Suburban death, Springfield rising

[zoo]

http://www.jacksonville.com/tu-online/stories/112108/met_358274583.shtml

38.9% Mandarin homes purchased since 2003 have negative equity (most); 16% 32206 homes purchased since 2003 have negative equity (least). Seems those urbanites are on to something.

[MattnJax]

Look at Port St. Lucie - Ft. Pierce. Homes are down a whopping 58.3% and Miami - Ft. Lauderdale is down 47.9%. That's just amazing. My zip (32205) is down only 27.3%. Sweet! (not)

[JaxByDefault]

That map takes in 32206 as a whole. I would wager that most of the properties in 32206 with negative equity that have turned over in the last 5 years are in Historic Springfield. Anyone who here bought in 2005 and 2006 --whether investor or homeowner -- has been hit particularly hard. Other 32206 properties in trouble would be homes outside of the historic district (predominantly belonging to elderly and low-income residents) that fell prey to second mortgage, reverse mortgage, and debt consolidation products.

The house next door to me was on the market for $259k when we bought our house. Two years later, it is back up for sale for $189k. It was fully reovated in 2004 and has several upgrades. That's quite a hit. It will all come back up, but over many years and at a slower rate than before.

My point is, this statistic is skewed and cannot be said to represent investments only in Historic Springfield. There are several indications that Historic 32206 is only marginally better off than the some of the 'burbs. Also, out of 32206, I would venture to guess that Historic Springfield homeowners -- but not investors or flippers -- are more likely to have qualified for traditional mortgage products and are not buying their first home. This insulates the area bit through the downturn.

In the long run, revitalization of cities, higher energy costs, and a desire for more sustainable living should help in-town areas.

[alta]

The people that have negative equity were the people that bought into the idea that home prices were going to continue to rise 25-50%/year in 2005-2006 after home prices doubled in a five year period.  I don't feel sorry for them especially since most of them couldn't afford what they were buying and used exotic mortgages.  I was casually looking at the urban core in these years and refrained from buying.  Anyone with any basic understanding of economics or past real estate cycles could have figured out that.  Thanks government for the community reinvestment act.  I bought my house in may for 40% lower that it was originally listed for in 2006.   

[77danj7]

Our house has been hit incredibly hard...Valued over $250K just two years and recentle appraised for $134k!
And that is on a completely renovated portion of street on Market St.

[Joe]

Slightly off topic ... but how the hell is 32256 considered "Mandarin" ??

Mandarin was originally entirely within zip code 32223. It wouldn't be that unreasonable to include some areas from zip codes 32257 or 32258, but even that is pretty far reaching.

I understand that real estate developers have expanded the definition of Mandarin over the years. However, I'm scratching my head at how the public perception of the term has apparently come to stretch that far!

[JaxByDefault]

The people that have negative equity were the people that bought into the idea that home prices were going to continue to rise 25-50%/year in 2005-2006 after home prices doubled in a five year period.  I don't feel sorry for them especially since most of them couldn't afford what they were buying and used exotic mortgages.  I was casually looking at the urban core in these years and refrained from buying.  Anyone with any basic understanding of economics or past real estate cycles could have figured out that.  Thanks government for the community reinvestment act.  I bought my house in may for 40% lower that it was originally listed for in 2006.  

This is a stridant point of view I would be hesitant to throw around at a Springfield cocktail party unless you are bent on insulting half of your neighbors.

And what say you to all of the people out there whose debt ratio is under 30%,  have a 30 yr. fixed mortgage, and a 20% down payment, but whose homes have lost over 30% since they bought? Why judge others so harshly?

The market is what it is. Hopefully, most people will be able to weather it.

Our house has been hit incredibly hard...Valued over $250K just two years and recentle appraised for $134k!
And that is on a completely renovated portion of street on Market St.

Sorry, to hear that, 77danj7, especially if it's a fully renovated home. The same thing is happening to a lot of people here.

[uptowngirl]

Appraisals are being impacted by foreclosures; here in Springfield we have had many, many foreclosures that while bad for us (home value wise) are good in some cases as it gets rid of the flippers. Unless you have no choice or just need the money I would not borrow or selling right now. Give it a year or two to work out all the foreclosure deals.

[JaxByDefault]

Lower valuations of unrenovated homes may also help make renovations more affordable. It is much more cost effective to start with a $35k home that needs $150K worth of work than it is to start from an overpriced $120k home in need of $150k of work.

For those with the cash to invest, as construction loans are scarce, it is a good time to get in to Springfield and renovate. The cost of fixer-uppers is lower and contractor pricing is highly competitive. Same is true for fixing commercial spaces.

For those of us in already renovated homes...we're probably not going anywhere for a while.

[alta]

It's ironic how the free market system works.  Two things that drive it are greed and fear.  We see the two extremes occasionally.  We have seen both in the last few years.  Unless you are selling the appraisal is on paper.  If anything currently you would benefit from this by having lower property taxes.  I know this is the case on my condo in Baymeadows.  The taxable value has gone down $30,000 in the last two years.   Why would I bring that up at a cocktail party?  Are you going to be at the cocktail party next Thursday?  Maybe we can debate this in person.     This is a thread specifically about the current real estate market in Jacksonville.  From the data that I have seen Springfield is the only place in Jax that still has a rising price per sq ft.,  SRG had it's best quarter in company history at the end of last year.  There is still a lot of renovation.  Our area has the lowest percentage of homeowners with negative equity.  Give it time.  The property values here will stabilize.  As uptowngirl stated a lot of the downward pressure is from the foreclosures.  The homeowners that came in and bought a home for $100k, spent 25k on improvements and are trying to sell for $250k are forced with reality now.  Once these properties are sold things will improve.  The credit conditions now are not conducive for such speculative activity.     

[downtownparks]

I have believed that the housing downturn has been oddly good for Springfield for the last year or so. Its been great seeing all of the houses that got flipped over and over and over finally land with someone working on it.

[Springfield Girl]

I agree with Downtownparks that the downturn has been good for Springfield in many ways. As for buyers who purchased during the boom, yes they paid more for their homes but in many cases they walked away with a large amount of equity when they sold their previous homes. It's all relative. I would think that those hit hardest would be the buyers that bought their first home or investment property during that time. As far as investments go, people will always want to own land and they're not making any more of it. This too shall pass.

[Bill Hoff]

Very true.

[BackinJax05]

In spite if its problems, 32206 is a pretty cool place.

[DDC]

In spite if its problems, 32206 is a pretty cool place.

+ Infinity