How Much Do People Want to Buy Homes in Jacksonville?

Dee Bumbarger talks about a nice duplex that was put on the market last month in Baymeadows. She couldn’t get an appointment to see the place until the second day it was for sale, and the seasoned real estate agent had to place an offer before 6 p.m. to even be considered.

There were 35 bids, and the winning bidder offered almost 10% above the asking price.

“We see it on anything that is priced right,” Bumbarger said.

Northeast Florida’s housing market, which remained strong when hundreds of people a day were diagnosed with COVID-19 last year, is experiencing a moment as fear of the pandemic recedes in people’s memory.

Home prices have risen 12.5% ​​- about $ 30,000 for a typical home – for the first four months of this year and the number of homes under contract has increased by more than a quarter, according to figures from the Northeast Florida Association of Realtors. The figures for May are still being worked out.

And people don’t wait to sign deals on the homes they love.

“They contract from day one. A few days on the market, it’s under contract. You should see my alerts, ”said Diana Galavis, a real estate agent who is the association’s treasurer.

The hectic housing market is happening across the country making it more difficult to know exactly how much homes will sell for.

Galavis said a client who left Washington state for work recently offered $ 30,000 more than asking for a house, but left empty-handed anyway. The house went to a buyer who offered about $ 40,000 more.

The average home stays on the market for just under six weeks before it’s sold, but that’s weeks less than normal in Northeast Florida.

The region’s persistent growth, coupled with low interest rates that make buying a home more attractive, has boosted demand as people try to take action that they have deferred for months. the darkest of the pandemic.

“There are a lot of people out there who have the opportunity to buy a home and start to compete,” said Richard J. Buttimer, dean of Coggin College of Business at the University of North Florida, who had a great time. part of his life studying real estate.

The area’s inventory of homes for sale fell to 3,991 in April from about 9,500 a year earlier.

Builders are doing a lot to put new homes up for sale – the Jacksonville five-county metro area issued the 11th highest number of residential building permits in the country between January and April – but supply issues make new homes more expensive and add delays to when they’re available.

“We have supply issues in just about every category of material we deal with, some worse than others,” said Jessie Spradley, director of government affairs for the Northeast Florida Builders Association.

Some window suppliers have told builders to expect delays of up to 19 weeks, Spradley said, and other materials are suddenly incredibly expensive. Oriented strand board, the engineered wood sheets called OSB that had become more popular than plywood, jumped in price from around $ 8 per sheet to between $ 47 and $ 50.

Lumber of all types is in such demand that Spradley said the National Association of Home Builders estimated that the cost of lumber for a typical American home has increased by $ 36,000 since April 2020.

Business forecasts that predicted a drop in home construction during a pandemic-induced recession did not consider how much wood people working from home would buy for home improvement projects, creating enormous pressure on the available supply. said David Menachof, who teaches business supply chains at Florida Atlantic University.

Companies are solving these problems, but it’s happening slowly, Menachof said. “Think of it as a giant ship,” he said. “You turn the wheel, [but] it doesn’t turn like a car. … It will catch up much later.

Even if people are willing to substitute materials, Spradley said some products – including tie-downs required by building codes – just aren’t available sometimes. When that happens, he said, “you just have to wait.”

All of the supply issues make already built homes a hotter product and that heat is focusing some buyers on closing, not getting the lowest price.

“Right now people are fighting against each other and they are willing to pay more than the list price,” Bumberger said. About 37% of homes sold in April were on a higher than list price contract, NEFAR reported.

Bumbarger said a couple recently bought a home for around $ 750,000 that would have sold three years ago for $ 200,000 less. They didn’t get a bad deal, she said.

“It’s just the market,” she said.

In April, homes sold on average for 99.4% of the original sale price, NEFAR reported.

By the end of April, the Jacksonville area had enough homes on the market to last about five weeks, according to NEFAR data. A year earlier, it had been about three and a half months.

Galavis said she believes more people will decide to sell their homes over the next few months and have held back so far because they had the time and didn’t want to deal with selling and moving during the pandemic. But that’s all guesswork, which is best anyone can do. She thinks the market will remain very strong next year, but knows she could be wrong.

“Are we in a bubble? asked Galavis. ” …We do not know. We don’t have a crystal ball.