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Sales soften, but residential market steady and growing

As residential real estate markets cool across the nation, how are real estate professionals and firms in Mississippi affected? In a state made up of diverse markets and needs, the Mississippi Association of Realtors (MAR) reports a softening but not a slowdown overall, along with a variety of growing trends.

“In general, we’re not experiencing the slowdown going on in other major markets such as San Diego or Miami, for example,” said Angela Cain, MAR’s chief executive officer. “Overheated markets like those had double digit price appreciation that we never experienced. There is a softening in many of our markets across the state, but home sales in Mississippi are generally very stable.”

Jackson is one of the areas seeing a softening of the market, according to Cheryl Bullock, chief executive officer of the Jackson Association of Realtors.

“Overall, the statistics are right in line with where we were this time last year,” she said. “We have begun to see a seasonal softening of the market that is typical for this time of year. It is a slowdown that this area always experiences coming into the holiday season. Overall, the Jackson market is stable.”

In Vicksburg, homes are in hot demand in the $150,000 to $225,000 price range. “We have no inventory in this price range,” said Alainna O’Bannon of the Vicksburg-Warren County Board of Realtors. “We’re seeing slow sales for homes priced $275,000 and up. Patio homes are a new trend and in demand by young professionals.”

O’Bannon added that 100% financing and Ameridream are popular for helping the financially challenged get into a home.

With Hurricane Katrina evacuees moving into Natchez and others looking for second homes, the oldest city on the Mississippi River is experiencing a high volume of sales, says Vicky Ratliff, association executive with the Natchez Board of Realtors.

“Most people are looking for a second home in case of disaster,” she said. “In the near coming months, we will have two new residential developments. This is something that Natchez has needed for a very long time.”

She also said that Natchez agents are seeing homebuyers who want new construction. “We have a lot of people purchasing vacant lots to build new homes. We are experiencing homes for sale in the $100,000 to $300,000 range,” she said.

“Normally, we have approximately 25 to 30 homes for sale and at this moment we have nine for sale.”

The Golden Triangle Association of Realtors reports that prospective buyers and sellers expect many photos of home interiors to be available online and are surfing the Internet for homes and real estate information.

“We’re finding that open houses and searching print publications for real estate information are not as hot as they used to be,” said Lois Laird with the association. “Other trends are that more buyers want representation and they want much faster responses for requested information.”
The Laurel/Jones County area has seen more than an $8-million increase in sales in 2006 compared to the same time in 2005. “Before Katrina, this area averaged 260 listings and now the listing average is approximately 160,” said Cheryl Jordan, an executive with the Laurel Board of Realtors. “The area is still experiencing a sellers’ market. While new home construction is occurring, existing home sales still prevail. The average number of days on the market is around 130 and the median price is $85,000.”

Although the Northeast Mississippi area may have had an overall softening of the market, it has not experienced the plummeting that’s happening in other parts of the country, according to Janice Phillips with Crye-Leike Realtors of Tupelo. With more homes on the market in the area, buyers have the luxury of being selective.

“We are presently experiencing a buyers’ market,” she said. “Truly motivated sellers are being forced to be more realistic as to their expectations and those sellers who were selling solely for the purpose of making a profit are either taking their properties off the market or experiencing a longer marketing time.”

In the “What’s Hot-What’s Not” category, Phillips says French country and garden homes are the popular styles now along with the trends of Internet shoppers, age 30 and under buyers and true investors. Not hot are Southern traditional styles, homes with no garage, unqualified buyers, second homes and “a steal.”

Looking at bustling Northwest Mississippi, the year-to-date home sales volume for the DeSoto County area jumped 10.4% during the first nine months of this year compared to 2005. Home sales so far for 2006 have totaled 3,718 for 2006 compared to 3,581 for the same period in 2005.

“We are seeing a record number of homes ever sold for this period,” said Michael Austin, president of the Northwest Mississippi Association of Realtors. “We are in a very dynamic market with a record number of homes on the market. Yet, they are selling faster and at higher average prices than last year.”

He said the current inventory of homes for sale is 2,554, and days on the market have dropped from 96 in September 2005 to 82 in September of this year. The average sale price has gone up from $156,288 to $163,814.

The residential market is slowing down a bit in Hattiesburg, according to Trudy Bounds, who says that’s what she’s hearing from members of the Hattiesburg Area Association of Realtors.

“The Hattiesburg area had been booming prior to Hurricane Katrina, and the storm caused the residential market to continue growing,” she said. “The commercial market seems to be what’s hot now. New restaurants and businesses are constantly popping up and even the downtown area is flourishing with new businesses and those who have returned since Katrina.”

On the Gulf Coast, where thousands of homes were destroyed or made uninhabitable by Katrina, the residential market is reacting with increased sales and prices and fewer days on the market. In 2005, the average number of days on the market was 128; that number dropped to 107 in 2006. The average sales price was $149,392 in 2005 and rose to $160,221 in 2006. Total listings sold in 2005 were 4,062 and 4,516 in 2006.

“The only way to describe the real estate market on the Coast since Hurricane Katrina is crazy,” said Lorraine Krohn, executive of the Gulf Coast Association of Realtors. “Agents in the area are staying busy and making money, but the area reports some slowing. The local board expected some licensees to go inactive, but so far they have not seen a downturn.”

Krohn notes that condos are under construction, but with a 270% increase in the cost of insurance, she expects some developers to move more cautiously. v
“Roadblocks for the real estate market on the Coast right now include the lack of affordable housing, the high cost of insurance, the lack of funding to put in the needed infrastructure and the slow pace of the permitting process,” she said.

Contact MBJ contributing Lynn Lofton at llofton656@aol.com.

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