An inside look at the Mississippi Coast real estate market and why prices are going up
Many business industries in South Mississippi have been hurt by the coronavirus pandemic, but real estate isn’t one of them.
When the order came to shelter in place in March, “Our industry was allowed to continue working as an essential service,” said Joe Rogers, CEO of Gulf Coast Association of Realtors in Gulfport.
People who were in the middle of a transaction continued with the closing, and those looking to buy a home could do so, even if it was mostly online.
It developed into a perfect storm for those looking to sell their homes fast, and for the top real estate agents who post on social media each month they sold more than $1 million in real estate in South Mississippi.
“The Gulf Coast real estate market is now a blazing hot seller’s market thanks to the combination of low interest rates, favorable financing terms and limited inventory selection,” said Ray Gonzales, associate broker with Berkshire Hathaway HomeServices, Biloxi. He’s been selling real estate in South Mississippi since the 1970s and said he expects the boom to continue into 2021.
Interest rates are historically low — “The best anybody’s ever seen, really,” said Kenneth Jones, vice president of land development for new home builder Elliott Homes. People who were on the fringes of whether to buy are doing it now, he said.
“We’re just as busy as we were pre-COVID,” Jones said. Elliott Homes is building in 13 subdivisions across the three Coast counties . As those areas are built out, he said, the company is preparing to open more.
Interest rates are as low as 2.25% to 3.35% for those with good credit, said said Don Blaize, a mortgage broker and area sales manager for CMG Financial in Biloxi.
“I call it free money — almost,” he said.
But there is more than those low rates driving this boom, he said, and it’s something brought on by the pandemic and the desire to escape the cities.
Here’s the secret
The market transitioned from a lot of first time homebuyers at the beginning of the year. Since the pandemic, “We’re seeing a huge influx of people relocating to the area,” Blaize said.
“The ‘Secret Coast’ is no longer a secret,” he said, referring to the tourism brand by Coastal Mississippi tourism marketing agency.
Lots of people are moving to South Mississippi from bigger cities, like Atlanta and Dallas, Blaize said, and colder climates.
If there is a second big phase of the coronavirus, he said, they don’t want to be stuck in the cities.
Florida is overpriced, he said, and for those looking at South Mississippi, “It’s so much more affordable — even than New Orleans,” he said.
Why buy homes on MS Coast?
“The money is flowing right now,” Blaize said, “especially down here on the Coast.”
Buyers are drawn to South Mississippi by the low cost of living, low property taxes and friendly people, he said.
A study released in August by RefiGuide.org shows how Mississippi compares to the rest of the country.
“The most affordable state in America for homebuyers is Mississippi,” according to the study, “followed by Ohio and Oklahoma. Each of the top 12 most affordable states are in the South and Midwest.”
The coronavirus added to the cost of new construction across the country and on the Coast, with over 100% increase in lumber prices, just due to the coronavirus, Jones said. Prices for raw materials haven’t increased, he said, just finished lumber as the industry got backlogged during the shutdown.
What buyers want now
The coronavirus changed a lot of things, including what buyers are looking for in a new home. That open floor plan isn’t so friendly for people working at home.
In May, the National Association of Realtors reported more home buyers are asking for home offices, yard space for exercising or growing food, and space to accommodate family.
Elliott Homes finished its first natural playground at Cedar Crescent Subdivision in Biloxi just before the pandemic hit, Jones said.
“People are wanting to get back to nature and let their kids play how they played,” he said. This new design that is popular in cities is more in the dirt and not so structured as the typical playground. He recycled excess lumber, drainage pipe and other supplies from the site work to design and create a kids’ area with tree houses and places to slide and climb.
Big demand, limited supply
In previous years, buyers had between 4,200 and 4,800 homes to select from in the six southern counties, Gonzales said.
“Right now we are showing a total number of homes available to be 2,638,” he said. Only about half —or 1,349 — are actually available, he said. The rest are under contract and awaiting closing.
“Homes that are in decent condition and priced correctly have been getting offers within 3 to 7 days after coming on the market,” he said. Those that aren’t priced right will sit, he said, because the buyers are educated. “They’re not going to overpay,” he said.
With short inventory and strong demand, “That’s why we have multiple offers,” said Miriam Chong, who owns MiriamChong.com real estate company. She’s also seeing a lot of military moving to the Biloxi area.
“It was really high this summer,” she said.
The hot spots are Ocean Springs, Biloxi and D’Iberville, in large part because there is less inventory there, Jones said, and because there is a larger supply of new homes
“Diamondhead has gotten a lot of interest as well,” he said.
How good is it?
The average price of a home is at record highs in the Coast counties and selling for $20,000 more than a year ago, Rogers said.
For the first seven months of the year in the local Multiple Listing Service area:
- The average selling price of a home is $190,319 compared to $177,137 in 2019
- 3,696 homes were sold, an increase of 139 from this time last year.
- New listings so far this year are 4,983, down from 5,311 at this point in 2019
In July the average selling price was $203,553, up $21,000 from July 2019.
“And it’s not just one month,” Rogers said the Gulf Coast Association of Realtors is seeing. “It’s a trend.”
This story was originally published September 17, 2020 at 5:45 AM.
