Are Jacksonville multifamily asking prices underwritten for 2025 or still running on 2022 math

The sellers have not caught up and most of them will not until they have to, meaning a refinance wall or a vacancy problem forces their hand. Six months of running the numbers is long enough to be confident the math problem belongs to the market. The thing nobody mentions until it hits them is that the insurance gap you found operates as a lender trigger on top of being a pricing issue, because DSCR lenders now require you to escrow the actual quoted insurance rather than the seller's number. Even if you negotiate the price down to where the cap rate looks acceptable on paper, the lender's DSCR calculation uses the real premium and the deal dies at underwriting anyway. A familiar pattern is a buyer getting to appraisal on a renegotiated price and still getting kicked because the underwriter plugged in a current wind and hail quote the seller never budgeted for. On your specific Springfield building, 875 was probably still generous at a 28,400 insurance number, because that still sits around a 6.4 cap and the vintage adds deferred maintenance risk that does not show in any pro forma. Waiting is the stronger position. Watch for the ones that have been sitting 90 plus days with a price drop already on record, because those sellers are usually past the denial stage.

Springfield specifically is tricky because a lot of that pre-1985 stock was converted or renovated during the 2018 to 2021 run up, and sellers are still anchored to what their buddy got in 2022. That 28,400 insurance quote is not even the ceiling. A 10 unit built in 1979 in Duval County can land at 34k once a carrier non renews mid policy, and that has been happening to owners over the past year. The insurance market in Florida is not stabilizing the way national headlines suggest, at least for older wood frame multifamily. Your 44 percent expense load is honest. The 32 percent is a fantasy someone built in Excel. The cap rate compression you are describing is real, and Jacksonville is unlikely to correct fast. Sellers in that market tend to hold rather than reprice, which means deals sit and the motivated ones sell to cash buyers at 6.1 or worse. If your alternative capital deployment gets you within a point of that yield with less hair on it, that math is hard to argue with. Some of these Springfield listings have been sitting 180 plus days already, and the repricing, when it happens, tends to happen fast and all at once.

The insurance gap you found reads as a deliberate pro forma move rather than a seller error, and it has become almost standard on Jacksonville listings right now. The same 14 to 15k placeholder shows up on listing after listing in Duval this year, all of them quoting pre-Ian renewal numbers that nobody can actually get anymore. The cap rate compression you're describing hasn't cleared yet because a meaningful chunk of the inventory is held by mom and pop operators who bought in 2018 to 2020 and have no mortgage pressure forcing them to move, so they can just sit. That's different from a market like Memphis where there's been more institutional churn and repricing has actually happened. Your 875 offer was reasonable. It's roughly where the math lands if you underwrite insurance honestly and hold a 7.5 percent debt cost, but sellers in Springfield are watching each other and nobody wants to be the first to print a real number.

Your 44 percent expense load is actually optimistic on the older Springfield stock. I underwrote a 10-unit on Hubbard last spring, 1978 construction, and once I put in actual insurance at 31,200, a management fee at 8 percent because I'm not local enough to self-manage, and a realistic capex reserve of 150 per unit per month given the roof and plumbing age, I was sitting at 51 percent before debt service. The seller had 34 percent on their T12 because they were self-managing, deferred everything, and had a grandfathered policy through a carrier that has since pulled out of Florida entirely. That building went under contract at 940 and I'd bet it either fell out or the buyer is going to get hurt.

The math you're describing on yield on cost is exactly why I've been looking at the Tampa periphery instead, Hillsborough County stuff in the 180 to 240 per door range where insurance is bad but not Jacksonville-bad because you're not in the same wind zone exposure. The Jacksonville sellers who are actually motivated are the ones with variable rate debt maturing in 2025, and there are a few of those coming, but you have to find them before they hit the MLS because by the time a broker packages it the ask has already been walked back up to hopeful territory. Six months of watching is about right, I'd keep the criteria tight and wait for the distressed event rather than trying to negotiate a rational seller into a rational price.

The spread you are describing shows up in a lot of Florida metros, and Jacksonville is worse than most because insurance reset faster there than seller expectations did. Duval County numbers put the realistic cap rate for anything pre-1985 that actually pencils with current debt closer to 7.5 to 8, which means you need asking prices 20 to 25 percent below where most of them are sitting. Your 875 counteroffer was probably still generous. At 28,400 in insurance alone on a building grossing 7,200 a month, that is roughly 33 percent of gross revenue before you touch taxes or management, let alone repairs.

That 28,400 quote is actually light, I'm seeing 34 to 38k on pre-1985 eight-units in similar markets right now.