Every day we are bludgeoned by the news of a mortgage industry in crisis - the latest being Fannie Mae and Freddie Mac - and of deteriorating residential home values.
I am trying to stay positive, but the reality is in Bulloch County right now there are 784 residential sales listings in the Multiple Listing System - not including mobile homes. That is the most there ever has been at any one point in time.
Wow, that is a bunch of houses, or is it? You may be surprised to know that a good "chunk" of that number is not traditional single family residential housing, but rather college investment housing. If you take a quick trip down Langston Chapel Road, you will see a lot of new college investment housing.
Let me take a moment to define college investment housing. It is specifically built for parents of college students to purchase for the purpose of housing their child(ren) while attending Georgia Southern, or for investors looking to buy rental property to keep which will produce cash flow.
It is not designed for small children and families, and is marketed to the student housing market. These properties tend to change ownership more often than traditional single family residences.
New "student" neighborhoods currently under construction include Tuscany Trail, Langley Pond, and The Hammocks (located on Highway 67 South). Existing neighborhoods include Talons Lake, Burkhalter Plantation, as well as some condominium and townhome complexes located throughout Statesboro. The newer neighborhoods listed above do not contain condominiums, but rather duplexes, townhouses, and stand alone housing.
Right now, it is estimated that 21 to 24 percent of the 784 residential sales listings are college investment housing with sale prices ranging from $38,000 to $170,000. That is a lot of the market.
So, is this good times or bad times for investment housing? The general consensus is that it is very trying times.
"It is a tough market out there," said Russ Taulbee, a real estate agent with Coldwell Banker Tanner Realty in Statesboro and the listing agent for Tuscany Trail. "We are still getting a tremendous amount of interest from college parents and investors."
Taulbee said stringent lending standards as well as fewer buyers has resulted in a much slower market than the one that existed in the last several years.
"It isn't necessarily the new apartment complexes coming on line that have hurt the market as much as general economic conditions," he said. "There are students that do not want to live in apartments, and families that want a piece of investment property, so the demand still exists. It's just a matter of making everything work. It's actually a really good time to buy."
One "out" that this market has is its ability to be rented. If the units don't sell as the developer hoped that they would, the developer in some cases can rent them, and apparently they are doing so. It is no secret that GSU students migrate to the latest and greatest housing which may be what saves the newly built college investment housing market in this area for the time being.
My question is, how bad can it be since developers are still building. I guess they figure if they build it, the students will come. By August 1, we will know.