Running Uphill – Local Real Estate market exhibits slow but steady improvements
by Laura Jane Pittman –
Resident Community News –
July statistics released by the Northeast Florida Association of Realtors (NEFAR) showed some encouraging numbers. Pending sales across the First Coast were up more than 32 percent from this time last year, and the inventory of homes for sale has dropped 30 percent in a year-to-year comparison.
The median sales prices in Regions 1 and 3, which encompass our historic neighborhoods, leveled out at the 2008 price mark about a year ago and have continued to slowly increase. Lender-owned properties currently account for 39 percent of the market, but that is a drastic improvement from the 60 percent it was at one time. And it’s a welcome relief, say area professionals, to see the inventory of homes for sale dropping below a six-month supply. Six months is considered a balanced market.
“Prices have been going up consistently, and we have been seeing positive growth across the board. Slow and steady is a good thing – we don’t want drastic spikes because that is what got us into trouble in the first place,” explained Melanie Green, communication director for NEFAR. “It’s a supply and demand issue – if there are fewer homes, people want them more.”
Realtors from both sides of the St. Johns report that offices are busy. They have also noticed an increase in multiple offers on homes, which is a different scenario from what buyers have come to expect in recent years. Taft Alexander of the Avondale-Ortega office of Watson Realty had one recent listing that received four offers after having 16 showings in two days – something that was unheard of this time last year.
“It’s as if the floodgates opened, and after years of doom and gloom, we are seeing publications like the Wall Street Journal putting out positive stories,” said Alexander, who had 11 homes under contract this spring.
“People who have been on the fence for a while are more motivated to buy because interest rates are phenomenally low and the market has likely bottomed out,” said Wade Griffin, a realtor with the historic district office of Coldwell Banker Vanguard Realty. Griffin has sold three homes this year that received multiple offers.
The multi-family market is also experiencing positive growth. Ortega Landing just closed on the sale of a penthouse unit and expects to have more sales before the end of the year.
“We have a good response of serious inquiries lately,” said Warren Hickernell, general manager of the Marina & Homes at Ortega Landing. “For example, we are seeing people of retirement age who are thinking about downsizing and finally think they have a chance of selling their existing homes.”
Barbara Swindell, broker-owner of San Marco-based RiverPoint Real Estate, has also seen a traffic increase and noted that her firm has seen an uptick in the number of sales more than significant changes in prices.
“I have been in the business for 32 years, and our general area usually recovers quicker than other areas,” she said. “When I started, interest rates were 6.5 percent. I can’t imagine that they will be any less than they are right now.”
They may not get much lower, but area lenders are predicting that favorable rates are here to stay, at least for a while.
“All indicators, including 10-year treasury notes, point to an extended period of low rates, which will be friendly toward buying or refinancing,” said Gil Pomar, market president at CenterState Bank of Florida. “It is encouraging that the market is changing. We are seeing more second mortgages, a bit more leniency toward credit scores, and there are good products available with lesser down payment.”
According to the numbers, our historic neighborhoods seem to have fared better overall and may be recovering more quickly than many other places in Northeast Florida. Area professionals’ opinions on this vary. Some speculate that more homeowners may have been able to wait out the market, thus avoiding more foreclosures and dramatically lowered selling prices. Others point to the character and general appeal of the city’s more historic areas and their proximity to downtown and other business hubs.
“The variety of our neighborhoods draws people in, as our demographics are broader than in many of the newer suburbs,” said Selby Kaiser, one of the owners of Legends of Real Estate. “Older people like to hear children playing, and vice versa. Also, rising gas prices are encouraging people to look for homes closer in.”
As for what is selling best, the market is strongest at the moment in seller-owned property, said Janie Boyd of Avondale-based Janie Boyd & Associates, versus short sales and foreclosures, which typically involve a more complicated and longer buying process.
“People are snapping up seller-owned property right and left because the process of buying these is easier,” said Boyd. “Houses under $300,000 are selling very quickly.”
Kaiser has seen homes under $200,000 doing well, while Griffin notes that two to three-bedroom homes are in short supply and the high-end market of $500,000 to more than $1 million is beginning to take off. Investors are also beginning to re-emerge as the market stabilizes, and Alexander predicts that the near future will see an increase in property
flipping.
Anita Vining, longtime local realtor and sales leader with Prudential Network Realty, said riverfront homes are going quickly in the historic markets flanking Downtown Jacksonville.
“The choices have narrowed as the properties have been sold,” Vining said. “Avondale’s historic Richmond Street now offers only one waterfront home for sale, with a second
currently under contract.”
Despite positive news, professionals in the industry are still cautious and not allowing themselves to get too excited. Appraisals are still coming in low, said Pomar, which will continue to hinder sales. Recent increases in sales could simply be an indication that sellers are more accepting of lower prices, said Boyd. And the upcoming election is making people nervous, said Kaiser.
“People are often hesitant to make a decision when they do not know what will happen in the future,” said Kaiser. “We are hopeful that after the election, November and December will be bang-up months for the real estate industry.”
As for the occasional doom and gloom story, such as the rumor of a “shadow inventory” of lender-mediated properties (inventory that has been held back purposely and not put on the market), Green is not overly
concerned.
“We have been hearing about shadow inventory for three years, and so far, we have seen no evidence of it,” she said. “It’s an idea that people have latched on to that will probably not be significant even if there are some properties still out there. The market is now to a point that it should be able to absorb them.”
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