Mississippi doesn’t always track with the national trends, and sometimes that is a good thing. For example, while homebuilding and sales have declined in the state, the problem isn’t nearly as bad as in high-growth areas of the country. And there is some evidence the housing decline won’t last as long here.
In the Jackson metropolitan area, more homes were sold in 2007 than in 2006.
“To be exact, we sold 192 more homes in 2007 than in 2006,” said John Praytor, a real estate appraiser for The Professional Appraisal Firm, Jackson, who serves as president of the Jackson Association of Realtors. “But having said that, it would be misleading if I didn’t say the average sale price in 2007 fell 6.5%. That doesn’t mean houses fell that much in value, but the typical consumer was buying a home that was 6.5% less expensive.”
In recent years, Jackson saw a lot of home building and sales in the upper end of the market, from $300,000 to $600,000. Now, most of the activity is below $300,000, which Praytor says is more of a normal market.
“About 83% of the homes in the Jackson MLS are under $300,000,” he said. “So, the majority of our market is selling for under $300,000. That is back to the way it used to be in ‘02 and ‘03 when things were a more normal price.”
While the national housing market news is gloomy, Praytor said it is still great in the Jackson area. He likens it to the weather. Weather varies from town-to-town and state-to-state.
“Here, the weather just hasn’t changed that much,” he said. “With interest rates so low, now is a better time than ever to buy a house in the Jackson area.”
It is taking a little longer for homes to sell on average. While previously homes averaged only 60 to 72 days on the market, the average days on the market increased in 2007 and are now standing at approximately 94 days.
“That is not that bad,” Praytor said. “Our housing inventories are now coming down again. We reached a high of 5,100 houses on the market the week before Thanksgiving. Now, our housing market is at 4,400. So, we are down about 600 to 700 homes from where we were. We are seeing a correction in the market. The supply and demand is going back into balance. Things are returning back to normal, which I know a lot of people aren’t used to. But is really isn’t that bad.”
His advice is for sellers to ask what the house is worth and it will sell in a timely manner.
‘Good time to buy’
“Now is a good time to buy,” Praytor said. “In January, 83% of the homes that sold were under $200,000 in value. So, there are a lot of affordable homes for sale here in the Jackson market. And the interest rates are near all-time lows. I still can’t believe how cheap the interest rates are today. Sellers are more negotiable. Builders are more negotiable. Owning a home is still the best investment an American family can make. It does better than the stock market on average, if you bought it right, and don’t spend too much for it. The average home doubles in value every 10 years.”
The Tupelo area is expected to see a boost in the home market because of the new Toyota assembly plant under construction.
“Toyota hasn’t had a huge effect yet, but it will,” said Jeff Fulgham, owner, T.U.P Realty, Tupelo. “You don’t see a lot of people coming in for Toyota just yet. Probably in the next year or so you will see more and more coming through. It is still a little slow.
“People are still building houses. I don’t see the house building slowing down. Home sales have slowed down, but aren’t terrible. Foreclosures are becoming more prevalent. We are getting more and more of those.”
Homes in the price range of $120,000 to $150,000 are the hottest market. And while there have been some price decreases, they haven’t been drastic.
“Mississippi is kind of unique,” Fulgham said. “We don’t feel the ups and downs of the economy the way other states do. Prices are coming down some, but not to the extent you see in Las Vegas or somewhere like that.”
The inventory is up from 1,108 in February 2007 to 1,264 in 2008. Average price for sold home is $117,167 to $122,131. The average days on market are up from 86 to 92.
“Now is definitely the time to buy a house,” Fulgham said. “Inventory is up. There is a lot to choose from. Prices are right. Interest rates are great. It is a good time.”
Ahead of the curve
Gwen James, Coldwell Banker Don Nace Realty, Hattiesburg, who is 2008 president of the Mississippi Association of Realtors, said from what she is hearing from colleagues around the state, Mississippi is ahead of the national curve on housing. Prices are steady.
In Hattiesburg, James is expecting a Katrina correction or market adjustment because the area had such an influx of buyers for two years after the storm that increased prices.
“But what I’m seeing is that prices are staying very stable,” James said. “Mississippi has never enjoyed, other than the post-Katrina period, runaway inflation. And that is good. Some of the larger markets have experienced that. It creates a major affordability issue.”
New home construction has slowed down in the Pine Belt area. One area where there is an oversupply is new construction. But James expects the market will absorb that in a timely manner.
Beverly McMillan, broker-associate, McMillan Real Estate and Appraisal Inc., Vicksburg, said she is happy to report that homes sales are picking up.
“It kind of follows the weather,” McMillan said. “The weather gets better and things pick up. It looks like it is going to do that this year. What I’m seeing is it is a little more difficult for a lot of people to get their loans. There has been a real tightening up on loan applications.”
McMillan said she has been shocked at how people with good credit scores in the range of 620 and 650 are being turned down for loans. First-time buyers especially are having a tougher time getting loans.
“Before with a lot of first-time buyers, even if their credit wasn’t so good, companies could work with them without doing a subprime loan,” McMillan said. “They got locked in at good rates. These same people are now being turned down. It is taking longer to go through underwriting. Everyone is so cautious when before it was free and easy. They went so lax, and then started seeing foreclosures. Now that everyone is in a panic about all the failures, it is three times more difficult to get a loan through than previously.
“It is a lot more difficult to get these loans through. That is why we are seeing a slump. There are a lot of people who want to buy, but the loans aren’t as readily available. The biggest problem for our area has been the national media that has pushed and pushed that it is a terrible time in the real estate market. And it affects the people here.”
McMillan expects to see things pick up as the weather improves. With a recent warming trend, she was already seeing more people out looking to buy.
“It is my gut feeling it is going to be a good spring,” she said.
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.