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Ssehra, Home Buyer in 32256

Why are prices for condos so low in Jacksonville, FL?

Asked by Ssehra, 32256 Sun Jun 10, 2012

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I'm working on a couple condo sales from the buyer's side and Sharon didn't leave any details out. It doesn't matter if a buyer has a credit score of 800 with great income since most COMMUNITIES don't qualify for the loan approval. Just remember with condos the lender must qualify the buyer as well as the community they are interested in. This makes it difficult but not impossible to acquire financing without a high downpayment portfolio loan. Some sellers are keeping the prices low to help attract CASH buyers. Please contact me with any other questions~

Jeff Metcalf, REALTOR(R)
Watson Realty Corp.
(904)495-0115
http://www.Realty2Reality.com
0 votes Thank Flag Link Mon Jun 11, 2012
Hi Ssehra,

Sharon is right on the money like usual. When she comments I learn something new. :-) As Sharon mentioned it's hard for most to acquire a loan to purchase so prices have dropped hard. If you have some cash it's a great investment.

Have a Great Day

John
0 votes Thank Flag Link Sun Jun 10, 2012
Hi Ssehra,

It is practically impossible to get financing for condos in most communities right now, so the prices have dropped dramatically because the supply is so great.

Many developers of condos and condo conversions did not apply for FHA eligibility, so those units were never available for FHA or VA loans. Today, FHA and VA loans are the majority of loans, so most buyers couldn't get a loan for a condo even if they still had their eligibility.

The other problem is that those that did have FHA eligibility have lost it. They lose it when a certain percentage of owners are behind in their HOA dues and when there are too many non-occupant owners.

That's another reason the developers didn't apply for FHA - they wanted to sell to as many investors as they chose to and not be limited by FHA guidelines.

That leaves conventional loans and if you can get one, they require 30% to 50% down.

Between no FHA/VA, high conventional down payment and the risk of the condo association not being able to take care of the property due to lack of funds, buyers are wary and prices have plummeted way beyond what single family homes have.

We are actually seeing some leveling out in condo prices because they are so incredibly low and the supply is way down from what it was a year ago.

Hope this helps! If there is anything else we can help you with, give us a call at 904-673-2308.

Sharon Alters
Coldwell Banker Vanguard
904-673-2308
sharon@teamalters.com
0 votes Thank Flag Link Sun Jun 10, 2012
Therefore it's a great time to take advantage of low prices if condos are for you. We don't necessarily tell people prices are at bottom, and the market varies by town, area, and complex. But it's hard for some condo prices to go any lower because cash buyers compete for the best deals, and rents yield nice cash flow returns. I'm available to help. -Steve Henrickson, steve@iLoveThatHouse.net
0 votes Thank Flag Link Sun Jun 10, 2012
Of course, it's not just in Jacksonville. Some cities have seen even more dramatic price decreases. Part of the root cause is the same as that for the overall real estate market: government pressured banks to increase home ownership and make loans that they shouldn't have, financial institutions did so, plus there were both predatory and foolish loans. Speculators and everyone else in real estate wanted in on the boom. On the secondary market for mortgages, those were bundled as always, but those bundles were not as safe, so they were put into instruments called derivatives. Some people in Congress and President GW Bush cautioned against mismanagement at Fannie Mae & Freddie Mac, but people like Barney Frank and Chris Dodd and others said it wasn't true or even that the warnings were racist or racially motivated. Wall Street failed to properly evaluate the risks as well and many there just wanted to take advantage of the boom. When the crash occurred, booming states like Nevada, Florida, California and Arizona were hardest hit. Condominiums had been over-built relative to demand, and most condo purchases cannot be financed with FHA loans now. Since most condo buyers need FHA loans and for all the other reasons and more, condo prices fell hard.
0 votes Thank Flag Link Sun Jun 10, 2012
Which Condos?

Price range of condos in Jax is a huge! Are you looking at the $25,000 range or the 2,500,000 range?
0 votes Thank Flag Link Sun Jun 10, 2012
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