Low inventory driving bidding wars
By Caren Burmeister, Contributing Writer
Jacksonville has the hottest seller’s market of any Florida metropolitan area and low inventory is forcing some buyers into bidding wars for the house of their dreams.
Zillow, an online real estate database, shows Jacksonville’s resale market is hotter than Orlando, Tampa Bay, Fort Myers and Miami-Fort Lauderdale.
But Jacksonville’s hot market could turn cold unless more people put their homes up for sale.
New listings in February dropped 10 percent compared to the same time last year, according to the Northeast Florida Association of Realtors.
“It’s a great seller’s market,” said NEFAR spokeswoman Melanie Green. “Low inventory is driving the market and driving the pricing up. But we need more listings. The supply is not keeping up with the pace of demand.”
A low supply of homes means buyers have fewer choices and must move quickly, said Terrell Newberry, broker-owner of Century 21 Atkins Realty.
“If there’s a nice property in good condition that’s move-in ready and competitively priced, you would be lucky if it lasted a week,” said Newberry, who was NEFAR president in 2016. “Someone else is going to jump on that.”
In the last year, there was an 11 percent increase in the number of homes that sold above list price, according to NEFAR’s February market overview.
During the same time frame, median sales prices rose nearly 21 percent, up to $193,000, and inventory was down 21 percent.
With closed sales reaching 27,873 in 2016, Jacksonville’s resale market is in virtually the same position it was in before the 2007 recession, Green said.
Home buying is active nationally due to an improving job market, growing consumer confidence and attractive mortgage rates that have only recently begun to rise.
Rates are expected to increase to 4.7 percent by the end of 2017, according to the National Association of Realtors.
Jacksonville may be outpacing its urban peers because its sales prices had room to grow.
According to Zillow, Jacksonville’s median home value was one of the lowest among the state’s metropolitan areas.
The biggest challenge is the lack of inventory. In a balanced market, where buyers and sellers have equal bargaining power, there’s typically five to six months of homes in inventory, Green said.
“We’re down to 3.4 months of inventory on hand,” she said. “We’re very well below what’s considered to be a balanced housing market.”
Newberry urges undecided sellers to get ready by decluttering, painting with neutral colors, repairing broken fixtures and upgrading their home’s curb appeal.
Buyers, on the other hand, need to find a Realtor who is a good listener, returns phone calls and has a very clear understanding of what they’re looking for, he said.
To move quickly, they need to have good credit and a preapproval letter from a mortgage company. Green noted buyers may also need to adjust their expectations for the home and the price they had in mind.