pending ratios we see for Southside Jacksonville is up roughly 2% from a month ago for the overall Southside Jacksonville Real Estate Market.  For distressed properties (Short Sales and Foreclosures) in the Southside Jacksonville Real Estate Market the pending to active ratio is up 5% from just a month ago.  These numbers indicate more buyers are putting down contracts.

The sub-markets where buyers have the biggest advantage today is out at the beaches.  Jacksonville Beach, Neptune Beach, Atlantic Beach and Ponte Vedra Beach are all demonstrating a real estate market that is highly weighted towards the buyers. 

The Ponte Vedra Beach real estate market has seen the pending to active ratio go up in the past month from a low of 5.76% to 9.38%.  An interesting note is that the pending to active ratio for Ponte Vedra Beach distressed properties has increased from 20.93% a month ago to a balanced 56.41% pending to active ratio.  This indicates that although Ponte Vedra Beach has a very weak real estate market currently overall, in the area of Ponte Vedra Beach short sales and Ponte Vedra Beach foreclosures, it is now a balanced market, with no advantage to buyers!  Buyers are apparently hungry for bargains in Ponte Vedra Beach.  Remember, this is indicative of buyers getting off the fence and entering into contracts with sellers...we can not predict how many of these will go to closing.  Inventory levels in Ponte Vedra Beach have remained steady for the past month based on the past year's sales.  The inventory levels based on the past 30 days sales have gone down from 47 months to today's inventory level of 35.53 months.  This indicates a pickup in the pace of Ponte Vedra Beach real estate sales.

For the Jacksonville Beach, Neptune Beach and Atlantic Beach sub-market, numbers have remained very steady in comparison today compared to a month ago.  The pending to active ratio has gone up a little over 1% in the past month.  The beaches inventory level based on sales for the past 12 months has remained almost completely unchanged.  The inventory level based on sales for the past 30 days has dropped only 2 months of inventory since last month this time.  This is an indicator that the Jacksonville Beach, Neptune Beach and Atlantic Beach real estate markets do not seem to be picking up as fast as some of our other sub-markets and the Jacksonville real estate market overall.

We will continue to follow this for you and let you know the conditions of the Jacksonville real estate market as they develop.  For expert, reliable help from a team of real estate professionals who really understand the Jacksonville real estate market call us!

Jacksonville short sales...everyone has heard of short sales today.  Even though everyone is talking about Jacksonville short sales there is an abundant amount of misinformation out there.  You can research the issue online and within minutes will be filled with just as many untruths about the process as facts.

The most important thing, whether you are buying or selling a Jacksonville short sale property is to use an agent who is a Jacksonville short sale specialist.  Here are a few things you need to know if you are considering buying a Jacksonville short sale:

• A Jacksonville short sale contract is binding just like a regular real estate contract.  There is a myth in our area that a short sale contract is not really a contract until it has been approved by the bank.  Not true.

• A Jacksonville short sale will take more time than a regular transaction.  Even banks that have their act together can take a long time to approve Jacksonville short sales.  DO NOT SUBMIT AN OFFER ON A JACKSONVILLE SHORT SALE IF YOU CAN NOT WAIT AT LEAST 60 DAYS FOR BANK APPROVAL.  Will it take sixty days?  Quite possibly not.  Maybe so.  There is no way to know for sure in advance.  Even short sales within the same bank can take drastically different timeframes for an answer.  A lot of it comes down to the negotiator at the bank you are assigned to and the current workload of the loss mitigation department.  Do not put in an offer and start calling and threatening to "walk" two weeks later.  While the seller will care, the bank really doesn't care if you walk or not.  A sad, but true, fact.  Your expectations have to be reasonable or don't bother.

• If you are buying a Jacksonville short sale, you need to realize that the bank is not the seller.  The homeowner is the seller.  The homeowner is the one who negotiates with you and decides whether to accept your offer and submit it to the bank.  Do not submit a silly offer and demand that the bank make the decision, not the seller.

• You need to structure your offer based on the current fair market value of the Jacksonville short sale property.  The bank will order an appraisal or a BPO (Broker's Price Opinion) and will make a decision whether to release the lien and allow the Jacksonville short sale to go forward based on the indicated value of the appraisal.  If there is a VA or FHA loan on the property there are specific guidelines for where the minimum contract price can be, based on fair market value based on an appraisal ordered by the lender.  If it is conventional, it is determined by the internal and investor guidelines and may be determined by a BPO or appraisal depending on their guidelines.

• The seller is in a Jacksonville short sale position for a reason.  They usually do not have money to make any repairs.  This needs to be established upfront in the negotiations. 

• If the utilities are already turned off, you may have to pay to have the utilities to be turned on for your inspections and appraisal, if required. These details should be established upfront in the negotiations.  Do not try to renegotiate this later. 

• Once the Jacksonville short sale is approved, the bank will demand that a closing take place in a certain period of time.  You need to be ready. 

• If the Jacksonville short sale property has a second mortgage on it it will take more time, especially if it is a different lender.  The second lender is usually asked to take a very small amount and may even come in and set additional parameters for the deal that the first lienholder did not ask for.

• All Jacksonville short sales will not be successful.  No matter how perfect the package, no matter how good the offer is, it is always possible the short sale could be ultimately denied based on some obscure "investor guidelines."  Even HUD allows a FHA short sale to be denied  (even if it meets all of the guidelines)  if the lender feels that the home can continue to be marketed and net a higher amount.  It is possible you will have put forth money on inspections or loan charges and will not get the house ultimately.  That is the risk you take for getting a good deal.  Even on straight resales some will fall out after you have put out money on inspections and appraisals.  Nothing is definite, understand this upfront.

If you are not up for the challenge, you should consider buying a straight resale not a Jacksonville short sale.  You will usually pay a little more depending on the seller's equity position but you will have a lot less hassle and be able to close faster, in general.  Attempting a Jacksonville short sale without a Jacksonville short sale specialist is like finding Seattle, Washington without a map.  You may get there eventually, but it will take a lot more time and aggravation.

Jacksonville Real Estate Market Statistics

• Active Listings in the Jacksonville Real Estate Market (non-condo)today- 10,577
• Active Listings in the Jacksonville Real Estate Market, one year ago- 11,615

• Pending Listings in the Jacksonville Real Estate Market (non-condo) today- 1,762
• Pending Listings in the Jacksonville Real Estate Market, one year ago - 1,437

• Percentage of active listings that are distressed properties - 25.28%
• Percentage of active Jacksonville real estate listings that are straight resales - 63.29%

Jacksonville Real Estate Market Inventory Levels

• Months of Inventory in Jacksonville Real Estate Market today Based on sales for the past year - 13.05 Months
• Months of Inventory in Jacksonville real estate market, one year ago,  based on sales for prior year - 11.28 Months
• Months of Inventory in Jacksonville Real Estate Market today Based on sales for the past 30 days - 20.9 Months
• Months of Inventory in Jacksonville Real Estate Market, one year ago,  Based on sales for the prior 30 days,  - 19.17

Jacksonville Active-to-Pending Ratios

• Active-to-Pending Ratio for overall Jacksonville Real Estate Market today- 16.66%
• Active-to-Pending Ratio for overall Jacksonville Real Estate Market, one year ago - 12.37%
• Active-to-Pending Ratio for straight resales in the Jacksonville Real Estate Market - 8.44%
• Active-to-Pending Ratio for Distressed Properties (Jacksonville Short Sales and Jacksonville Foreclosures) - 33.92%

Jacksonville Real Estate Market Sales Breakdown

• Percentage of Jacksonville Real Estate Sales past 30 days that were distressed properties - 45.71%
• Percentage of Jacksonville Real Estate Pendings that are distressed properties - 51.48%
• Percentage of Jacksonville Real Estate Sales past 30 days that were straight resales - 42.51%
• Percentage of Jacksonville Real Estate Pendings that are straight resales - 32.07%
• One Year Ago:
  •  Percentage of Jacksonville Real Estate Sales in the prior 30 days that were distressed properties - 17.49%
  • Percentage of Jacksonville Real Estate Sales in the prior 30 days that were straight resales - 63.7%

  A couple of the new trends I see are very positive.  First, the number of listings are down.   So it appears that sellers who don't have to sell may be starting to realize they need to wait this cycle out. 

Another very positive trend is that the active-to-pending ratio is up to the highest level we've seen in a while and up more than 4% over last year at this time and is getting close to the 18.88% it was during the same week two years ago when the Jacksonville real estate market significantly healthier, although it was in a downswing.  This also indicates current action.

The number of pendings are up from last year.   This indicates that more buyers are starting to take action.  On a very positive note, our pendings are only 160 below this time in 2007.    Keep in mind, the pendings mean nothing if they don't ultimately make it to the closing table, something that can not be predicted accurately at this point.  Active and pending numbers are a snapshot in time and indicate current activity are do not translate into closed sales.  These numbers are also highly dependent on the information being put into the system correctly and the validity of the sales contracts behind the pendings. 

Months of Inventory levels are still high, but remember they are based on historical numbers.  The inventory numbers are calculated based on the past 12 months sales and past 30 days of sales, both of which have been weak which would keep the number higher.  If we see closings start to happen at a higher rate, we should see the inventory based on the past 30 days trend down much faster than the inventory based on the past 12 months.  If all of the pendings were to close in the next 30 days, the market would fall to an inventory level of only 6 months based on that 30 day period.  That is how quickly we could see the Jacksonville real estate market turn around if the different factors were to fall into place.

If you are a Jacksonville home buyer who has been trying to decide if it is the "right time" to buy...don't sit it out until it's too late.  Remember, after the seller's catch on to a shift, the dynamics will change radically.  Get a good buyer's agent and get into the game.  Let us know if we can help you!

This eagerly anticipated Publix opened this morning at the Shoppes of MuraBella just outside the MuraBella subdivision and right outside the gates of the King and Bear.  The store hours are 7 am to 10 pm daily.  The Pharmacy is open 8 am to 8 pm during the week, 9 am to 7 pm on Saturdays and 11 am to 6 pm on Sundays.  The phone number is 904-940-2889 and the number to the pharmacy is 940-2894.

A year ago, residents of the World Golf Village area had to drive to CR 210 for a pharmacy and drive to I-95 and International Golf for the small Publix situated there.  Many times you would have to drive to the Publix on 210 for a better selection.

With this new Publix, a CVS and Walgreens all opening over the past year at the corner of International Golf/Pacetti and SR 16 residents are ecstatic!

January 2009 shaped up to reveal big changes to the Jacksonville real estate market.  Jacksonville Short Sales and Foreclosures sold in January are essential equal to straight resales sold.  This is a big jump from 2007 where distressed properties were just slightly above an average year and were only sitting at 8.56% of total real estate sales.

The Jacksonville metro area saw surprisingly few real estate closings in January.  The number of closings was down dramatically from  January 2008, roughly 28% lower, and experienced a large 38% drop from the prior month, December of 2008.

Distressed property sales (Jacksonville short sales and Jacksonville foreclosures) account for 41.76% of all sales in January while straight resales only account for 42.23%.  In December while these two numbers were trending closer than ever before 26% separated Jacksonville Short Sales and Foreclosures from straight resales.  As of this morning for sales that have been recorded timely, the gap is only FOUR CLOSINGS separating the two.

For those who think Jacksonville distressed properties are not a reflection of the market...Jacksonville foreclosures and Jacksonville Short Sales are MAKING the market.

This is reality.  If you are looking for a good deal on a home, you can not avoid Jacksonville short sales and foreclosures.  Find a great short sale specialist and find your new home.