By Gwinn Volen
Should buyers hold off in this crazy market? The two most important questions to ask are: a) will homes continue to appreciate and b) are mortgage rates going to rise. If the answer is yes to both of these questions, then purchasing now, even in this competitive space, is the smarter move.
Multiple offers are the new normal here in Northeast Florida and in other highly desirable areas. Buyers need to understand that they will likely pay more than they want to, and that it’s an incredibly competitive landscape where acting quickly is critical, as is a clean, well-executed offer with as few contingencies as possible.
As painful as that feels as a buyer, it is the new real estate reality. But, there is good news.
Everything points to this market continuing to appreciate
Nationally there was a home appreciation rate of around 10% in 2020 if you take the averages between all of the housing indexes. The national appreciation average is normally around 3%. Locally, there was a 17% appreciation rate for Ponte Vedra Beach over the last year, 11% for Nocatee, 12% in Jacksonville Beach, and a 10% appreciate rate if we look at Jacksonville as a whole.
Experts are predicting that appreciation will continue a predicted average rate of 5.9%.
Additionally, mortgage rates are expected to creep up over the next year. The below chart illustrates the cost of buying next year verses now with as appreciation and mortgage rate increases factored in.
Bottom Line for Buyers
If you plan to buy, it’s important to understand that home prices are going to continue to increase (hopefully at a slightly slower pace when it comes to buyers), and mortgage rates are likely to go up. This suggests there is no point in waiting this market out.
What Did February Look Like in Ponte Vedra Beach
February’s real estate numbers show more of the same. Inventory remains historically low and prices are up 17% over February 2020. Like many agents, my team has a large buyer pipeline and a much smaller than normal seller pipeline. We are continuing to see a very large number of relocations vying for the same properties which continues to drive prices up. We are also seeing locals who would like to sell, but are standing back as they have no landing place. The next few months as we move into spring should prove interesting.
- January Real Estate Report: Low Inventory and Frenzied Buyers
- December Real Estate Report: Market Continues on the Same Trend
- November Real Estate Report: Are We Headed Towards a Bubble?
- October Real Estate Report: The Market has Never Been Better
About the Author:
Gwinn Volen is a top ten ranking Jacksonville area real estate agent and owner of The Volen Group, Keller Williams Luxury International in Ponte Vedra Beach.