How Affordability Affects Selling a Home in Jacksonville
At the time of the June 2022 market peak, the average sales price of a single family home in the Jacksonville MSA which includes parts of Clay and St. Johns Counties, had risen 54.2% from June of 2019. Prices have since fallen some 6.2%, with December marking the second consecutive month of deflation. When combined with increased available inventory and lower sales volume, sellers should be concerned.
But what’s the cause? While there is no single answer for these kinds of shifts in a complex economic ecosystem there’s no denying that rising interest rates have played a significant part. Since that market peak of June 2022 the average 30 year fixed rate mortgage has risen about a percent and a half, and more than three and a half percent since the 2022 low.
Interest rates directly affect affordability, just like home prices. A November 2022 report from Black Knight, Inc, a Jacksonville based financial services corporation, stated that the average monthly mortgage payment for a newly originated mortgage at the median price was 65% higher that month than the year prior. When potential buyers can’t afford the available homes at their current prices, the only way to go is down.
The Real Estate Market
The real estate market has seen an explosive couple of years, and cooling is to be expected, but is this a crash? Experts are divided, but nobody has a crystal ball. We at Duval Home Buyers don’t expect to see anything like the fall of the 2008 market, but all signs point to continued albeit light downward pressure.
Rental property prices have also fallen, with availability rising in a previously tight rental market. Investors are having a more difficult time meeting yield requirements as borrowing has become more expensive. All of this leads to less demand for housing, and more competition between sellers.
There is still debate regarding a buyers vs sellers market, but few agents are experiencing the flurry of above asking offers that once accompanied many listings. Some listings of owned assets at our partnered brokerage Wholesale Realty have seen little to no activity, where once there would have been a bidding war. That’s not to say that all of their inventory is having difficulty selling, as there are still plenty of active buyers, but the field has narrowed.
Selling Your Jacksonville Home in the Current Market
Selling a home is a large financial decision, and one that shouldn’t be taken lightly. Selling well, and meeting your selling needs should be at the forefront of your thoughts when you start making preparations. A greater emphasis should be placed on updated features, repairs, and luxury staging to make your home’s listing stand out. Expect that it may take significantly longer for your home to sell, with the average time from listing to sale up to 85 days, a far-cry from the 47 days in May 2022.
Price cuts are also more common, and may be necessary if other comparable homes in your area begin to lower their prices in an effort to be more competitive. Be sure to discuss these things in-depth with your real estate agent before your list, and keep up to date with their suggestions during the listing process.
Selling For Cash
There’s also the cash option, off-market. While many investors have backed out of the market altogether, there are a few (such as Duval Home Buyers) that are still offering highly competitive cash solutions. Expect to trade a small portion of the equity for the convenience of not having to make repairs, upgrades, or show the home, and the benefit of closing the sale in just a few days instead of months. Sellers using a cash option should also expect a savings of 6-9% on real estate commissions and closing costs. And ultimately a good cash offer will usually net very close to what a listed sale would after repair concessions, closing costs, and commission.
Whatever you decide, understanding how affordability and other related market conditions affect your home sale is critical. If you have any questions about selling your home or want to get a quick cash offer, be sure to contact our office, and our team of local licensed agents will be glad to assist you. Sell well.
*Wholesale Realty and Duval Home Buyers LLC are affiliated and may share owning members and managers.