First Coast condo prices melting down
Condominiums are selling for far less, sometimes less than a third, of what they did a few years ago. Here are eight examples of recent sales.
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Palms at Marsh Landing #1624, 1701 The Greens Way
Sept. 2011: $72,000
2005: $220,000
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Merrill Pines Condominium #601, 7920 Merrill Road
Sept. 2011: $40,100
2006: $141,100
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Lantern Square at Kendall Town #E2202, 1141 Kendall Town Blvd.
Sept. 2011: $49,000
2006: $159,000
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Lakecrest #2201, 10150 Belle Rive Blvd.
Sept. 2011: $29,500
2006: $165,000
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Deerwood Place II #348, 4480 Deerwood Lake Pkwy.
Sept. 2011: $170,000
2005: $371,500
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Cottages at Argyle #501, 8550 Argyle Business Loop
Oct. 2011: $69,000
2006: $186,800
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Preserve at San Jose #192, 8849 Old Kings Road S.
Sept. 2011: $30,000
2007: $141,9000
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Plaza Condominium at Berkman #402, 400 E. Bay St.
Sept. 2011: $83,000
2005: $248,900
First Coast condo prices melting down
By Roger Bull jacksonville.com Copyright 2011 The Florida Times-Union.
On Old Kings Road, a condo that sold for $141,000 four years ago recently went for $30,000.
On Belle Rive Boulevard off Southside, one that went for $165,000 five years ago just sold for less than $30,000.
Downtown at Berkman Plaza, two condos recently sold for about a third of what they did a few years ago.
It’s a scene repeated all over town. As badly as the prices for single family homes have dropped, condos and townhouses have dropped far faster.
Read more coverage of real estate around the First Coast
According to the Northeast Florida Association of Realtors, the median selling price for single family homes in this area peaked at $210,000 in August 2006. As of Thursday, the median selling price was $135,000, a drop of 35 percent.
Meanwhile, condos and townhouses peaked in July 2006 at $182,500. As of Thursday, the median price was $67,000, a drop of 63 percent.
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The market is being hit in virtually every direction: A glut of condos built in the past decade and prices that went too high too quickly, followed by large numbers of foreclosures that have made so many units available at what would have been considered giveaway prices a few years ago.
On top of that, few people can actually buy them.
“They’re just very difficult to sell,†said Shelba Williams with Watson Realty, “because the majority are not FHA approved. Sometimes you can’t even get conventional loans.â€
She said the banks look at how many renters are in a complex. If it’s at least 50 percent, they won’t make a loan.
If 15 percent of the units are behind in their association fees, they won’t make the loan.
“You can’t get a loan at all on apartment conversions,†she said. “And up and down Southside Boulevard, a lot were conversions.
“It has to be cash,†she said.
That means a lot of buyers are investors with cash. They, in turn, rent the units out, which makes it that much harder for conventional loans.
“It’s a vicious cycle,†Williams said.
Alan Dimond is a Miami real estate attorney who owns 24 units in Lantern Square at Kendall Town, a condo project that sits across the parking lot from the Regency Walmart.
The three he’s purchased since September have gone for $49,000, $70,000 and $73,000.
Those are 31 percent to 44 percent what they sold for new in 2006 and 2007.
He’s renting them with the hopes that prices will increase.
“It’s a particularly nice project,†Dimond said. “It’s new construction, a nice location. I just think it’s going to pick up.â€
Will the prices get back to where they were five or six years ago?
“Not in my lifetime,†he said. “If I’m looking at the horizon of five years, I don’t see it turning around by then. And I don’t see anyone else betting on that.
“But I’d be very surprised if it hasn’t started to turn in 10 years.â€
Taylor Middleton is also starting to build his own collection of condos. He’s got four of them, three on River Hills Circle off Atlantic. He bought the last one in September, a waterfront unit on Pottsburg Creek, for $60,000. That’s $90,000 less than it sold for seven years ago.
His parents live in that one, and he rents out the others, including the $17,000 unit just down Atlantic in Creekside. That one was listed at $86,000 seven years ago.
Middleton couldn’t get a bank loan for any of these. He said it’s because he’s an artist with no steady stream of income.
He’s also 21 years old and doesn’t graduate from Jacksonville University until May.
“Now’s the time to buy,†he said. “And there’s no reason for me to try to sell; the rents cover the mortages. I need to find more to buy.â€
Matt Coleman of Remax Atlantic has studied the sales data over the past several years and said while prices are still dropping, the rate has slowed.
“We’re not hemorrhaging at the levels that we were,†he said.
But the biggest problem in the condo market, he said, is the number of distressed properties, both foreclosures and short sales.
“A property owner who isn’t in trouble has to compete with that same buying pool,†he said.
And those owners often can’t drop prices low enough to compete.
“So it’s the homes that are not distressed that are sitting empty the longest,†he said.
He said that in 2005 and 2006, investment groups were buying large numbers of condos sight-unseen straight from the developer. When the market fell apart, they just dumped.
And there’s more out there.
“The elephant in the room is the shadow inventory,†Coleman said. “Lenders are holding on to so many that they’ve foreclosed on but haven’t released.
“If they dumped them all on the market at once, you’d have a complete real estate collapse.â€
roger.bull@jacksonville.com, (904) 359-4296
Read more at Jacksonville.com: http://jacksonville.com/business/real-estate/2011-11-12/story/first-coast-condo-prices-melting-down#ixzz1dhs7Yjio
I'm still trying to figure out how a mobility fee moratorium to encourage more building is supposed to alleviate this problem.
I think a lot of people guessed this back during the "condo craze." I know my family was adamant that most of the newer condos in town were not going to hold their value (especially Kendall Town - not that living in a Wal Mart parking lot isn't luxurious.......).
I know a couple people with condos who are desperately trying to get them rented, without much luck.
I guess the upside is, renters have a lot more power than they used to....
Quote from: thelakelander on November 14, 2011, 02:02:28 PM
I'm still trying to figure out how a mobility fee moratorium to encourage more building is supposed to alleviate this problem.
stop asking questions...nothing to see here...move along now :)
I think settling into a reasonable equlibrium may be a more appropriate way to look at it. In a city where the supply seemingly far outweighs the demand, it would seem that the prices still have a ways to drop as well. The continued building is only going to drive existing prices down (obviously). Unless you can find a real steal, Jacksonville is a hell of a city to rent in right now.
Quote from: KenFSU on November 14, 2011, 02:23:08 PM
I think settling into a reasonable equlibrium may be a more appropriate way to look at it. In a city where the supply seemingly far outweighs the demand, it would seem that the prices still have a ways to drop as well. The continued building is only going to drive existing prices down (obviously). Unless you can find a real steal, Jacksonville is a hell of a city to rent in right now.
Construction costs aren't decreasing at nearly the rate that condo prices are. it makes no sense to build more. Unless you bring a truly innovative product to a desirable part of town that meets an unmet need of the current market, it's not worth even trying to build. A project like that hasn't happened in a while.
Hopefully some of the worst developments of the condo boom will die off and allow for those renters to relocate to better planned and better located developments in town.
So it's virtually impossible to get a loan on most of these condos right? If i'm paying 800 in rent, and I can snag a condo for 60-100k on a 30 year loan, i'd strongly consider that because it seems you get way more space for your money buying vs renting. But they dont give out loans easily soooo unless I have 60-100k to shell out, I take it i'm not snagging one of these ridiculously cheap condos.
Quote from: David on November 14, 2011, 04:40:16 PM
So it's virtually impossible to get a loan on most of these condos right? If i'm paying 800 in rent, and I can snag a condo for 60-100k on a 30 year loan, i'd strongly consider that because it seems you get way more space for your money buying vs renting. But they dont give out loans easily soooo unless I have 60-100k to shell out, I take it i'm not snagging one of these ridiculously cheap condos.
In a sense, yes you could.. but rental prices are down as well. I live in a 2,627 square foot home with a 3 car garage on a little over an acre of property. I rent it @ $680.00 /monthly. The home at one time rented @ $1,200.00 month. I do not pay for property taxes, upkeep, repairs, condo fees , neighborhood dues, live in a deed-restricted area, etc. I do take care of the grass and of course keep the home in great shape as though I owned it. For the deal I feel I get, that is the least I can do .
I guess it depends on what makes one comfortable. I know of no place I could get a deal like I have now. As long as it is available, I am staying where I am .
That said, some of the condo prices as shown above are at give-away prices. Wait 6 months. They will be even less.
Quote from: Captain Zissou on November 14, 2011, 03:37:19 PM
Quote from: KenFSU on November 14, 2011, 02:23:08 PM
I think settling into a reasonable equlibrium may be a more appropriate way to look at it. In a city where the supply seemingly far outweighs the demand, it would seem that the prices still have a ways to drop as well. The continued building is only going to drive existing prices down (obviously). Unless you can find a real steal, Jacksonville is a hell of a city to rent in right now.
Construction costs aren't decreasing at nearly the rate that condo prices are. it makes no sense to build more. Unless you bring a truly innovative product to a desirable part of town that meets an unmet need of the current market, it's not worth even trying to build. A project like that hasn't happened in a while.
Hopefully some of the worst developments of the condo boom will die off and allow for those renters to relocate to better planned and better located developments in town.
I agree. A lot of these places aren't worth living in & have no real value. Its just like the cookie cutter suburbs I live in that's full of homes put together with scotch tape & bubble gum. Its all fake manufactured crap & leftovers of a boom age that went way overboard. None of its connected, walkable, planned well, you need a car just to walk out your front door, huge lawns that serve no purpose but taking up space & being a mowing headache, etc. It's basically cow pastors someone bought out in the middle of nowhere & wanted to get rich off of, all the while the city core has buildings you can see through. How does that make sense??
I really think as time goes on, the boomers start getting up in age & we get deeper into this, you're going to see these areas start to fall just like the city cores did back in the day. Younger generations absolutely do not want this type of lifestyle. The housing crisis will only accelerate it.
Rental prices are coming down, too? Damn Jacksonville is getting sooooo cheap.
The opposite is happening most other cities where rental prices have escalated and are continuing to do so (there was a dip right as the recession hit, but this year due to high demand and lack of new supply most cities are back to where they were with rental prices or even higher).
I know there is a glut of every real estate product in Jacksonville, but many other cities faced even more extreme gluts and have since recovered. Sounds like nobody is moving to Jacksonville anymore :(
Quote from: Captain Zissou on November 14, 2011, 03:37:19 PM
Quote from: KenFSU on November 14, 2011, 02:23:08 PM
I think settling into a reasonable equlibrium may be a more appropriate way to look at it. In a city where the supply seemingly far outweighs the demand, it would seem that the prices still have a ways to drop as well. The continued building is only going to drive existing prices down (obviously). Unless you can find a real steal, Jacksonville is a hell of a city to rent in right now.
Construction costs aren't decreasing at nearly the rate that condo prices are. it makes no sense to build more. Unless you bring a truly innovative product to a desirable part of town that meets an unmet need of the current market, it's not worth even trying to build. A project like that hasn't happened in a while.
Hopefully some of the worst developments of the condo boom will die off and allow for those renters to relocate to better planned and better located developments in town.
No the City Council told me we should encourage more construction and waive any impact fees(see Mobility Fee Moratorium) and it would be 90s sprawlville joy.
Decline in both property value and rental prices is happening too in SW Florida, where my father-in-law lives, and in Tampa. And SW Florida is growing even faster than Jacksonville is, though Tampa-St. Pete has been slower. I think we all know what's at play here.
Quote from: peestandingup on November 14, 2011, 07:29:57 PMYounger generations absolutely do not want this type of lifestyle.
You would think that's true. However I know several people who have proven otherwise. I scratch my head.
Quote from: Captain Zissou on November 14, 2011, 03:37:19 PM
Construction costs aren't decreasing at nearly the rate that condo prices are.
Construction costs can't really decrease any further. We've been at rock bottom and are finally starting to see an increase back to normal levels.
Not all condos are decreasing in value. The Lofts at 1951 Market have seen an incease in price per square foot in recent sales. The Lofts are also FHA approved, which means homebuyers can purchase with 3.5% down.
Quote from: acme54321 on November 15, 2011, 08:54:12 AM
Quote from: peestandingup on November 14, 2011, 07:29:57 PMYounger generations absolutely do not want this type of lifestyle.
You would think that's true. However I know several people who have proven otherwise. I scratch my head.
The continued draw of Southside and similar areas in other cities proves that this statement is too broad to be totally accurate. But I think it's fair to say that a desire for urban-style living is more common among the current young crop than it is in other age groups (including when those older folks were young themselves).
It's also clear that the post-war suburbs will decline like the the nation's inner cities did in the 50s and 60s. Just look at Arlington to see it already happening in Jax. The thing is there are plenty of cities that have revitalized their inner cities, and I think we're making positive steps there. But no one in the country really knows what to do with decaying suburbs, and unfortunately Jacksonville, and all of Florida, has a ton of those.
^+1 that is absolutely true. In general, home sales in the urban core haven't slowed down. Prices have come down, but we are still seeing plenty of buyers. Lots of first time home buyers and families with children who want to live in urban settings and not in the suburbs. This is the trend for the future. Continuing to build totally new instead of infill and redevelop just isn't a sustainable model of growin cities for many many reasons and people shopping for homes are agreeing with this.
Quote from: Tacachale on November 15, 2011, 10:04:44 AM
Quote from: acme54321 on November 15, 2011, 08:54:12 AM
Quote from: peestandingup on November 14, 2011, 07:29:57 PMYounger generations absolutely do not want this type of lifestyle.
You would think that's true. However I know several people who have proven otherwise. I scratch my head.
The continued draw of Southside and similar areas in other cities proves that this statement is too broad to be totally accurate. But I think it's fair to say that a desire for urban-style living is more common among the current young crop than it is in other age groups (including when those older folks were young themselves).
It's also clear that the post-war suburbs will decline like the the nation's inner cities did in the 50s and 60s. Just look at Arlington to see it already happening in Jax. The thing is there are plenty of cities that have revitalized their inner cities, and I think we're making positive steps there. But no one in the country really knows what to do with decaying suburbs, and unfortunately Jacksonville, and all of Florida, has a ton of those.
All great points that I agree with. And it was a pretty broad description, but I think it holds true for the most part. But I also don't think Jax is a good model city for determining this shifting trend. It is to some degree, but the core numbers (specifically downtown) have remained pretty flat. I don't think its because a lot of people here (especially younger gens) don't want that type of lifestyle, but because living down there really doesn't have many benefits & isn't worth the price (something Lake touched on in another thread on why he didn't live down there).
The point is, Jacksonville really isn't giving anyone a reason to move downtown & the city has to do better if they want folks down there. People simply won't move there if there isn't many incentives to & if you don't get many "big city benefits" (walkable & connected throughout with a solid focus on pedestrians, good public transit, bike lanes throughout, good groceries, markets, shopping, drug stores, etc so one could sustain themselves there nearly full time, etc etc) Its getting better, but its not there. And with many businesses, offices, etc relocating to southside's "downtown" (yuck!), that's probably why some younger folks are choosing it over downtown.
I acutally would like to move downtown, however it is too expensive for the most part. If I can find something in MY price range, I would definately move downtown.
There are some great deals in Springfield! it's not Downtown per se but close enough.
Quote from: fsujax on November 15, 2011, 01:28:23 PM
There are some great deals in Springfield! it's not Downtown per se but close enough.
I wish I knew exactly where. But honestly, I have not put alot of effort into it either. My lease renewal in my apartment is coming soon. I just may renew a 6 month and search for a apartment/condo in the core.
duvaldude08, Springfield and Riverside both have some great deals right now. If a condo/loft interests you, the Lofts at 1951 Market are a good place to start because the mortgage would be similar to the rent paid, so they are a good way to get in. If you prefer a house, there are tons of great deals right now too. Several great renovated homes in SPR and Riverside can be purchased for close to what you would pay in rent.
If you want someone to help you figure out what you are comfortable affording and what that would translate to in a price, just pm me and let me know. I am a Realtor and I specialize in the urban core, which is way more than just downtown
Quote from: avs on November 15, 2011, 02:13:16 PM
duvaldude08, Springfield and Riverside both have some great deals right now. If a condo/loft interests you, the Lofts at 1951 Market are a good place to start because the mortgage would be similar to the rent paid, so they are a good way to get in. If you prefer a house, there are tons of great deals right now too. Several great renovated homes in SPR and Riverside can be purchased for close to what you would pay in rent.
If you want someone to help you figure out what you are comfortable affording and what that would translate to in a price, just pm me and let me know. I am a Realtor and I specialize in the urban core, which is way more than just downtown
Great! Im sending you a message now.
What i think is aweful that if someone wanted to they could walk into an office and get whatever building permit for as many condo's he or she wanted to build and put them just about anywhere they wanted to put them....no thought...no prudence...just build build build...and now look what we've got...it's a shame when there are some nice houses out there selling for $10k........it's nuts.
Quote from: Garden guy on November 15, 2011, 03:06:13 PM
What i think is aweful that if someone wanted to they could walk into an office and get whatever building permit for as many condo's he or she wanted to build and put them just about anywhere they wanted to put them....no thought...no prudence...just build build build...and now look what we've got...it's a shame when there are some nice houses out there selling for $10k........it's nuts.
Thats basically what's happened here for decades. No sort of plan or vision whatsoever, no boundaries, just build wherever & outward as much as you want. Its really screwed things up a lot here & isn't gonna be something that's easily fixed.
Quote from: peestandingup on November 15, 2011, 03:31:00 PM
Thats basically what's happened here for decades. No sort of plan or vision whatsoever, no boundaries, just build wherever & outward as much as you want. Its really screwed things up a lot here & isn't gonna be something that's easily fixed.
The small gears link up to the big ones. The engine of destruction starts with home mortgages linked to financial derivatives matching up to credit default swaps: leveraging small errors into a blizzard of money raining billions in compensation. It all depended on speed of execution.
The evidence in Florida piles up. It manifests through the carnage of housing markets, especially where low-cost, production housing turned wetlands into petri dishes for the particular culture of suburban sprawl. In South Florida, the last fumes of the housing boom consumed vast acreage in former Everglades wetlands. Its results permanently etched the landscape as lifeless ghost suburbs where foreclosure rates have soared. They were pushed through local zoning and permitting processes as "what the market wants". In fact, they were what the financial markets could sell to gullible and greedy investors, seeking better return with risks comparable to government bonds.
The insatiable demand for financial derivatives tied to mortgages was met by willing suppliers: builders and developers, lobbyists, traffic engineers and planners. Everyone needed to execute quickly, carelessly and rampantly. At public hearings in Florida, at the base rung of the step ladder of approvals for planned developments, dissenters during the run-up of the housing boom were relentlessly opposed 99 percent of the time.
Today Florida has the one of the highest foreclosure rates in the nation. And still in local and stage legislative arenas, demagoguery persists that land use and environmental regulations, such as those that protect wetlands, are barriers to job creation. It is the mantra of Republicans mainly: knock down regulations as fast as possible so the scrapers, the bulldozers, and stick frame and particle board can fly off the shelves the way they did in 2004.