Real Estate in Northeast Florida and Around the World

On a daily basis I am asked at least once about the state of the Northeast Florida real estate market.  How's business, is the market improving, what's going on, etc.  The answer is not a one word or a one sentence answer.  What we have is a Tale of Multiple Markets.

The first market is the one most discussed.  It is comprised of the distressed sales - the short sales and foreclosures.  42% of the overall closed sales in May 2010 were lender-mediated transacations, so the influence of this population is definitely still being felt in Northeast Florida.  This will continue to influence prices in this market, and in some cases in the non-distressed sales.  Some areas have greater than 50% of the homes for sale in the distressed or lender-mediated category, and in these areas, prices have seen the sharpest declines. 

The second market is the non-distressed market.  These are homes where there is no duress on the seller to sell, other than they want or need to for a reason other than they are in some type of financial distress.  Several areas in town have less than 20% of homes for sale in this category, and in a couple of areas, less than 10% of the homes for sale are distressed. This inventory is divided into 2 parts - the house that needs updated, and the house that is move in ready and updated to today's buyer's tastes.

So what is selling?  Depends on the buyer.  The thing to ask yourself as a buyer is what is most important to you?  Price, condition or location?  And if price is the most important thing, remember that sale price does not equate to what you will end up spending if the condition of the house is less than what you desire.  You may pay $20,000 less than market value to get your name on the deed, but you may end up putting another $30,000 for paint, carpet, updating the kitchen/baths or replacing a roof or a/c unit, all because the previous owner neglected to do any of these things.

I have had many buyers begin their process telling me "show me the short sales and foreclosures, I'm not afraid of paint and putting in my own sweat equity".  Until they go through this inventory and see about 15 or 20 houses that all have been neglected, they always think this is what they want.  Do I forewarn them?  Sure.  But this is a market where the buyer has to see it, feel it, smell it, etc., before they really understand what they want - and it typically is not something they have to put that much time/energy/money into.  Many people do not really understand the magnitude of what they are asking for until they are faced with it.  That's OK, I understand this and show them, because at the end of the day, I want my customers satisfied with their decision.

So - the distressed markets see the more drastic price declines and also the non-distressed sale, but where the house has not been brought up to snuff for today's buyer.  Today's buyer wants "move in ready" and "updates to today's look" - meaning the flooring, kitchen and bathrooms need to be updated, walls painted and absolutely clean.  Anything less will result in offers that will be surprisingly low to the seller.  As we learned in Econ 101, price is driven by supply and demand.  The supply of move-in ready and updated homes for sale is in short supply, and these are the homes - in all price ranges - that are not only getting their asking price when they are appropriately priced, but also are getting competing bids from multiple buyers.  The other houses - well, they sit on the market and eventually will sell - once the price has been dropped to "make up" for the deficiencies that the buyer feels is present.  This is why even with the inventory levels still above average, I have buyers asking "is this all there is?" when I show them the list of homes that have met their criteria.

If you want top dollar for your house, you need to understand that condition will always bring the highest and best offer or the low-ball offer.  And if you are looking for a "bargain", trust your real estate professional to help you find value - because lowest price does not equate to value - and in this market, you need an expert to help you understand the difference.  I am continually looking at our market inventory all over NE Florida, as my customers have varying needs and interests, and this market changes every day!  If you need help navigating through the neighborhoods, just give me a shout or a wave - cause I'll probably be cruising through - or better still, just give me a call and we'll chat over a glass of iced tea.

See you around the neighborhood!