Jackson Area Home Sales Plummet – Clarion Ledger, Jackson, Mississippi www.clarionledger.com
Reported by Jeff Ayres
January 25, 2009
It’s tough to sell a house these days. Just ask Brandon resident J.P. Martin.
He has not only seen prices plummet and inventories swell as he tries to sell his Byram home, but also must contend with a new round of payments at his new home in Rankin County.
When he put the 4-year-old Byram house up for sale more than seven months ago, the asking price for the 1,300-square-foot, three-bedroom, two-bathroom house was $124,900. It was lowered to $119,000 last week.
More price reductions may not make a difference, Martin said, as an ongoing credit crunch makes it more difficult for many people to buy homes.
“We’ve had quite a few people walk through and say, ‘It’s one of the nicest houses in the neighborhood,’ but people who want to buy can’t get qualified (for loans),” Martin said.
His plight is being felt across the state as housing prices largely continue to fall.
A Clarion-Ledger comparison of Jackson Association of Realtors sales data for the weeks of June 6 and Jan. 15 offers a glimpse at the metro-area market.
The data show a majority of submarkets have seen asking prices decline while the number of days on the market rise.
The data do not reflect actual sales prices, and the National Association of Realtors won’t release figures for the final quarter of 2008 until March.
The Flowood-Pearl and southwest markets saw the largest percentage decline in asking price at 10 and 9.5 percent, respectively.
The north Jackson, Madison-Ridgeland, Crossgates-Brandon and U.S. 49 South to Florence remained flat with prices changing less than 1 percent.
“We are beginning to experience the effects of the (national) housing market, not to the extent that it’s being felt in other areas,” says Lynette Magee-Praytor, general manager of Crye-Leike Realty’s Mississippi offices.
While home prices are dipping, that doesn’t mean people aren’t buying homes, she said.
Many foreclosed homes are selling at lower prices, generally below $150,000, and that can drag down the average sales figure for a particular area, she said.
A number of homes are being sold not to homebuyers but to investors who may resell them in the future, said John Jenkins, president of the Jackson Association of Realtors.
Demand slips tremendously for homes at $200,000 and up, area agents and brokers said.
Nationally, pricier homes are proving less popular with buyers because of higher utility costs and other expenses, Jenkins said.
Michael Anthony is having trouble selling a less-expensive home in Prentiss.
He bought the 1,600-square-foot house in August 2007 for $53,000. The home is 60 years old with three bedrooms, two bathrooms, high ceilings, a front porch and a small yard.
Since putting his home up for sale in May, the asking price has dropped from $59,500 to $52,500.
Anthony says the price may come down more if no buyers emerge.
“It’s a nice home for a small family,” he said before conceding, “It’s definitely a fixer-upper.”
But no one has given the home a serious look, and Anthony worries about having to hang on to it along with two homes elsewhere in the state that he plans to keep.
Martin said he paid $117,750 for the Byram home in February 2007 and planned to stay there awhile. But he and his wife both have since found jobs about 45 minutes away and wanted to move closer to their workplaces.
A major reason prices haven’t improved across the board, Magee-Praytor says, is because lending standards have become more stringent for those seeking a home loan. Homes sales slow when fewer people can buy, she said. “The higher-dollar homes require a conventional loan or a jumbo loan” or a combination of the two, she said.
But Doug Maselle, who operates Century 21 Maselle and Associates, says people are scared off by news of tightening lending practices and other dire economic trends.
If someone’s willing to be more disciplined financially, he says, they can buy a house for a reasonable price, even in the current economy, and lenders will work with them.
“I just want to scream when I hear that,” Maselle says of what he calls misconceptions that good buying opportunities are scarce. “You just pay a little higher interest rate if your (credit) score is low.”
Jenkins says the area’s housing market likely has bottomed out, adding January is typically slow for housing activity.
What’s tougher to predict, he said, is whether a significant improvement in prices and sales will start later this year or next.
“The Jackson market will have a quicker response,” Jenkins said. “We may be here for a few more months.”
Maselle is encouraged by the decrease in listings on Jackson’s Multiple Listing Service from about 4,900 properties last year to 3,800 this year.
But he concedes some of those homes are from people pulling their homes off the market after not finding a buyer.
A person with a home sitting on the market should consider many factors – such as his reason for selling and the amount he plans to spend on his next home – when trying to decide what to do, Maselle said.
The options vary depending on the homeowner’s situation and needs, he said.
Magee-Praytor said another option is to refinance if the owner has enough equity.
But both real estate professionals suggest consumer confidence is the main factor in determining when the housing market will turn around.
Magee-Praytor says several provisions that could be included in a proposed national economic stimulus package may help.
They include removing a repayment requirement from an already-approved $7,500 tax credit for first-time homebuyers and applying that credit to all homebuyers; making permanent FHA, Fannie Mae and Freddie Mac loan limits that are set to expire; and creating a federal mortgage interest buy-down program that would make below-market rates available to buyers.
“It’s a confidence issue,” Magee-Praytor says. “(Homebuyers) feel like they can take a look, provided they have a good credit score and 3 percent down payment.”
Maselle adds consumers will feel better about buying a home if interest rates remain low, in turn helping stabilize prices.
To comment on this story, call Jeff Ayres at (601) 961-7050.