Real estate heating up around Mississippi’s college towns
Published: August 13,2007
It is that time of year again when students start flocking by the thousands to college towns like Hattiesburg, Oxford and Starkville. Make no mistake, the student population has a huge impact on the residential real estate market in the towns that host the three largest universities in the state.
There is a trend in some of the college towns for parents to purchase condos or single-family homes for their children to live in while they attend school.
“A lot of them are buying smaller homes,” says Melanie Mitchell, principal broker and co-owner of Prudential Starkville Properties and president of the Golden Triangle Association of Realtors. “A lot of parents, especially alumni, buy planning to keep the home for themselves after their children finish school. Some people are even buying before their children come to college, and renting them out. Then when their children come they live in them. They are building up equity and it becomes a second home for them. I think it is definitely a good investment.”
Homes being purchased by parents range from smaller homes all the way up to high-end properties. A lot of people buy the condos because of the low maintenance requirements.
Mitchell said another impact of the students is demand for apartments. Starkville has seen a lot of growth in apartments and they are still building.
A lot of the students like to live in the Cotton District.
“That seems to be a hot place,” Mitchell says. “The Cotton District is convenient to campus. The district is starting to get more restaurants and shopping. There are restaurants where you can sit outside and eat. I have three houses down there, and my phone rings constantly with people wanting to rent them. I don’t have to advertise because people are waiting in line trying to get them.”
Also popular is the new Belfry development planned on Russell Street located near the university. Mitchell says units are being pre-sold now, and it hopes to break ground soon.
“It is more of a boutique hotel concept for alumni,” she says. “If you to want to invest in it, you can rent it out when you aren’t there. It is a whole new concept for our area. They are furnished all the way down to the linens. Then there is also the Annabella, which is under construction now off South Montgomery near the campus. It is a higher end type development also designed for alumni. Several of those have sold.”
And the Hattiesburg market? ‘One of the best’
The Hattiesburg market probably has been influenced more by hurricane zone flight than students in the past two years. Sue Gallaspy, broker associate with Coldwell Banker, Don Nace, Inc. in Hattiesburg and president of the Hattiesburg Association of Realtors, says the market has been great.
“Our office, Coldwell Banker, Don Nace Inc., was just notified that in offices of our size (21-35 sales associates), we are number three nationwide,” Gallaspy says. “This tells us that the Hattiesburg market is one of the best in the nation. As our inventory increases, the days on the market will likely increase, as well as price adjustments.”
While there has been a slowdown in the national housing market, Hattiesburg has been largely insulated from that. Gallaspy says there is a lot of activity because of employees at the university and medical establishments transferring in and out.
“When someone transfers out, someone usually is coming in to take their place,” she said.
While housing prices increased after Hurricane Katrina for nine to 12 months, prices have since settled down. Gallaspy says the number of houses being sold is about equal to the pre-Katrina days.
With students flocking back to town, there is a shortage in the supply of housing.
Gallaspy says she and her husband own a property management firm. They recently had seven people checking out and seven moving in the next day. Things are not staying on the market even a week.
“What enters into that mix is the apartments and homes that the federal government rents for personnel at Camp Shelby,” Gallaspy said. “They don’t have housing down there for their permanent employees. So it is very competitive.”
Affordable housing is hard to find in the area. Gallaspy says properties priced under $100,000 generally need a good bit of work.
“If you need something between $80,000 to $100,000, you may have only two or three properties to choose from,” she says. “Sometimes if you don’t make a quick decision, it is gone. We wish we had builders who could come in and build houses for $100,000 to $140,000. That would put it in the reach of a lot more people. We could sell houses all day long.”
Making investments in Oxford
In Oxford, purchases of homes by parents for their college students is sustaining the market even though it is a depressed market overall, says Linnea Thornton, a sales agent for Coldwell Banker Pat McClure Realty
“Your more expensive homes over $200,000 are tending to stay on the market longer,” Thornton says. “There is a larger inventory of those. People are taking more time to shop. College students are looking towards condos for the convenience of yards being mowed and low maintenance. That has been fairly consistent. The popularity of condos came about a couple of years ago.”
Thornton says while students start looking in the area near campus first, she has found that homes within an eight-minute drive of campus are selling as long as the home is what the buyer is looking for.
Buying a home to house children in college can be a good investment, she says.
“People are realizing they can either break even or possibly get a return at the end of the four years or the time period the kids are in the university,” Thornton says. “A lot of parents keep the home a year or two past the time when their children leave and rent them to friends and other students to possibly have a little rental income, depending on how much equity they need to build in the home before they sell it.”
Contact MBJ contributing writer Becky Gillette at firstname.lastname@example.org.
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