With the recent uptick in real estate sales, especially in the commercial sector, I thought it would be a good time to take a look at the local real estate market overall. The realtors, builders and bankers I speak with frequently have strong indications that we are about to see a bit of a boom again in the market.
I reached out to local realtor Michelle Rushing, who is also the current president of the Statesboro Board of Realtors, for statistical information to back up what we are seeing happen in the market. She provided convincing data from the Georgia MLS and the Georgia Association of Realtors.
According to the Georgia MLS, Bulloch County real estate is selling at a rate of 64 properties per month. The average sale price is $162,948 with more than $48 million in closings since January 2017. The average days a home is on the market this year is 90. However, there are 103 homes under contract currently and they represent an average of 61 days on the market.
The Georgia Association of Realtors report that the employment landscape and wages have both improved over the past few years, allowing for more people to participate in the home-buying process. When the economy is in good working order, as it is now, it creates opportunities in residential real estate, and right now is a potentially lucrative time to sell a home. Houses that show well and are priced correctly sell quickly, often at higher prices than asking.
New property listings statewide through April in Georgia decreased 7.5 percent to 15,364. Pending sales were up 3.8 percent to 12,331. Inventory levels shrank 15.8 percent to 35,749 units.
Prices continued to gain traction. The median sales price increased 7 percent to $200,000. Days on market was down 15.7 percent to 59 days. Sellers were encouraged as a months' supply of inventory was down 23.9 percent to 3.5 months.
Although buyer competition is mounting statewide during the annual spring market cycle, buyer demand has not decreased, nor is it expected to in the immediate future unless something unpredictable occurs. While strong demand is generally considered a good problem to have, it creates an affordability issue for some buyers, especially first-time buyers. And yet, prices will continue to rise amidst strong demand.
Interest rates were expected to rise throughout 2016, but they did not. Just as happened in 2015, the Federal Reserve waited until December 2016 to make a short-term rate increase. Incremental rate hikes are again expected in 2017. An economy that shows unemployment at a nine-year low coupled with higher wages inspires confidence.
Mortgage rates are not expected to grow by more than .75 percent throughout 2017, which should keep them below 5 percent. If they rise above that mark, we could see rate lock and that could cause homeowners to stay put at locked-in rates instead of trading up for higher-rate properties. Such a situation would put a damper on an already strained inventory environment.
Millennials continue to command attention as the next wave of home buyers, yet the rate at which this massive population is entering the market has been less than stellar. This may be due to a cultural change away from settling into marriage and parenthood until later in life, high student loan debt, or even reservations about a home being a wise investment in the wake of what the last recession did to their elders.
That said, some have suggested that this group is simply willing to wait longer to buy, thus skipping the entry-level purchase altogether to land in their preferred home instead.
At the other end of the age and price spectrum, baby boomers are expected to make up nearly one-third of all buyers in 2017. By and large, this group is not looking to invest in oversized homes, yet we could see improvement in higher price ranges as a hedge against inflation and risk. Shifting wealth away from the stock market into valuable homes may be seen as a safer bet during a transition of power and a period of pronounced change.
Overall it is a great time to enter the real estate market as both a seller and buyer. The outlook is strong and certainly things could change. At this point, though, it is a great time to move forward to buying the home of your dreams.
Please email DeWayne at email@example.com or call him at (912) 489-9499.