Housing slump leading to better deals for some future homeowners | Jobi Cool

JACKSONVILLE, Florida – A local realtor says new home prices are falling, and that’s because of the impact of COVID-19 and supply chain issues.

During the pandemic, housing prices rose, mortgage interest rates were around 3% and more homes were built. But a surplus of building materials slowed construction completion and import dates.

Jonathan Daugherty, a real estate agent in St. Johns County, said the housing slump is leading to better deals for some prospective homeowners. Future homeowners who qualified for a 3% mortgage may not qualify for a 6% rate, but their home is already built, so after the deal is dropped, builders are trying to sell homes for thousands of dollars less.

Daugherty, who has been a local realtor since 2009, recently spoke with News4JAX about how he sees real estate changing.

“Now interest rates have gone up to 7%,” Daugherty said. “So now, 12-16 months later, after they’ve done the deal, the houses are being completed and the lenders come back and say, ‘Well, that 3% is now 6 ½-7%.’ And now the payment is $1,500-2,000 more than they originally thought.

The homeowner-to-be can no longer afford the home, and in some cases, the buyer is losing their down payment as well.

“With no fault of the builder and no fault of the buyer, the transaction cannot happen,” Daugherty said.

But the house has yet to be sold. The banks want the money they gave the builders upfront to build the home. The home goes back on the market in hopes of selling at a lower price to a new buyer.

“An incredible opportunity for buyers,” Daugherty said.

Daugherty said a home originally priced at $500,000 is now selling for close to $475,000, creating an opportunity for a new homeowner — if they can afford the higher interest rate.

Copyright 2022 by WJXT News4JAX – All Rights Reserved.

Source link