Housing market in west Georgia doing well, but inventory is “shockingly low” | Local News

Building permits for single-family homes has increased in west Georgia, and housing prices have also gone up 13.2% in the last year. New listings have taken a 6% decrease between Sept. 2019-20, an economics expert at the Richards College of Business at UWG said in late October.

He and an expert with the real estate market in Georgia said interest rates are also at a historic low, giving residents looking for their next house “extended buying power” while combing the market.

“Interest rates are now at 2.81% nationally, and that’s just unheard of,” Dr. William “Joey” Smith, chair of the economics department at UWG, said in October. “I’ve never seen interest rates that low for 30-year mortgages.”

That rate for a 30-year fixed-rate mortgage has dropped 10 percentage points to 2.71% as of Dec. 10, according to the Freddie Mac website. The rate is about 50 points lower for a 15-year loan, at 2.26%.

John Ryan, the chief marketing officer with the Georgia Multiple Listing Service, said a historically low interest rate gives first-time buyers more buying power.

“When you look at interest rates, that does increase the ability for people’s buying power,” he said. “They can go ahead and possibly afford more homes than they would with a higher interest rate. There are definitely some shifts going on in the housing market.”

“If interest rates were at 5 or 6% like they were three or four years ago, people may be looking at a certain price range, but if it drops below certain base points, that opens up the ability to extend their buying power to a higher price range of other property,” he added.

He said people are also leaving cities to go out to the suburbs, and while the coronavirus pandemic has played a part in that, he said it is because of cheap building lots. The average home price in Douglas County is $206,227, according to the Zillow home buying and rental website.

“There’s also a shift in the types of housing that people are looking at, with people working from home,” he said. “It’s not just a place to live, but a place to work as well. They’re looking for additional space to be able to go ahead and work from their homes.”

Ryan said the housing market was going strong before the coronavirus pandemic began in the early part of this year, but that began to change during the summer.

“As we were coming into 2020, January and February numbers were outpacing 2019,” Ryan said. “We were geared up for a pretty strong real estate market, interest rates were low. As we hit March, and the pandemic hit, we really, as a company, did not know what to expect in terms of how this would affect the real estate industry.”

In April, he said, the number of home sales and new listings went down. But then real estate agents began to embrace something different to market their houses: technology.

“The market really started picking up even so much that by the time we had hit midsummer in July, we had seen record numbers in the number of units sold also the sales volume in a single month,” he said. “It’s really due to the resilience of the realtors and the real estate professionals, how they adapted to technology and being able to communicate to both sellers of properties and incoming buyers.”

But the problem he said now is the nation’s inventory of houses is “shockingly low,” and he added this is also the case in Georgia.

“Where other businesses have retracted because of the pandemic, this industry has expanded,” he said. “Now, what we’re facing is low inventory. This is the other side of the coin with it. The national supply is shockingly low.”

To illustrate his point, he said there are 44,500 real estate agents that are members of the service but there are 33,000 listings across the Peach State.

Of those, he said there are only 11,482 single-family homes. That means there is less than one listing per agent currently available, he said.

“That’s a shocking number when you’ve got 44,000 agents and only 11,000 ‘detached’ properties,” Ryan said. “It’s not even one listing per agent — at all. At our peak, we were well over 100,000 homes for sale when the supply was out and pushing the demand. Inventory is an issue.”

Ryan predicted there will be a strong housing market going into 2021, but the headwind is supply because new construction is lagging the demand. He added building permits are starting to go back up again, but not enough to meet the demand from consumers.

“We’re still seeing multiple offers put on properties,” he said. “As soon as a property comes on the marketplace, you better be prepared to make that offer. A lot of times, agents are making offers above the actual listing price to get their clients in the homes. I have been reading articles where there’s also buyers that are waiving criteria, such as home inspections. They will take the house ‘as is’ just to go ahead and confirm this is what they would like to be in.”

He said those added costs will be the “big issue,” and because there are less houses available, prices are going to go up while demand is still strong.

Smith also said the average time a house stays on the market is 50.7 days and cautioned residents who put their homes on the market to have another one to move into when they are selling.

He added that, due to federal policy made during the pandemic, some residents may not be making rent or mortgage payments. But that grace period will eventually end, and he said economists do not know if this will trigger foreclosures and evictions next year.

“Another problem though that we’re running into is that we really don’t know if those mortgage forbearances are going to come back to bite us later on,” he said. “We don’t know if that’s going to come back and trigger foreclosures and evictions later on. This all ends on Dec. 31.”