Mississippi housing market crack opening – The Clarion Ledger, Jackson, Mississippi, USA
By Reporter – Gary Pettus
Sunday – June 28, 2009
Matt Saunders lives and works in Memphis, but his house sits empty more than 200 miles away.
Since December, the former Jackson Preparatory School coach has tried to sell his home in Pearl’s Silver Ridge subdivision. He’s had no offers.
“I had this great opportunity to take a head football coaching job in Memphis, and had to leave before I could sell my house,” said Saunders, 29.
“I knew it would be tough; any time you turn on the news, you hear it’s a buyer’s market.”
Selling a house in this economy can be frustrating, especially if you’re in a hurry.
But there are signs that the luck of the seller is turning.
“Whether it’s a buyer’s market or a seller’s market depends on a lot of things,” said Don Potts of Nix-Tann Realty in Jackson.
“In places like Phoenix and Las Vegas, it’s definitely a buyer’s market.
“Here, it’s more balanced.
“It depends on where the house is, what the competition is, how long your house has been on the market.
“If you’ve already moved to Pennsylvania and are making two house payments, you’re definitely at a disadvantage.”
Still, houses in a certain price range are easier to sell than others, Potts said, especially those listed between $175,000 and $225,000.
In this market, though, buyers sometimes play hardball, and lowball the price.
“They hear on the news that housing prices are down nationwide by, say, 20 percent and they think, ‘Well, heck, I can buy a house for 20 percent less than they’re asking for it,’ ” Potts said. “That’s not necessarily the case.”
Apparently, it’s less likely to be the case in the Jackson metro area.
A Brookings Institution study shows that, nationwide, the average price of a house fell by 6.3 percent; that was for the first three months of 2009, compared to the same period for 2008.
In the Jackson metro area, though, the average price was up slightly: 0.6 percent.
More recent figures from the Jackson Association of Realtors mix good news with bad.
The bad: For the first five months of 2009, the number of housing sales is down in every sector of the metro area studied, compared to the same period for 2008.
The decreases range from 8 percent in Madison to 57 percent in Ridgeland, where there’s little land left to develop, said John Jenkins, president of the association.
“Ridgeland is pretty well built out.”
The good news: “In the metro area, the number of pending sales for May is up 30 percent compared to 60 to 90 days ago,” Jenkins said.
“Those sales should be closing in June or July.”
More good news: For a few towns, the average sales price has jumped during the same period: 2.6 percent in Brandon (outside the Reservoir area, which saw a 6.5 percent drop), 3 percent in Madison; 8 percent in Byram.
In Jackson, the figures show an 8.8 percent price rise – from $70,381 to $76,609.
But that’s the lowest sales price for all areas covered in the association’s calculations, including Ridgeland, Madison, Clinton, Byram, Brandon and Brandon-Reservoir.
Madison claims the highest average price: $249,800.
In Madison, Beth Kellogg and husband Stuart put their house on the market this month for under $500,000.
“We had an offer within a week,” Beth Kellogg said.
“It was so fast, we don’t know where we’re going to live. I’m looking for a new house right now.”
Kellogg’s Realtor, Michele Rumbley, also was impressed.
“It’s a little bit unusual for a $500,000 house to get an offer that quickly,” she said. “But if it’s priced well and it’s in great condition, it will sell.”
Rumbley, who works exclusively in Madison County, has seen within the last three months a drop in the inventory of homes for sale, she said.
“In my opinion, it’s because builders are building fewer homes. Our supply has dwindled. Last year, we were in a market that was flooded with newly constructed houses.”
Still, said Realtor Dan Grimmett, “there are more people who are selling homes than are buying, obviously.”
Grimmett is trying to help Saunders, the football coach, sell his home for $153,500.
But, after six months of no offers, Saunders, who’s single, is considering ways to sweet-talk buyers, such as helping with closing costs.
“One problem with selling my house in Pearl is that there are about 150 others in that price range in Rankin County alone,” said Saunders, who’s living with relatives in Memphis.
“I’ve had to sell a house before, around 2002 or 2003, but it only took three weeks.
“It wasn’t today’s society, or today’s economy.”
In this economy, the housing market is still “extremely weak,” said William Gunther, director of the Bureau of Business and Economic Research at the University of Southern Mississippi.
“And housing markets are extremely local. You can have one neighborhood doing extremely well and another one nearby going downhill.
“If I’m a qualified buyer, it’s a great time, because the prices are low and the mortgage terms are low.
“If I’m a seller, it depends on where I’m located.”
As for low interest rates, they also help the seller. They had been lower, but they’re still relatively good – recently, around 5.5 percent for an FHA loan on a 30-year fixed mortgage, Potts said.
And sellers have another ally: a maximum $8,000 tax credit for first-time home buyers, as well as for those who haven’t owned a home within the past three years.
In Mississippi, it isn’t available – at least not yet – to be used for a down payment. The amount is credited on tax returns for a refund, Potts said.
“That should stimulate selling, up and down the line.”
Whatever happens to the market, said Saunders, “I’m trying to stay positive.
“Every single day, I wait for that phone call to tell me that someone has put an offer on my house.”
To comment on this story, call Gary Pettus at (601) 961-7037.