Chris Tamor of Phenix City knows all too well how tough the local housing market has been coming out of the Great Recession.
Those passing by the Fifth Avenue -- or Riverchase Drive -- home he has had for sale about two years get the message loud and clear. A large sign in the front yard exclaims: PRICE REDUCED $50,000.
“I’ve had it sold about five times and then, when it comes to the financing, people just can’t get financed,” Tamor said of the 3,058-square-foot brick house he bought to remodel and resell.
The four-bedroom, three-bath property near Idle Hour Park appraises for $320,000, he said, and was originally listed for six months by an agent for $309,000. His sign now offers it for $50,000 off an even lower asking price of $279,000.
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“I’ve been doing it about five or six years now,” Tamor said of his remodeling projects and home flipping. “This is basically the first one that I’ve got hung out on. But the market tanked about three months before I got it finished.”
Asked Thursday if he thinks the dwelling might finally sell in 2012, he responds, “I’m hoping.”
That’s the big question facing the Columbus and Phenix City-area housing market coming off a 2011 that saw home sales rise about 3.3 percent from 2010 following a decline of nearly 5 percent in 2009, according to Multiple Listing Service data.
Preliminary figures show 2,827 homes were sold collectively in Columbus, Harris County, Chattahoochee County, Phenix City, Fort Mitchell and the Smiths Station area last year. That’s up from 2,737 in 2010. However, the median sales price slipped from $158,699 to $155,901, or about 1.7 percent, year over year.
“I would say that 2011 was a fair year in real estate locally, not a whole lot of improvement, but we didn’t go backwards,” said Jack Key, a partner with Coldwell Banker/Kennon, Parker, Duncan & Key, a Columbus-based real-estate firm that does business in Georgia and Alabama.
“It took us a long time to get into this and to get this deep into it, and it’s going to take a while to get out,” he said. “I think we’re looking at several years, really, to gain a lot of traction in getting our (home) values back.”
Factors that influenced the market in 2011 included the culmination of a six-year Base Realignment and Closure process that brought the U.S. Army Armor School to Fort Benning. That and other post expansion moves originally were projected to boost the local population by 28,000 men, women and children. The number was revised downward last year to about 20,000.
The Columbus-Phenix City apartment and rental market also continued its hot streak, with more properties being built and more people than expected -- soldiers and civilians -- opting to lease rather than commit to a 15- or 30-year home mortgage loan.
Real-estate agents on both sides of the Chattahoochee River got their expectations up over the last few years that an influx of Fort Benning-related people would ignite a boom market, said Reynolds Bickerstaff, a Realtor with Columbus-based Waddell Realty.
“It’s not that 2011 was a bad year. But it was expected to be a lot more,” said Bickerstaff, who also believes consumer confidence -- or the lack thereof -- helped take a bite out of any prospective sales.
“A lot of consumers just aren’t confident right now in the housing market, even with the rates being low and prices for real estate being at levels that we haven’t seen since 2000 or 2001,” he said. “They’re just not confident in the job market or confident that they’re going to get a return on investing in a home.”
Financing for a new or existing home also has become more troublesome with lenders having raised their requirements amid a stream of federal regulations aimed at protecting consumers from unscrupulous companies and themselves. In essence, loans without a hefty down payment have virtually vanished.
“You might qualify income-wise to meet the payments that are required to purchase a $300,000 house,” Bickerstaff said. “But you may not meet the down-payment requirements. You may not have enough cash on hand to meet those lending guidelines. Some people start to get a little concerned that they’re having to put down 10 to 20 percent to purchase a home.”
It’s those critical issues -- financing and BRAC fading into history, as well as the overall uncertainty in the U.S. economy -- that will shape what kind of year 2012 turns out to be on the home-sales front, say real-estate professionals.
Homebuilder Dave Erickson, for one, is bracing for a much more difficult period because of more intense competition for a shrinking pool of prospective homebuyers. The president of Columbus-based Grayhawk Homes said his company closed on 248 home sales in 2011. But he expects that to possibly fall as low as 200 this year.
“I expect the whole region to drop off for new construction a fair bit,” he said. “I can see other competitors dropping off 50 percent or more easily. There’s no longer an abundant number of people coming in looking for a house everyday. It’s now a few here, a few there.”
Erickson said he’s noticed other builders, particularly those who ventured into the market to specifically build for BRAC, have started becoming aggressive with discounts, apparently to clear out inventory and raise cash.
Phenix City, specifically, did see a drop of more than 12 percent in homes sales from 2010 to 2011, although the southern Russell County burg of Fort Mitchell continued to sizzle. The unincorporated community near Fort Benning’s back entrance saw an 18-percent leap in sales year over year as the Armor School’s move was completed in September.
“They’re still selling homes down there, but not quite at the pace that they were before,” Key said. “We’ve noticed some builders have increased their selling-side commissions significantly to try to move some inventory down there.”
Pricing pressures are having significant impact in multiple areas of the housing industry, said Bradley Jones, president of the Greater Columbus Homebuilders Association. He and his father, Brock Jones, are prominent Columbus-area builders who construct custom dwellings and do some remodeling work.
Builders have had to keep an eye on costs over the last couple of years, said Bradley Jones, while also being mindful of avoiding construction of riskier speculative homes in areas not already proven for attracting buyers. It’s a balancing act, he said.
“I think what you’re seeing is we’re having to offer more open floor plans and larger homes for less of a price than we’ve been getting in the past,” he said. “We’re achieving that mainly by working with the suppliers and subcontractors to get our costs down. Everybody’s just trying to do everything they can to keep their costs down.”
Acknowledging that 2011 was a “slow” year for many area homebuilders, Jones said the hope is that those left standing in the industry have weathered a storm that won’t get any worse.
“There should be a little bit of progress, but not a whole lot,” Jones said of 2012. “I hope things don’t go the opposite way ... I hope we’re going to have people who think that the market’s at the bottom and feel it’s the right time for them to buy a home.”
Key, of Coldwell Banker, also prefers to take a more optimistic approach to a housing market that could go either way in terms of sales depending on the myriad factors now in play. He points out that mortgage rates are now at record lows of less than 4 percent, the stock market seems to have a bit more positive energy and consumers may be sensing home prices won’t fall much, if any, lower.
“I would say that if they’re not at the bottom, they’re pretty darn close,” Key said. “The inventory levels are shrinking a little bit. That’s a good thing, because prices will never heal until the inventory reduces and gets back to a more neutral level.”
The number of homes now for sale in the Columbus metro area is just over 1,500, according to the MLS statistics. That’s the lowest level since July 2009 when 1,600 homes were on the market. The current supply level is about 10 or 11 months, while a “neutral” market would be about six months.
“The market is heavily weighted to buyers right now,” Key said. “If we can get that level down to six months or so then it would be back to a healthy market with price appreciation.”