Is housing crisis starting to creep into local market?
By Jim Phillips
July 31, 2008
When The Athens NEWS looked at the state of the local housing market in March, local realtors and lenders suggested that the Athens area was not feeling much effect from the collapse in housing values that was (and still is) ravaging many other parts of the country.
Revisiting that issue four months later, the picture doesn’t look quite as rosy. Some local housing professionals still insist that the famed Athens “buffer effect” remains largely intact, and is keeping the housing market here on a relatively even keel. The general optimism is apparently starting to fray a bit at the edges, however.
“I’m actually selling more homes,” reported Joe Paintiff of the Athens Real Estate Company. “I have seen prices drop a little bit, but nothing compared to what is going on nationally. Everybody’s reducing prices, but it doesn’t seem to be as drastic as what you’re seeing nationally. In some places, prices are falling by 15 or 20 percent. That’s not happening with our listings.”
Realtor Wil Chandler of Athens Realty was rather more pessimistic. “This is a buyer’s market at this point,” he said. “It’s not dire, but it’s definitely something sellers need to keep in mind.”
Chandler said the symptoms of a downturn can be seen in houses staying on the market longer, and sellers consequently bringing down their asking prices.
Liz Maule, owner of Liz Maule Realty, was more upbeat. Though she acknowledged seeing a slowdown in the increase in local home values, she said they certainly haven’t stopped climbing.
“Maybe we haven’t appreciated as much as we would have in other years, but it’s still growing, still heading up as far as I can see, especially in town,” she said.
Asked whether sellers may be dropping their prices significantly in order to move their homes, Maule said she believes local sellers are being “realistic” in the prices they’re asking.
“I think we’re doing fine,” she said.
Maule did note, however, that the troubled housing market elsewhere does seem to be having an effect on the market here, though in an indirect fashion.
This arises, she said, when people move to Athens from elsewhere, and sometimes need to put off buying homes here until they can sell their homes where they used to live. If their former addresses were in markets where houses aren’t moving very well, she said, this can indirectly slow down sales here.
Bob Drain does home appraisals for the county auditor’s office, for tax purposes. Typically an appraisal for taxes is lower than what a house will sell for, though as Drain pointed out, the state requires that the appraised values of the county’s homes not be too far below their actual selling prices.
Though there is some lag time in the auditor’s numbers as far as following trends, Drain said he hasn’t seen any clear signs yet that housing values are dropping, at least inside Athens.
Noting the double-digit price plunges that have been reported in some big urban markets such as those in California and Connecticut, Drain said, “it would be difficult for me to believe that we’re going to see the kinds of declines they have. The market in Athens has historically been very stable.”
He noted that the price of this stability has been slower increase in home values than in other markets, adding that he sees no evidence that this slow, steady growth is stopping or reversing.
He picked as an example a home on the near east side of Athens, for which the county has a list of several actual sale prices going back 16 years.
The house sold for $73,000 in 1992; for $82,900 in 1994; for $125,500 in 1998; for $166,000 in 2005 – then just this February, changed hands for $202,000.
“If (a price collapse) is coming, we haven’t really seen it yet,” he concluded. “The percentage of increase may have slacked off a bit, but as far as a decrease in values in the Athens housing market, I’m not seeing it.”
Drain warned, however, that the stability he sees tends to be associated with better-quality homes, and that the lower end of the market may be more volatile.
Though it’s a rather crude measure, the number and size of new mortgages in the county gives some idea of the state of the housing market.
When the NEWS looked at those numbers in March, going back to September 2007, it found the number of new mortgages (which includes those on commercial properties) to have held steady between about 130 and 150 a month, with the amounts ranging between about $14 million and $28 million monthly.
In the last four months, lending activity seems if anything to be up a bit.
There were 157 mortgages generated in April, at a value of more than $29 million. That was up to 167 and more than $23 million in May, leaving out one seven-figure mortgage which was probably a commercial property. In June, leaving out two very large mortgages, the numbers were 180 mortgages and almost $35 million. July to date saw 171 new mortgages, for more than $29 million, again leaving out one very large outlier.
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