Where did the Short Sale deals in the Jacksonville Beach market go?
As a real estate broker I get asked a few of the same questions over and over. “Where can I get a deal?” “Where are the investment opportunities?” “How do I buy something cheap?”
For a number of years now the answer has been distressed property. By distressed I mean short sales, bank owned properties referred to as REO’s and corporate relocations.
A “short sale” is when your debt or mortgage on your home exceeds what you can sell it for.
As many of you know there is a negative connotation with short sales. There is nothing short about them. Short sales in Jacksonville Beach and the waterfront Ponte Vedra Beach Flarea are taking as long as 12 months to close if there are two loans or outstanding HOA dues and fees. Recently, because of changes in short sale regulations timetables have improved.
Although the timetables have improved I have seen a change in the list price of most short sales. Since short sales became a part of our market here at the beach in 2007-2008 they were generally priced as what they are, distressed property. Recently I did a search for an investor who was looking to buy property, fix them up and sell them. I started my search with distressed property looking for distressed prices. What I found was something I not only didn’t expect but something I hadn’t seen before in our market. Short sales and REO’s priced no differently than standard sales. After looking through our inventory I found little to no difference between the two.
What happened to these distressed prices? Where did the deals go? Our inventory here at the beach, (Ponte Vedra Beach, Jacksonville Beach, Neptune Beach and Atlantic Beach) is down significantly.
In April of 2011, we had about 1060 active listings at the beach. In April of 2013, we had about 680. In April of 2011, we had 10 months of inventory. In April of 2013, we had only 3.5 months of inventory. In short our inventory is down about 40% from where it was in 2011.
In a supply and demand business like real estate that will have an effect on pricing. I believe the lack of inventory has led to short sale sellers and lenders on REO’s listing their properties closer to market value.
So, are there still opportunities out there? I’ll answer that in the next blog.