Seldom is any situation perfect. And such is the case with the real estate market in Southeast Jacksonville. The pace of sales is very impressive. Prices have stabilized and in some pockets are beginning to rise. Mortgage rates are at record lows. So what is not to like?
We are running out of inventory! Many homeowners remain underwater on their mortgages and cannot afford to put their homes on the market because of the substantial amount of money they would need to bring to the closing table. Often it is forgotten that a “short sale” is defined by both an underwater mortgage AND the inability of the seller to make of the deficit. There are a large number of people who indeed have the ability to cover a shortfall but are disinclined to do so because it would substantially diminish their net worth.
For those that do qualify for “short sale” status, now is the time to act. Through the end of this year sellers most often have no income tax obligation for a deficit forgiven by the bank in a foreclosure, short sale or principal reduction. However, the Mortgage Forgiveness Debt Relief Act of 2007 that provides this benefit will sunset December 31st of this year. A bill called the “Homeowners Tax Fairness Act” was introduced in March that would extend the tax debt forgiveness program through 2015. But it requires congressional approval that is uncertain.
The good news is that the diminished inventory should accelerate the recovery as the fundamental economic law of supply and demand spurs prices higher.
We track the rolling four week average of newly written contracts in order to get a sense of market direction. During the past four weeks 59 single-family homes have gone under contract (without contingencies) in Southeast Jacksonville. One year ago during the same period only 48 homes went under contract. The five year average for this interval is 46 contracts.
Rates fell again this week. Thirty-year fixed rate conforming mortgages dropped this week at an average of 3.81% in the Jacksonville area, down from 3.84% the previous week. APR’s on thirty-year fixed rate jumbo mortgages plunged to 4.16% from 4.28% a week ago.This entry was posted in Southeast Jacksonville Real Estate Market. Bookmark the permalink. ← Ponte Vedra Real Estate Market 20120701 Ponte Vedra Real Estate Market 20120708 →
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