By JACK WEATHERLY
Central Mississippi continues to be a seller’s market for homes, with the median sales price rising 6.5 percent in July compared with a year earlier.
The midpoint price of a house sold in that period rose to $189,000 from $177,500, according to the Central Mississippi Multiple Listing System.
Also, days on the market were down 23.8 percent to 70 from 92 days in the 10-county area year over year.
Yet the price and sales pace are being influenced by an inventory that dropped 36.7 percent in the 12-month period, from 7 months to 4.4 months, according to the Central Mississippi Realtors Association.
“Wages are up but not at same pace as home prices, leading to the kind of affordability concerns that can cause fewer sales at lower prices,” the association said in its Market Heartbeat report.
Reuters said last week that a poll of U.S. property market experts holds that prices are in the position “to rise this year at the fastest pace since 2015 and at more than double the rate of pay growth and consumer price inflation for the sixth year in a row.”
Reuters quotes Sal Guatieri, senior economist at BMPO Capital Markets, as saying that “affordability is declining or will continue to decline.”
The Reuters poll said that further Federal Reserve rate hikes are expected.
Existing houses make up 90 percent of the market. Nw homes comprise the balance.
The Associated Press has reported that lumber prices have shot up by about $7,000 per U.S. home since the start of 2017, largely due to tariffs on Canadian softwood lumber by the Trump administration, according to the National Association of Homebuilders.
The Commerce Department said that housing starts in July rose to a seasonally adjusted annual rate of 1.17 million, according to the AP, hardly enough to reverse the 12.9 percent plunge seen in June as rising lumber, land and labor expenses appeared to constrain new construction.
Starts have risen 6.2 percent year-to-date. Solid job growth and a dearth of existing homes for sales have increased demand for new properties.
Jackson-area homebuilding permits totaled 1,352 in 2017 and are on course to reach that number, with 701 issued in the tri-county area of Hinds, Madison and Rankin counties through July, excluding Canton and Florence, according to the Homebuilders Association of Jackson.
Steven Smith said his Charter Builders will build about eight homes this year, which he says is fairly typical for him.
The Madison-based builder said his homes range from $350,000 to $400,000, with current high-end being about $700,000.
Appraisals are lagging behind the added material costs, Smith said. “If the costs are up, the appraisals should be, too.”
Rains have been frequent and heavy in the area this summer. Nevertheless, Smith said, “homes are moving fairly well.”
And even the price of lumber has moderated some, he said, though he conceded he was puzzled by that trend.
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