The Columbus housing market strongly favors sellers in mid-2021, a trend that may not end until the end of the year.
Homes are moving fast and buyers are paying more in the Columbus area, according to Chris Jiles, broker of Re / Max Champions Realty in Columbus and former president of the Georgia Association of REALTORS. Most ads sell out within about 40 days, he said. It takes around 30 days to complete the home closing process – leaving a given property with around 10-14 days on the market.
“Over the past six months, we’ve entered what can best be described as a strong seller’s market,” Jiles told the Ledger-Enquirer. “We are seeing several offers on homes in just a few days on the market. The prices were raised. People pay more than the asking price.
This means that the housing market in Columbus is strong, despite COVID. And the bubble may not burst anytime soon.
The average Columbus selling price in July was $ 214,626, an increase of 11.7% year-over-year, according to the Columbus Board of Realtors. In neighboring Phenix, the average July selling price rose 9.9% year-on-year to $ 208,273, according to the Alabama Board of Realtors.
Sellers in Columbus have traditionally participated in the closing costs of a home, as buyers and sellers generally share the costs.
“We don’t see any of that now,” Jiles said.
Buyers in today’s market cover all of their closing costs, Jiles said, with sellers not involved.
The number of days a house is listed on the market has fallen. As of May 2020, the average number of days on the market was around 68 days. In May 2021, that number dropped to 44 days, Jiles said. Interest rates are also at historic lows, well below 5%.
Georgia Governor Brian Kemp viewed real estate as a vital industry, Jiles said, so agents worked during the pandemic.
“I would have thought that COVID would have slowed down our market simply because people wouldn’t have wanted people to come to their homes and potentially bring disease,” he said.
Northern buyers moving to states like Georgia and Florida are one of the reasons home prices have skyrocketed, according to Coldwell Banker real estate agent Dedrick Josey.
Others are “cash rich” buyers who have recently sold their own homes and are using the funds for the full purchase price of a home, he said.
“Sellers tend to engage or entertain cash buyers rather than buyers who require a contingency, which is normally a loan,” Josey told the Ledger-Enquirer.
Will the bubble burst?
If the bubble bursts, don’t expect it to happen this year.
The strong seller market is expected to continue “for the remainder of the year,” Jiles said. This is partly due to the low interest rates.
“A 3% interest rate is not that unusual (in today’s market),” he said. “The lowest interest rate I have ever had was 6 5/8%, and I was proud of it. I’ve seen houses with 12% interest on them before.
Josey said he encourages buyers who may need the unexpected to save as much money as possible, so their offers are competitive. He also tells them to look to other loan products, such as conventional loans from a bank.
“It’s difficult for (the real estate agent) and your client to navigate a home search if you don’t have what the sellers are looking for financially,” Josey said. “And that’s money.”
Millennials, young people, and those drawn to the city by Fort Benning and other large employers play a role in the city’s housing market. Millennials make up the largest share of home buyers in the country, according to the National Association of Realtors.
Almost a third of millennials said COVID-19 caused them to start home hunting earlier than they expected, according to a survey by data firm Clever Real Estate of 1 000 people planning to buy a house next year.
Columbus’ economy is also expected to experience a continued recovery after the pandemic, according to the UGA’s Selig Center for Economic Growth.
“You better know where you’re going to live when you put your house on the market,” Jiles tells potential sellers, “because you’re going to be moving in 30 days. “