\n<\/div><\/div>\n<\/div>\n<\/div>\n

By Alexandria Mansfield<\/div><\/div>\n

Many buyers in Fla. and across the U.S. are feeling the impact of a lack of inventory, competition from investors and rising prices during their home search.<\/span><\/span><\/span><\/p>\n<\/div>\n

JACKSONVILLE, Fla. \u2013 The process of buying a house can put your life on pause.<\/span><\/span><\/span><\/p>\n

There are so many things you can\u2019t do when going through the process of buying a new home. Free time can be absorbed by scrolling through Zillow listings or touring places with real estate agents.<\/span><\/span><\/span><\/p>\n

If you are relying on financing, you are advised not to make any other big purchases \u2013 like a car or furniture \u2013 during the buying process or open a new line of credit because it may affect your credit score.<\/span><\/span><\/span><\/p>\n

For Abby Denmark, she found herself wary of making any major changes while house hunting. She even postponed planning her wedding to her partner of four years, Ryan Norton, in order to focus their energy and financing on securing a place to live.<\/span><\/span><\/span><\/p>\n

That was a year ago.<\/span><\/span><\/span><\/p>\n

Denmark\u2019s story is similar to many in the country, but particularly those looking to buy homes in the Jacksonville area.<\/span><\/span><\/span><\/p>\n

Part of this trend is a lack of inventory on the market, according to Florida Housing Coalition CEO Jaimie Ross. Between labor shortage and supply chain issues, homes aren\u2019t being built as fast as they were in 2019 or 2020.<\/span><\/span><\/span><\/p>\n

Another part of the equation, however, is the record-setting rates at which investors and investment companies are buying homes.<\/span><\/span><\/span><\/p>\n

Last year, investors bought nearly one in seven homes sold in America\u2019s top metropolitan areas, the most in at least two decades, according to a recent Washington Post report.<\/span><\/span><\/span><\/p>\n

In the Jacksonville metro area, 22% of homes purchased were bought by investors. This is double the rate of the 11% of homes purchased by investors in 2015.<\/span><\/span><\/span><\/p>\n

Jacksonville is the No. 4 metro area in which investors bought the highest percentage of homes, following Atlanta and Chicago, at 25% each, and Miami at 24%.<\/span><\/span><\/span><\/p>\n

To those in the Jacksonville Real Estate Investors\u2019 Association (JaxREIA), an education and networking nonprofit with over 400 active members, it\u2019s a good time to be buying and flipping homes, said JaxREIA President Mike Grandjean.<\/span><\/span><\/span><\/p>\n

\u201cFor a lot of investors, the strategy is dictated by the time and the property,\u201d Grandjean said. \u201cNow is a pretty good time to be flipping property. You\u2019re still going to be having some people buying and holding [to rent], but I think the times kind of dictate that a little bit.\u201d<\/span><\/span><\/span><\/p>\n

Grandjean said investors are selling and renting at about a 50-50 rate right now, whereas in a more \u201cstabilized market,\u201d he typically sees closer to a 70-30 or 60-40 split in favor of investors buying property to rent it.<\/span><\/span><\/span><\/p>\n

\u201cNow is a good time to be flipping,\u201d he said, \u201cand that\u2019s not a bad thing for those first-time homebuyers.\u201d<\/span><\/span><\/span><\/p>\n

Grandjean described real estate investors as enhancing current inventory on the market so houses that might not qualify for financing meet the necessary standards.<\/span><\/span><\/span><\/p>\n

\u201cIt refreshes the market,\u201d he said.<\/span><\/span><\/span><\/p>\n

Unfortunately for those buyers, real estate is appreciating at nearly 20% a year, which can easily price people out of the market.<\/span><\/span><\/span><\/p>\n

Ross described investment purchases as \u201ca big part of the affordable housing crisis.\u201d<\/span><\/span><\/span><\/p>\n

\u201cThe best thing you can do is to get into stable housing,\u201d Ross said. \u201cI think it\u2019s only going to get harder. [Renting] is just not very stable.\u201d<\/span><\/span><\/span><\/p>\n

A year in the making<\/span><\/span><\/span><\/h3>\n
As a first-time homebuyer, Denmark, 28, said the competition she experienced in the market had her teetering back and forth between wanting to purchase a home or settling on renting in order to live with her partner, Norton, who moved in with his parents after being priced out of his apartment in Riverside in December 2020.<\/span><\/span><\/span><\/p>\n
Denmark, a patient care technician at Ascension St. Vincent\u2019s Riverside Hospital, said it felt impossible to compete in the housing market at times because she and Norton work full time and couldn\u2019t tour homes fast enough.<\/span><\/span><\/span><\/p>\n
\u201cIt was disappointing too because Jacksonville is such a cool place and people who want to enjoy the culture and they\u2019re being priced out of it,\u201d Denmark said. \u201cYou could be the cruddiest house in the nicest neighborhood or the nicest house in the cruddiest neighborhood.\u201d<\/span><\/span><\/span><\/p>\n
At one point, the couple was so disheartened by the housing market that they considered finding a place to rent together instead and delaying their dreams of homeownership but decided against it because it would cost them more money in the long term.<\/span><\/span><\/span><\/p>\n
\u201cThe only way for middle-class Americans to accrue wealth is to buy a home and own property,\u201d said Norton, who works for a specialty medical equipment company. \u201cAnd renting for $2,500 a month… you\u2019re just never going to own that, you know?\u201d<\/span><\/span><\/span><\/p>\n
Denmark said she found it hard not to take being priced out of potential home purchases personally.<\/span><\/span><\/span><\/p>\n
\u201cIt\u2019s money,\u201d she said. \u201cLike this is our future, this is money to consider for my daughter. It\u2019s not like we\u2019re deadbeats, and somehow this market isn\u2019t wanting people like that to succeed.\u201d<\/span><\/span><\/span><\/p>\n
Norton said they looked in the Fruit Cove, Lakeshore and Ortega areas to find a family-friendly home with enough space for their artistic hobbies. He estimated that, on an average week for the last year, they would see 15 or 20 houses of interest and most of them were off the market again before they could even schedule a showing.<\/span><\/span><\/span><\/p>\n
\u201cThe few experiences we had where we were getting close were just so disappointing,\u201d Denmark said. \u201cThe house before this last house was like a bad breakup. Like no one compares to that house, and I don\u2019t even want to date anymore.\u201d<\/span><\/span><\/span><\/p>\n
A year after starting their home search, Denmark and Norton hope to close on their first property at the end of the month.<\/span><\/span><\/span><\/p>\n
Grandjean said he could see a clear effect this market and investment purchases were having on first-time homebuyers.<\/span><\/span><\/span><\/p>\n
\u201cYou\u2019re competing with not just mom and pop investors but Wall Street investors for the inventory that is out there,\u201d he said.<\/span><\/span><\/span><\/p>\n
The sheer number of investment companies doing business in Florida is inflating the market and driving up the costs while also being more competitive than individual buyers are able to be for the houses that do go on the market.<\/span><\/span><\/span><\/p>\n
Duval County Property Appraiser Jerry Holland noted these sales affect overall values by creating \u201ca greater demand for homes when they are for sale.\u201d<\/span><\/span><\/span><\/p>\n
\u201cIt drives the price up,\u201d Holland said. \u201cThe investor market is definitely paying into higher prices because of the demand.\u201d<\/span><\/span><\/span><\/p>\n
San Francisco-based Opendoor, a digital residential real estate company that makes cash offers on homes to repair and resell, is one of these types of investment companies. The company has purchased 413 homes in Duval County alone since 2020.<\/span><\/span><\/span><\/p>\n
Low inventory breeds more competition<\/span><\/span><\/span><\/h3>\n
A Sept. 1 Comprehensive Market Analysis for Jacksonville from the U.S. Department of Housing and Urban Development labeled the supply of homes for sale as \u201ctight,\u201d noting supply fell to about a 1.4-month inventory during August 2021, \u201cdown from 2.4- and 3.2-month supplies during August 2020 and August 2019, respectively.\u201d<\/span><\/span><\/span><\/p>\n
Grandjean estimated the supply is closer to under one month now.<\/span><\/span><\/span><\/p>\n
\u201cWe\u2019re looking at low inventory,\u201d Grandjean said. \u201cIn a stable market, there is about six months\u2019 worth of inventory, and we\u2019re below one month. I think it\u2019s just as hard for an investor to compete as well.\u201d<\/span><\/span><\/span><\/p>\n
New and existing home sales increased 9% during the 12 months ending\u00a0August 2021, the HUD report also said, with an average price increase of 17%.<\/span><\/span><\/span><\/p>\n
\u201cFirst-time homebuyers can\u2019t compete with investors,\u201d Ross said. \u201cThat doesn\u2019t mean there are no opportunities. I wouldn\u2019t want people to give up hope. Now is a good time for homebuyers because interest rates, although they\u2019re going up, are low comparatively … Even though the interest rates have risen, they\u2019re around 4%. My first home was about 11% in the \u201870s.\u201d<\/span><\/span><\/span><\/p>\n
Ross said first-time homebuyers have other advantages and opportunities they can take advantage of, including the State Housing Initiatives Partnership (SHIP) program, which she said will have more funding than last year, and downpayment and closing cost assistance programs, among others.<\/span><\/span><\/span><\/p>\n
\u201cPrices are only going up at this point,\u201d Holland said. \u201cIf you are on the fence and want to purchase, now is the time to purchase. It may be another five or six years or more before you see another dip in the prices.\u201d<\/span><\/span><\/span><\/p>\n
Investors target lowest-income areas<\/span><\/span><\/span><\/h3>\n
Overwhelmingly, the north and west areas of Jacksonville experience the highest rates of investor purchasing, with the 32209 ZIP code seeing 54% of homes going to investors. The area encompasses neighborhoods like Moncrief, Grand Park, Mid-Westside and New Town.<\/span><\/span><\/span><\/p>\n
Most of the homes in this ZIP code have some of the lowest-income residents in Jacksonville with a median annual income of just over $25,000, compared to a city average of about $55,000, according to the most recent U.S. Census Bureau data.<\/span><\/span><\/span><\/p>\n
Other investor-heavy areas for buyers include Arlington, Ortega, Springfield and West Jacksonville.<\/span><\/span><\/span><\/p>\n
\u201cWhen investors own your property, these are big corporations,\u201d Ross said. \u201cThey really aren\u2019t looking at you as a family or individuals. They\u2019re just looking at the market. It\u2019s very hard for a family in a rental unit owned by an unnamed corporate entity to have stability and to know that they are going to be able to afford a lease next year.\u201d<\/span><\/span><\/span><\/p>\n
As Jacksonville\u2019s population steadily increases, apartment occupancy follows, and rental prices increase, too. This makes people want to get into the market, Holland said. And the cycle of competition continues.<\/span><\/span><\/span><\/p>\n
\u201cPeople are willing to offer more to be able to get the home, and sellers are very interested in cash sales,\u201d he said. \u201cA lot of the investor market is cash sales and being able to buy the home quicker.\u201d<\/span><\/span><\/span><\/p>\n
For the appraiser\u2019s office, this means home values are changing more frequently as a result of the supply and demand.<\/span><\/span><\/span><\/p>\n
\u201cAt some point, the market will, as it always does, take a dip,\u201d Holland said. \u201cWe\u2019re not anticipating any time soon, but if interest rates go up, the demand may go down, and that may dip.\u201d<\/span><\/span><\/span><\/p>\n
Copyright \u00a9 2022 The Florida Times-Union. All rights reserved.<\/span><\/span><\/span><\/p>\n<\/div><\/div>\n
Go to Source<\/a>
\nAuthor: marlam<\/p>\n","protected":false},"excerpt":{"rendered":"
By Alexandria Mansfield Many buyers in Fla. and across the U.S. are feeling the impact of a lack of inventory, competition from investors and rising prices during their home search. JACKSONVILLE, Fla. \u2013 The process of buying a house can put your life on pause. There are so many things you can\u2019t do when going through the process of buying a new home. Free time can be absorbed by scrolling through Zillow listings or touring places with real estate agents. If you are relying on financing, you are advised not to make any other big purchases \u2013 like a car or furniture \u2013 during the buying process or open a new line of credit because it may affect your credit score. For Abby Denmark, she found herself wary of making any major changes while house hunting. She even postponed planning her wedding to her partner of four years, Ryan Norton, in order to focus their energy and financing on securing a place to live. That was a year ago. Denmark\u2019s story is similar to many in the country, but particularly those looking to buy homes in the Jacksonville area. Part of this trend is a lack of inventory on the market, according to Florida Housing Coalition CEO Jaimie Ross. Between labor shortage and supply chain issues, homes aren\u2019t being built as fast as they were in 2019 or 2020. Another part of the equation, however, is the record-setting rates at which investors and investment companies are buying homes. Last year, investors bought nearly one in seven homes sold in America\u2019s top metropolitan areas, the most in at least two decades, according to a recent Washington Post report. In the Jacksonville metro area, 22% of homes purchased were bought by investors. This is double the rate of the 11% of homes purchased by investors in 2015. Jacksonville is the No. 4 metro area in which investors bought the highest percentage of homes, following Atlanta and Chicago, at 25% each, and Miami at 24%. To those in the Jacksonville Real Estate Investors\u2019 Association (JaxREIA), an education and networking nonprofit with over 400 active members, it\u2019s a good time to be buying and flipping homes, said JaxREIA President Mike Grandjean. \u201cFor a lot of investors, the strategy is dictated by the time and the property,\u201d Grandjean said. \u201cNow is a pretty good time to be flipping property. You\u2019re still going to be having some people buying and holding [to rent], but I think the times kind of dictate that a little bit.\u201d Grandjean said investors are selling and renting at about a 50-50 rate right now, whereas in a more \u201cstabilized market,\u201d he typically sees closer to a 70-30 or 60-40 split in favor of investors buying property to rent it. \u201cNow is a good time to be flipping,\u201d he said, \u201cand that\u2019s not a bad thing for those first-time homebuyers.\u201d Grandjean described real estate investors as enhancing current inventory on the market so houses that might not qualify for financing meet the necessary standards. \u201cIt refreshes the market,\u201d he said. Unfortunately for those buyers, real estate is appreciating at nearly 20% a year, which can easily price people out of the market. Ross described investment purchases as \u201ca big part of the affordable housing crisis.\u201d \u201cThe best thing you can do is to get into stable housing,\u201d Ross said. \u201cI think it\u2019s only going to get harder. [Renting] is just not very stable.\u201d A year in the making As a first-time homebuyer, Denmark, 28, said the competition she experienced in the market had her teetering back and forth between wanting to purchase a home or settling on renting in order to live with her partner, Norton, who moved in with his parents after being priced out of his apartment in Riverside in December 2020. Denmark, a patient care technician at Ascension St. Vincent\u2019s Riverside Hospital, said it felt impossible to compete in the housing market at times because she and Norton work full time and couldn\u2019t tour homes fast enough. \u201cIt was disappointing too because Jacksonville is such a cool place and people who want to enjoy the culture and they\u2019re being priced out of it,\u201d Denmark said. \u201cYou could be the cruddiest house in the nicest neighborhood or the nicest house in the cruddiest neighborhood.\u201d At one point, the couple was so disheartened by the housing market that they considered finding a place to rent together instead and delaying their dreams of homeownership but decided against it because it would cost them more money in the long term. \u201cThe only way for middle-class Americans to accrue wealth is to buy a home and own property,\u201d said Norton, who works for a specialty medical equipment company. \u201cAnd renting for $2,500 a month… you\u2019re just never going to own that, you know?\u201d Denmark said she found it hard not to take being priced out of potential home purchases personally. \u201cIt\u2019s money,\u201d she said. \u201cLike this is our future, this is money to consider for my daughter. It\u2019s not like we\u2019re deadbeats, and somehow this market isn\u2019t wanting people like that to succeed.\u201d Norton said they looked in the Fruit Cove, Lakeshore and Ortega areas to find a family-friendly home with enough space for their artistic hobbies. He estimated that, on an average week for the last year, they would see 15 or 20 houses of interest and most of them were off the market again before they could even schedule a showing. \u201cThe few experiences we had where we were getting close were just so disappointing,\u201d Denmark said. \u201cThe house before this last house was like a bad breakup. Like no one compares to that house, and I don\u2019t even want to date anymore.\u201d A year after starting their home search, Denmark and Norton hope to close on their first property at the end of the month. Grandjean said he could see a clear effect this market and investment purchases were having on first-time homebuyers. \u201cYou\u2019re competing with not just mom and pop<\/p>\n","protected":false},"author":4,"featured_media":6349,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/6348"}],"collection":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/comments?post=6348"}],"version-history":[{"count":0,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/posts\/6348\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media\/6349"}],"wp:attachment":[{"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/media?parent=6348"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/categories?post=6348"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/nwfl4sale.com\/wp-json\/wp\/v2\/tags?post=6348"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}