By Gwinn Volen
2021 was a year to remember in real estate. Median home appreciation in Ponte Vedra Beach was up 25% over the last 12 months. To put this in perspective, typical annual home appreciation is around 3-5%. In other nearby areas, Nocatee home prices went up a median of 22%, while Atlantic Beach saw a 30% jump. Jacksonville Beach and Neptune Beach were more in line with the greater Jacksonville median increase of 18%, which is still impressive.
As we roll into 2022, I wanted to address some common questions about our real estate future and touch upon others that arise quite often as buyers and sellers enter the real estate market.
Will We See a Real Estate Market Slowdown in 2022?
Analyst consensus suggests we will see a slight slowdown due to work from home options, buyer fatigue, and increasing mortgage rates. Chief Economist for the National Association of Realtors Laurence Yun, said that even though there may be a decline in sales in 2022, he still forecasts home sales will outdo pre-pandemic levels.
For our area, I would say it’s unclear if we will see much of a slowdown. I do think we will see more housing inventory as a natural part of the real estate sales cycle. And as mortgage rates tick up it will change the dynamics of what buyers can afford.
However, the greater Jacksonville area is more popular than ever, ranking #2 in a study by Zillow on the hottest housing markets in the US.
Is It True That Most Homes are Going for Over List Price?
In the interest of efficiency, I’m picking two areas to look at: Ponte Vedra Beach and Nocatee. In 2021, 27% of sold homes in 32082 and 43% of sold homes in 32081 sold for over asking price. Here is the breakdown for single family homes.
In Ponte Vedra Beach, the average list:sold ratio is 100%. This means, on average, homes sold for list price (asking price). But remember that is the average. 27% of the 649 homes sold in 32082 sold for over asking price with an average over-ask price of 5%, and a high of 20% over asking price. 41% sold below the list price with the average in that group selling for 95% of the list price, and a low of 80%. In both of the extreme cases, there was a pricing issue, in my opinion. This means 32% of the homes in 32082 sold for full price.
Homes in Nocatee had an average list:sold ratio of 100% as well. 43% of the 600 single family homes (resale) sold for above asking with an average of 4% over asking and a high of 17% over asking. 29% of the homes sold for under asking with a low of 87% of list price and an average of 97% of list price. This means 28% of the homes in 32081 sold for full price.
Bottom line, buyers will need to roll into the new year with a competitive spirit and a solid understanding of the dynamics of the offer process. The higher price points sometimes show more flexibility as they can be tougher to price, but not always. You can find more info on over asking offers and low inventory in the real estate market here. Curious if over asking offers are the new norm? Click here for great details on what you can expect!
What is the Most Competitive Market Segment?
Loosely, it’s the $900,000 to $1.1M range in Ponte Vedra Beach and the $550,000 to $700,000 price range in Nocatee.
For this, I looked at the subsets of sales that closed above the asking price. In Ponte Vedra Beach, the average sold price in the over-asking group was $1,077,000. With the $1M price point being competitive, buyers should be prepared and ready to bring their highest and best offer. Of course, in Ponte Vedra Beach you can be certain that anything below $1M that is smartly priced will result in multiple offers as well.
In Nocatee, the average sold price for above asking closed sales was $638,000. Buyers in the $500,000 to $700,000 price range need to understand the landscape and be prepared. In this price segment, the list price has become something of a starting bid.
Is 2022 a Good Time to Sell a Home?
Of course. Housing inventory is at an all-time low at 1.3 months worth of inventory. What this means is there is little competition and a backlog of hungry buyers.
One thing sellers must think about though and plan for, is the next step. If you are selling purely for the gain, have a plan in place for your next step. Without one, it’s stressful. If you are relocating, you are golden, and get ready to make hay.
Should I Test the Market With A High Price Just to See Who Is Out There?
No! In this market there is no need to try and push the price somewhere that causes an eyeroll. Rest assured, if the market will tolerate a higher price, you WILL see above asking offers. As noted above, Ponte Vedra Beach saw over-asking offers on 27% of the home sales in 2021, and the highest over asking offer was 20% over the list price.
My professional opinion is to list within the comparables range and then see what happens.
Let the market come to you. Don’t drop to the market.
Is Selling Off-Market, AKA Going Pocket Listing, a Good Strategy?
There is no good data on this but I would say 95% of the time sellers are better off putting their homes on the open market. There are close to 10,000 agents in NE Florida with new agents every day. Each of those agents is wrangling buyers in the hopes of making a sale.
By privately listing your home you are grossly reducing the number of eyeballs on your property. And, with the new high level of interest in our area, you are likely heavily limiting your buyer pool.
When does it work? An off market sale can sometimes benefit the seller when a buyer feels like they have the first “in” on a property. Occasionally you will see a buyer offer a silly price just because they feel like they are winning something special. To be clear, this is the exception, not the rule. It isn’t recommended unless a seller as a personal reason for not wanting maximum exposure and top dollar.
What Does An Ideal Offer Look Like?
An offer with the fewest contingencies and the highest price almost always wins. As a listing agent, things I counsel my sellers and buyers to consider are:
- Strong Binder Deposits: 2-3% is nice and solid, but bigger is better if a buyer feels very confident in the property.
- Cash or No Financing Contingency: Most sellers understand that buyers want to take advantage of low interest rates, so a financing offer is not always a bad thing. What I want to see as a listing agent is the removal of loan contingencies – no loan approval period needed and no appraisal contingency. This is a signal to the seller that they buyer is committed and ready to purchase and is so confident in their ability to acquire a loan, contingencies aren’t required.
Of course, this means the buyer needs to be truly confident in their eligibility for a loan and/or their ability to bring cash to closing if the property doesn’t fully appraise. Lenders will only lend on the total appraised value. In this market there is always a chance a property won’t appraise as there aren’t yet closed comparable sales. So, the buyer needs to be prepared to close the gap if there is a lower value associated to the property by an appraiser.
- No Repairs: Repair requests have been known to kill many a deal. Buyers want to move in with no headaches. But sellers don’t want to be bothered either. The best offer will likely be an AS IS offer. Sellers aren’t usually bothered by inspections, but a list of handyman items can raise blood pressure.
Are There Any Homes Under $500k in Ponte Vedra Beach?
Yes, but the inventory is limited.
The median sale price in 32082 for 2021 for a single family home was $938,750. So, while the bulk of the homes in PVB are at luxury price points these days, there are options.
Best neighborhoods to focus in on in the under $500,000 range for a single family home are: L’Atrium, Dolphin Cove and Marsh Cove.
Here are some of the recent sales under $500,000.
What Kind of Property Taxes Should I Expect to Pay When I Purchase?
Property taxes are ALWAYS based on your purchase price, so the current property taxes are irrelevant. To get an estimate on property taxes in St Johns County, click here. For Duval County, click here.
One wonderful property tax benefit we have here in Florida is property Homestead and property Tax Portability. The articles linked will provide important information on long term tax savings.
Who Owns the Brunt of Closing Costs?
Typically in NE Florida, the seller covers the bigger ticket closing costs. This means the seller, in most cases, pays for Owner’s Title Insurance. Other typical seller costs are Deed Stamps (a tax the seller pays to the State of Florida for selling the property), and real estate commissions. These costs can be on the buyer side, but it’s pretty unconventional.
Buyers are responsible for the recording of the deed, which is a nominal fee; inspections; and any fees associated with securing financing.
About the Author:
Gwinn Volen is the owner of The Volen Group, Keller Williams Luxury International a top producing real estate team in Northeast Florida with annual sales of over $100M.