Why is the housing market thriving in Northeast Florida?

Bold Predictions by Momentum's Co-Founder.

As boldly predicted by Momentum Realty’s co-founder, Jon Brooks, the COVID-19 pandemic has failed to derail the housing market in Northeast Florida, despite an initial downturn this spring.

When COVID-19 led to a local shut-down on March 20, the result was closed sales going down 22% in April, and 32% in May, according to the Northeast Florida Association of Realtors (NEFAR).

During those months, many deals fell through due to layoffs, furloughs, and tougher lending standards (i.e., credit score requirements jumping from 600 to 640+). But in June and July, those lending standards began to loosen as COVID-19 and investor fears dissipated.

As Jon, a former real estate investment banker and tax policy analyst, forecasted in a post dated March 23, 2020, that low housing inventory will push prices up via the supply-and-demand curve.

Therefore, in July, median home prices were up 9.8%, while housing supply was down 29.9%. That market change has given homeowners a large equity boost, while the continuation of interest rates below 3% offers an opportunity to refinance at record-low interest rates.

July’s closed sales were up 15.8%, and Jon predicts that, with more Sellers keeping their homes off the market, we will likely see less home inventory as we head into the winter months.

Therefore, for Buyers entering the Northeast Florida housing market, it'll get worse before it gets better, and many high-net-worth individuals believe that we won't get back to any sort of normalcy until Summer 2021. Overall, Buyers in our local market can expect potential multiple offer situations for any listing that is in a good location, on a good lot, with a good layout.

At Momentum, we believe this information is important to share upfront with our Buyers, so you won't end up frustrated when trying to get a lower-than-list offer accepted. In fact, Jon personally believes that, in our specific market, Buyers are lucky to get a quality home under contract in virtually any price range under $1,000,000. Good homes that are priced fairly sell the same day they’re listed.

In this type of market, success requires hiring an aggressive real estate agent who knows how to negotiate on your behalf.

Momentum recognizes that, and is proud to note that nearly half of its agents are Certified Negotiation Experts, equipped with the skills and tools to be able to help Buyers at a higher level.

To summarize:

1) Historically low mortgage rates are improving affordability and driving demand nationwide.

2) A shift to virtual workplaces and classrooms is driving demand for larger housing spaces, bucking the prior trend of many Sellers seeking to downsize.

3) There is a growing emphasis on lower cost, low tax, and warmer climate states such as Florida that is creating additional buyer demand from high-cost states (i.e., New Jersey, New York, Washington, D.C. and California).

4) This is an extreme Sellers’ market, and Buyers should be ready to pounce on opportunities when they arise. Low-ball offers on homes just hitting the market are a sure-fire path to frustration and failed bids; houses on the market for more than 60-90 days may offer Buyers a better opportunity to negotiate. According to NEFAR, the number of homes selling above their list price is at one of the highest rates in recent times: 15.8%.

Would you like more information about the housing market in Northeast Florida?

Simply reach out to Jon @ 904-570-1216. In addition to his background in real estate investment banking and tax policy, Jon, who studied business and real estate at Virginia Tech, is an active investor in rental properties in Northeast Florida.