It’s taken a decade, an oil spill and a national recession, but now could be the time for those who’ve waited until conditions improved to sell their home or land in South Mississippi.
Sales prices are up, the time it takes to find a buyer is down, and local real estate professionals say they need more homes and land to sell.
It’s steadily turning back to a seller’s market, said Ray Gonzales, associate broker and real estate consultant with Berkshire Hathaway Home Services and Ann Prewitt Gulf Coast Realty. He tracks local real estate trends that show:
▪ The median sales price of a home this year is $150,578, up 5 percent year to date from 2016.
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▪ It takes an average of 3 1/2 months to get a home under contract once it is listed.
▪ The Coast has 6.1 months of supply of homes for sale now, compared to 8.8 months a year ago
It’s also a good time for buyers, the local agents say. Interest rates are rising slowly, but still sit near historically low levels.
What buyers want
“They want what they see on TV,” said Sam Ford, associate broker with Coldwell Banker Alfonso Real Estate. Open floor plans top many wish lists, he said, along with big closets, hardwood floors, stainless steel appliances and granite countertops — even if they don’t cook. They want double vanities in the bathrooms, tray ceilings in the dining room plus an extra bedroom to turn into an office, he said.
Beyond that, he said they are looking for a safe area, a good school district, easy access and dry lots to avoid extra insurance costs and risks.
“They love subdivisions in good areas,” Ford said, and they like new homes and small yards.
New home sales surge
Not so long ago, builders sold new homes and real estate agents showed existing homes, but Ford said those times have changed. Coldwell Banker Alfonso Realty recently started a new homes division within the company to meet that need, he said.
They want what they see on TV.
Sam Ford, associate broker, Coldwell Banker Alfonso Real Estate
To get the features buyers have seen on TV, “It’s difficult to compete with new homes,” he said.
Subdivisions are flourishing, mostly north of Interstate 10, and even there buyers want perks, he said. About150 lots are available in two subdivisions in Gulfport, Oak Landing and Plantation Oaks, both a short distance from Interstate 10. Of the 25 waterfront lots for sale in Oak Landing, he said all have an area to build a house that is out of the flood zone. Plantation Oaks has fiber optic and the “latest and greatest” high speed internet, he said.
“Some people are particular,” he said, and want to choose the cabinet styles, flooring, colors and fixtures. “Some people say ‘build it like that one,’” he said of the model home.
New subdivisions aren’t coming online fast enough to meet demand, Ford said, and he spends much of his time looking for acreage that fits the criteria for a subdivison, particularly in Ocean Springs, D’Iberville and Woolmarket. Coldwell Banker recently bought a 44-acre tract for 86 building lots, and he said a builder bought the property the same day his company closed on the land.
The new way to buy
With the structural code requirements in South Mississippi post-Katrina it’s still cheaper to buy an existing home than a new one, said Bob Davidge, local founder and managing director of real estate websites Waterfront Liquidators and Farm Liquidators. He started Waterfront Liquidators with 13 properties in Pass Christian and now has listings from Key West to Connecticut and even Honolulu.
Sales are good, he said, with ore than $30 million of the $100 million in properties listed on the website sold.
“Social media has been a game changer,” he said. Byers and sellers communicate directly online, he said, with the listing agent and with others who share their interests in waterfront property or ranches. There are more than 1,100 real estate agents in the three Coast counties, he said, and the ones who are engaged and interacting with customers are the ones who are selling.
The second-home market is typically waterfront and while new homes go up along the beaches South Mississippi, he said owners who held onto their land after the waterfront homes were destroyed by Hurricane Katrina are now listing. Some have decided they are too old to rebuild, he said, but they have emotional ties to the property and are less likely to compromise on price.
“The baby boomers are looking to downsize,” said Mark Cumbest, broker/owner of Cumbest Realty in Jackson County and Gulfport. “Millennials are not looking for big homes,” he said. “Very possibly they would be looking at the same type (of) house.”
There are repairs to the property and repairs to the credit score. Both require maintenance.
Mark Cumbest, broker/owner of Cumbest Realty
What both want are well-built homes with smaller yards, smaller square footage and smaller prices, he said.
Interest rates have been sneaking up, but he said if buyers shop around and have a credit rating in the 720 range, they can get rates of 3.5 percent to 3.9 percent. The typical rate is 4-4.5 percent, he said.
Cumbest is in his 43rd year of selling real estate in South Mississippi and is seeing big changes. “Now the buyer is very well-versed, very educated,” he said. Before they call a real estate agent, buyers have already looked at homes online.
“Just as buyers have gotten more educated due to television and the internet, the sellers also are more reasonable than they used to be,” he said.
The price is right
A challenge now is lenders are having difficulty approving first-time home buyers, Davidge said. “That’s because they have a great deal of student loans,” he said, and heavier debt than past generations. Loan officers report to him that only 10 percent of millennials who apply for a loan for their first home qualify, he said.
Buyers today are first looking at price and then they are looking at a good location.
Ray Gonzales Jr., associate broker and real estate consultant, Ann Prewitt Gulf Coast Realty
South Mississippi homes are still a bargain. The national median price of an existing home rose to a record $252,800 in May. In South Mississippi the median price is $150,578, said Gonzales, and that’s attracting retirees who he said are selling their homes in the Midwest for $500,000, buying a nicer home on the Coast for half that and banking the savings. This year 37 percent of the buyers in South Mississippi paid cash for their home and many are retirees, he said.
Prices have taken a roller coaster ride in the last 12 years since Hurricane Katrina. In 2007, the market was still strong following Katrina and Mississippi Gulf Coast Multiple Listing Service reported the average sales price of a home in the area was $166,900. Four years later, the price bottomed out at $117,400 in 2011, the year following the oil spill and during the recession, and has risen every year since. In 2016, the average price was back to $142,600 and 2017 is ahead of that pace.
“We have made an incredible comeback from the BP oil spill,” said Terri Chiang, marketing and social media manager for Owen & Co. Real Estate in Gulfport. Since 2011, sales prices have seen a steady increase of 4-5 percent every year, she said, and last year prices were up 6 percent.
“This is a positive indicator for a seller,” said Sherry Owen, Owen & Co. owner and broker, “so if you were on the fence of whether it is a good time to sell, the numbers are saying yes.”
Tips for sellers
▪ Do your maintenance, paint and make repairs.
▪ Clean everything.
▪ Landscape. Well-maintained shrubs and yard have a major effect on marketing of property.
▪ Make sure your credit score is as good as you can get it.
▪ Get pre-qualified with a lender.
▪ Look at homes you can afford based on your income.
▪ Be sure the house appraises with enough collateral to cover the loan.
Mark Cumbest, broker
Trends in Coast real estate
▪ Sales price up
▪ Supply of homes for sale and new home lots down
▪ Prices back to pre-Katrina level
▪ At all price levels, buyers want open floor plan, hardwood floors, stainless steel appliances and granite countertops they see on home shows
▪ Hot spots for sales are north of I-10 in Ocean Springs, D’Iberville, Woolmarket and Gulfport, and along the beaches for second homes
▪ Retirees and investors are paying cash.
▪ Most millennials don’t qualify to buy a house until they pay down student loans and increase their income and credit score.
Coast real estate by the numbers
$150,578 is the median price range this year, up 5 percent year to date from a year ago.
$120,000-$249,000 is the most popular price, with 49 percent of all homes closed this year selling in that range.
109 days is average time property is on market, down from 121 YTD 2016
93.3 percent is how much homes sold for compared to asking price, up from 92.7 percent YTD 2016
37 percent of buyers pay cash, down from 39 percent YTD 2016
8.8 percent of sales are foreclosures, down from 12.1 percent YTD 2016 and 40-50 percent during recession years
Ray Gonzales, associate broker and real estate consultant, Ann Prewitt Gulf Coast Realty