Residential real estate is selling well in North and Central Mississippi metropolitan markets, while a flurry of new home construction is stirring up dust in South Mississippi, particularly in Hattiesburg and the Gulf Coast.
“Obviously, the Mississippi Gulf Coast is hot, but metro Jackson is also doing well,” said Marty Milstead, executive director of the Home Builders Association of Mississippi. “Southaven and Hernando are very productive and active and selling well.”
Statewide, Mississippi doesn’t have the real estate fluctuations seen in other metropolitan areas simply because the amount of production doesn’t compare, said Milstead.
“Atlanta will have 40,000 starts for a year and our entire state will do 10,000,” he said. “A place like that is more subject to big swings. A big factor in what happens, the big unknown, is interest rates.”
For the first four months of 2006, new single-family housing starts in the Gulfport-Biloxi area have nearly doubled compared to the same period last year, from 590 to 980. By comparison, Jackson has seen 1,190 starts from January to April 2006, compared to 1,040 the same four months in 2005.
Existing homes? ‘Seller’s market’
Concerning existing home sales post-Katrina, “it’s still very much a seller’s market,” said Chip Green, president of the Hattiesburg Area Association of Realtors.
“We’ve had about a 30,000 increase in population since the storm,” he said. “We’re seeing a trend of people coming from New Orleans and the Mississippi Gulf Coast buying ‘safe houses’ where they can have a place to evacuate to should there be another hurricane in the Gulf. We’re seeing people moving here from the Mississippi Gulf Coast as they see how long the rebuilding process is going to take. Hattiesburg is hot.”
According to the Hattiesburg Area Association of Realtors, 1,756 homes were sold in 2005, with an average pre-Katrina days-on-market of 91, compared to 87 days-on-market after the devastating storm. Last January, the average sales price was $114,862. In September and October, that number jumped to $155,768 and $155,352, respectively. During the first four months of 2006, Hattiesburg Realtors sold 539 homes, reflecting a 12% increase over the previous year, and are on track to sell nearly 2,000 homes by year-end. Ironically, the average sales price in January showed a robust $205,961, followed by a 10-month low of $122,841 in February.
“All price ranges are selling right now,” said Green, a Realtor at Coldwell Banker Don Nace in Hattiesburg. “Even our higher end homes are selling rapidly. Any nice home between $125,000 and $275,000 is practically off the market as soon as it comes on. Dennis Pierce, a well-known major developer, said a nationwide homebuilder has talked to him about the need for 5,000 homes to be built in the area. Right now, at least 1,000 homes are being planned.”
DeLois Smith, broker-Realtor for The DeLois Smith All Star Team in Hattiesburg, said the limited supply of existing homes in the $75,000 to $100,000 range has been a primary factor in limiting sales. “Limited supply,” she said, “creates more tolerance for less-than-excellent condition of properties in this price range and affects prices to the degree of tolerance within the appraisal process.” Top performing markets: Oak Grove and Petal.
The Mississippi Gulf Coast Multiple Listing Service Inc. reported 1,859 houses sold in the first four months of 2006 with an average sales price of $151,246, compared to 1,504 homes sold for an average price of $140,281 during the same time period last year. (In 1990, the average residential sales price was $59,860.) The most sales activity occurred in February, when 446 houses were sold. In April, 702 new listings were placed on the market, bumping up the four month total to 2,923, compared to 2,660 new listings from January to April 2005.
“The average per sale price of homes is not reflective, but that’s due to a large number of homes being sold ‘as-is’ with storm damage,” pointed out Lorraine Krohn, executive vice president of the Gulf Coast Association of Realtors.
Judy Freeman, president of the Mississippi Gulf Coast Multiple Listing Service, said some area Realtors were told soon after the storm to beef up their staff because the number of properties repossessed by Fannie Mae and Freddie Mac would be overwhelming.
In a recently released Freddie Mac bulletin, the moratorium on foreclosures and evictions in the counties and parishes that suffered the greatest storm damage was moved from June 1 to September 1.
“The first word was that repossessions would begin in January and February, but the federal government decided to give a little more reprieve, and I feel like there won’t be as large of a sell off as previously anticipated,” said Freeman.
Jack Beith, president of the Pearl River Board of Realtors, said the Picayune market, located 50 miles northeast of New Orleans on Interstate 59, is seeing increased buying activity. “Our inventory is about half of what it was last year, and prices have jumped up a little bit,” he said. “The buyers are mostly from Chalmette and the Mississippi Gulf Coast, with some also coming from New Orleans.”
For the first quarter of the year, the Jackson Association of Realtors closed 1,322 properties in 2004, 1,419 in 2005, and 1,375 in 2006. “On the face of it, our numbers are down for the first quarter of 2006, but that’s not the whole story,” said Cheryl Bullock, CEO of the Jackson Association of Realtors. “Comparing the numbers of homes actually under contract and pending loan closings for those same time periods over three years, we see the following: seven properties pending in 2004, three properties pending in 2005 and 62 properties pending in 2006.
“We’ve seen a leveling out of the buying and selling activity in the Jackson metropolitan area, but our market is still very healthy. We expect a continuation of the strong real estate market and attribute that to several factors in our immediate area: attractive interest rates, strong local economies and consumer confidence. There has also been an increase in the average cost of a (single-family detached) home in our area from 2004 to 2006. In 2004, the average sales price was $123,700. By 2006, that average had increased to $166,980.”
Around the region
Thanks to high livability ratings in high-profile national retiree magazines and increasing enrollment at the University of Mississippi, the Oxford area existing housing market has experienced tremendous growth. In the first four months of 2006, ninety-nine homes were sold in Oxford for an average sales price of $226,522, according to the North Central Mississippi Board of Realtors.
In the growing city of Batesville, located 26 miles west of Oxford at the intersection of Highway 6 and Interstate 55, 32 homes averaging $114,760 were sold from January to April 2006. The remaining area communities of Abbeville, Banner, Bruce, Coffeeville, Como, Courtland, Holly Springs, Oakland, Pittsboro, Pope, Potts Camp, Sardis and Water Valley accounted for 30 home sales during the first four months of the year, with an average sales price of $90,402. (One Abbeville home sold for $650,000.)
Further north toward Memphis, Paul Shahan, executive director of the Northwest Mississippi Association of Realtors, succinctly described the residential real estate atmosphere: “Days on the market are shorter than same time last year. Average sales price is higher than same time last year. Monthly sales are higher than same time last year. And inventory is higher than same time last year.”
From January 2005 to April 2006, the average list price peaked in November at $172,657, with properties selling for 98.5% of the asking price. The average days-on-market: 93.
Michael Austin, president of the Northwest Mississippi Association of Realtors, predicted, “This summer is going to be fantastic.”
“The bigger houses are moving quite well,” said Austin, broker-owner of Austin Realty Group Inc. in Hernando. “We’ve not had the slowdown the media likes to talk about … overpriced and inflated homes in California, Las Vegas and Florida. We’re steady. Interest rates are good. People are moving from all over the country to North Mississippi. I can sell all the beginner houses I’ve got. At the same time, I’m a builder of a 55-and-older retirement community, and from beginning to end, we’re selling out in two years. I’m tickled with our market. People are going to do what they need to do to achieve the American dream.”
Contact MBJ contributing writer Lynne W. Jeter at Lynne.Jeter@gmail.com.