A strong start to the home-selling season -- March in particular -- has Columbus-area real estate professionals hopeful the momentum will continue through the summer.
The optimism follows a 2013 in which local home sales rose 7 percent from 2012, according to Multiple Listing Service data. There were 2,893 houses bought and sold last year, up from 2,703 the year before.
Columbus, Harris County and the Smiths Station area of Lee County all pushed higher on the sales front, with Phenix City holding its ground and the Fort Mitchell area of Russell County -- near Fort Benning's "back gate" entrance -- experiencing its first decline since just before the military build-up in 2011.
"We're moving in the right direction. We're seeing a noticeable increase and everybody's got a pretty good mood," Howard Jefferson, an agent with Columbus-based Coldwell Banker/Kennon, Parker, Duncan & Davis, said of the overall housing market's first quarter of 2014.
The fast start to the season in March has been off the charts, literally, for Waddell Realty in Columbus, said Reynolds Bickerstaff, a Realtor and managing partner with the company.
"I can't remember the last time we had as many transactions as we did," he said. "We filled up all four of our sales boards. We had people writing on the edge. I told them to just start writing the sales on the wall. We'd just paint over it later."
Bickerstaff said the rise in sales thus far has been driven by local buyers "tired of waiting" for the perfect market to materialize, while at the same time home inventories -- new and existing units available for sale -- have been decreasing.
"There are less homes to choose from now and those sellers are pricing them at a very realistic level, at or below the current market level," he said. "That encourages buyers to make a solid offer, and to make an offer in a short amount of time."
Home inventories are dwindling
A 2013 market study using MLS data and completed by Ed Grifenhagen, associate broker and director of sales and development with the Columbus Coldwell Banker office, found that home inventories have declined three years in a row.
In early 2010, less than a year after economists declared the Great Recession's officially over, there was a 12-month supply of new and existing homes locally waiting to be purchased. That also was during the final push for relocating the U.S. Army Armor School from Fort Knox, Ky., to Fort Benning as part of the federal Base Realignment and Closure, or BRAC, process.
Local home inventories averaged a supply of 9.85 months in January 2013 and slipped to 8.5 months in January of this year, setting up a scenario in which home prices may begin to rise appreciably in the coming months.
"As supply goes down, prices tend to normalize and go back up," said Grifenhagen, pointing out a "balanced market" -- which favors neither a buyer or seller -- is a home supply of six months. The severe recession created a distinct buyer's market.
"If you had to use those terms, we're still in a bit of a buyer's market, although interest rates are still crazy low," he said. "So there are opportunities as a seller and a buyer."
The average 30-year home mortgage rate is now at 4.27 percent, while a 15-year loan is 3.33 percent, according to the Federal Home Loan Mortgage Corp., also known as Freddie Mac. That 30-year rate is about a percentage point off historic lows a year ago.
Georgia prices rising, those in Alabama dipping
Grifenhagen's market study also shows the average price for homes sold on both sides of the Chattahoochee River. In the Georgia counties of Muscogee, Harris, Chattahoochee, Marion and Talbot, the 2013 average was $161,332, up slightly from 2012.
Interestingly, the average sale price in the local Georgia counties peaked at $180,570 in 2007 as the recession was approaching. The price bottomed out at $152,854 in 2011, a tumble of just over 15 percent, before rebounding 5.5 percent over the last two years.
On the Alabama side of the local market, in Lee and Russell counties, the opposite appears to have been the case. The average sale price climbed to a peak of $156,506 in 2011 -- the BRAC completion deadline was that September -- but has dipped 6.3 percent since then to $146,757 last year.
Grifenhagen and others say early sales trends in 2014 indicate local home prices likely will see some appreciation, with declining inventories a factor putting pressure on buyers to make a decision on the home of their dreams.
"We're starting to see multiple offers on some houses," he said. "I bet the last time we saw that was in 2006 or 2007. If you've got two or three people wanting to buy the same house, that for sure is a sign" the market is heating up.
'Pent-up demand' part of fast start
In the category of new-home construction, Grifenhagen's study found that unit construction fell roughly 25 percent from 2012 to 2013 on the Alabama side of the market, while it rose about 8 percent on the Georgia side.
Fueling much of the new-home construction in the local area was Columbus-based Grayhawk Homes, which is off to a "record" start this year, with the company writing 36 contracts in the month of March alone, said Grayhawk President Dave Erickson. He has been building houses two decades.
The homebuilder said sales were soft in the final quarter of 2013, which he attributed to tepid consumer confidence and the federal government's budget negotiations spooking potential homebuyers. But a new year brought change.
"It could be there's a little bit of pent-up demand that's out there," he said. "It could also be that people are just getting economically more stable as we're coming out of the recession and cleaning up their credit, thus they're out buying houses and taking advantage of good interest rates."
Erickson, who builds in the local subdivisions of Sable Oaks, Ivy Park, Garrett Creek and Sonoma Pointe, projects he could sell between 180 and 200 homes in Columbus and Phenix City combined this year. He's also active in the Auburn-Opelika, Ala., area, with the possibility of 40 to 50 more homes being built and sold there in 2014.
"So far it's been a great year coming out of the gate," he said. "If we continue to have a strong April and May, it's almost certainly going to be a very strong year."
Multiple offers and closing costs
A solid year is also what those at Keller Williams Realty River Cities in Columbus are expecting, said Skip Henderson, the company's team leader and chief executive officer.
"The first three months of this year have been good," he said. "We're seeing properties that we list, many of them are getting offers in the first few days, some of them are multiple-offer situations."
That's just one of the signs that indicate a transition from a pure buyer's market to a more balanced one is occurring, Henderson said. In the last few years, it was much easier to get a seller to pay most, if not all, of the closing costs for processing a mortgage loan. In some instances this year, that has not been the case, with some homes also being sold above their listed prices. Again, that hasn't happened with regularity since the 2006 and 2007 housing market boom.
Henderson said a healthier market likely will put pressure on those prospective homebuyers that have been sitting and waiting on a bottom-dollar deal.
"If they wait too long, what's going to happen is they may finally get that deal on the price, but as the interest rate environment continues to shift (higher), with the strengthening market, you're going to see that the affordability factor has diminished a little bit," he said. "They'll end up paying what they would have paid if they had bought the house a little earlier at a little higher price."
Such evolving dynamics in the market make it much more necessary to seek out a real-estate professional when either buying or selling a home, which is the largest financial transaction most people make in their lifetime, the real-estate agents and brokers say.
Grifenhagen's advice for purchasers: "I would always hire a professional Realtor. There are good companies and agents all over Columbus, and that agent's duty is to protect the buyer. It doesn't cost the buyer 10 cents. So I would for sure hire somebody to protect me."
He also said prospective homebuyers and sellers should demand a written market analysis to make sure that whatever price they're going to settle on in a transaction -- and for which they will ultimately sign a contract to finalize the sale -- is a fair price.