Real Estate Information Archive

Augusta Real Estate Year in Review - 2009

There were a total of 4,902 residential sales in the CSRA in 2009,* down 4.65% on 2008's total (5,141).   This marks another consecutive drop in sales since a high of 7,014 properties sold in 2006.  In short, roughly 2,000 fewer homes sold in 2009 than in 2006 (30% fewer). 

On a positive note, Augusta ended 2009 with five straight months of sales equal to or better than 2008.   This can primarily be attributed to the $8,000 tax credit program and attendant increase in 1st Time Home buyers (some estimates place 1st timers as over 50% of the market).

Resale properties actually suffered more of a downturn than the 4.65% above indicates.  Resale properties only accounted for 3,250 of last year's sales - down over 10% on 2008's total of 3,625. 

New construction rebounded - showing an INCREASE of almost 9% over 2008.  Last year, 1,652 new homes were purchased in the Augusta area - up from a low of 1,516 in 2008.   This marks the first increase in new home sales since 2005.

Those of you familiar with our local industries know that in the beginning of 2009 a game-changer came to town in the form of Crown Builders.  Crown, I believe an Atlanta-based builder - began selling McMansions at Happy Meal prices in the Augusta area in 2009 in several subdivisions - among them Willhaven, Iris Glen, Berkley Hills, and Ivy Landing.   Buyers in Columbia & Richmond Counties, and now Aiken-area residents in South Carolina -are gobbling up these properties and their surprising size.  With a lower price point than anyone in Augusta was used to, their impact cannot be overstated.  As the rest of the country's builders continue to see stagnant sales, our area actually INCREASED volume in new construction sales. 

What does it all mean?

First and foremost - if you planning on selling a resale property this year - GET BUSY DOING IT.  It takes much, much longer than you probably expect to get a buyer in this market, pricing must be agressive, and the condition must be tip-top to expect any kind of interest whatsoever. 

The tax credit injected some much-needed relief in our local area.  November's sales where 60% higher than November of 2008.  Considering most November sales originated in October or September, it seems obvious the anticipated expiration of the $8,000 credit got many buyers off the fence.  As you probably know, the credit was extended and expanded, and now expires 30 April 2010 (you can write a contract that closes as late as June, but the contract MUST be binding as of 30 April).

The expiration of the tax credit, along with some serious revisions in lending practices - particularly for FHA - mean we may endure yet one more year of stagnant sales before a true rebound in the housing market in Augusta takes place.  FHA Buyers will only be allowed 3% in Seller Contributions (vs. 6%), thereby increasing the amount of money a buyer will need to purchase a home.  

FHA is also raising the Mortgage Insurance Premium from 1.75% to 2.25%.

Conversely, FHA is considering amending lending rules to allow 580-credit score purchasers to get a mortgage with a higher downpayment.

In summary, we endured another down year in real estate, but new construction experienced some much-needed relief, and government incentives did inject some late-year energy into the housing market.

I expect 2010 to remain flat, with robust - if not increased - sales in the first quarter and a half, but a quiet summer with sales comparable to 2009's numbers.  Fall and winter of 2010 will be flat, perhaps below 2002 numbers - unless other economic efforts yield results (jobs, jobs, jobs).   This is not necessarily a bad thing - we have to hit bottom, this may be it.  The future is bright, as long as you interpret that to mean 2011 and beyond....

* - data is from the Greater Augusta Association of Realtors Multiple Listing Service and does not include unlisted properties.

OK, SO WHY AM I LATE?

I'd planned on a more comprehensive update on the 1st Time Homebuyer Tax Credit by now - so I apologize to those of you who have no doubt been hanging on the edge of your seats, waiting on the next great missive from yours truly.

The Credit expires on 30 November, and unfortunately, as of this writing, we still have no comprehensive decision by the Administration.  By my count, there are at least nine Senate or House Resolutions to extend, modify, increase, or otherwise edit the benefit.  These proposals range from increasing the credit to $15,000 (and increasing the income requirement), removing the “1^st Time” label and making it available to any purchaser buying a primary residence – to simply keeping the current credit in it’s 2009 form and extending it until June of 2010.  More to come, I’m sure. 

WHAT DOES THAT MEAN TO ME?

Depends.  From a purely business perspective – I want the credit extended, increased, and modified (not just for 1^st timers).   It has increased our business – and that’s how I feed my family.  As a voting American – I do not.  Using the US Treasury as an ATM only increases the deficit.  Someone’s going to have to pay for it in the long run, and the Wall Street Journal predicts extending the credit until June of 2010 (with no modifications) will cost an additional $16.7 billion.  How do you get rid of a deficit?  Tax more.  I don’t want that. 

SO, WHAT’S UP IN AUGUSTA?

Some stability has been injected into the market – and Columbia and Richmond Counties continue to see numbers that compare favorably to 2008’s figures.  Keep in mind that year pretty much stunk – down almost 48% on our best year ever – 2006 – so we’re still in a slow sales mode – it just hasn’t gotten worse.

For the first time since 2006, overall residential figures increased for September over the previous year.   Sales for 2008 totaled 414 properties, while September of this year tallied 417.  A relatively insignificant increase – but significant in the fact that it is the first increase in sales since the housing crunch began.

Columbia County posted higher numbers for September over last year, with 170 sales (2008 – 162), while Richmond County posted it’s third straight increase over the previous year – 172 properties (2008 Sep – 163). 

New Construction for this year seems on track to have a slightly slower year than 2008.  Considering 2008 (1,516 sales) marked the worst year for new homes since 2002 (1,483 sales), this is NOT good news. 

With three months to go, New Construction sales have tallied 1,182 homes sold as of 30 September 2009.   Although that works out to an average of 131.33 homes per month – the October-December sales period is always slower than the summer months.  I anticipate another down year, approaching the 2002 number.

PLEASE TELL ME WHAT THIS MEANS!

According to the National Association of Realtors – 1^st Time Homebuyers now account for 48% of all home purchases – up from 38% pre-2006.

If the tax credit is extended – this should continue.  If it’s modified - it should increase sales.  If it is allowed to expire - sales will slump through early spring.

Not a big deal if you’re in the trade and you’re proactive in your business planning – a very big deal if you’re not.  Sales are always slower in the winter months, and typically start picking up in late February and March.  Should happen again – with or without the credit.   

If the only reason you’re buying a home is to get a tax credit, you probably need some more extensive financial counseling than I can offer you here – to include a urinalysis.  On the other hand, if you DO buy a home, and take advantage of a program designed to stimulate the housing market – more power to you!  Spend wisely!

THE PROMISED “NOTHING TO DO WITH REAL ESTATE VIDEO:”

Our men & women in uniform never cease to amaze me.  I’ve seen this video many, many times.  I’m including it here simply because I cannot help but admire the ingenuity, creativity, humor, and dedication of these Sailors.  It is “make-me-giggle-good,” and you’ll surely want to get up and dance before it’s over!  Enjoy!

Thanks for reading, thanks for watching - leave a comment!  Have a fine Navy Day!

There's some good numbers out there from August sales, which continue to indicate the Greater Augusta area may be at or near the bottom of the housing crunch.  I'll add a word of caution at the end of this post, but for now, enjoy....

Residential Single Family Homes Post Gains

For a market that began 2009 down 24% on 2008's horrible numbers, things have perked up nicely.  Three months of this year have posted 1% single family home gains on last year.  April, July, and August of this year all saw increases year-over-year in home sales.  These numbers are limited to single family homes, and exclude townhomes, condos, and mobile (manufactured) homes.

Richmond County led the charge, posting 175 sales for July, and 169 sales for August (vs. 2008's numbers of 140 and 138, respectively).

Columbia County sales continued to mirror 2008's number quite closely, with 196 July sales, and 171 August closings this year.  This compares favorably to '08's numbers for July (198) and August (175).

The Identity of Today's CSRA Home-buyer

* - numbers include ALL residential sales, including townhomes, condos, and manufactured homes.

The Promised Party-Pooper Punchline!

OK, things seem to be sucking less, and the numbers tend to indicate we may be at the bottom of this downward spiral we began in mid-2006.  Here's a great big reason why all of this may not mean doodley-squat come November:

The $8,000 First Time Home-buyer Tax Credit expires on 30 November. 

Although statistics on 1st Timers in our market are hard to come by, I do believe they have helped lead the way out of this market - in part because national statistics indicate anywhere from a 7%-10% increase - with First Time Home-buyers accounting for 48% of all sales in some sectors of the country.

Regardless of whether or not you support the tax credit, it is undeniable that it has led to an increase in sales.  Some critics claim the credit actually costs taxpayers over $40,000 per home - others that the economic benefit (nationwide)  far outweighs the cost.

If you want to weigh in with your government representatives about extending this credit, you can find your Congressmen and Senator's contact information by clicking here.

I hope you've enjoyed this blog - and relish your comments - please feel free to leave a note with  your opinions.  Thanks again for visiting.

Are We FINALLY At The Bottom of The Barrel?

Richmond & Columbia County Sales

Although overall Greater Augusta Association of Realtors MLS numbers for the entire Central Savannah River Area (CSRA) where down over July 2008 (515 July '09 sales vs. 536 in July '08) - Columbia and Richmond County tallies told a much different story.

Columbia County's sales remained flat for the second month in a row - numbers for June (235) and July (229) of this year where virtually identical to 2008's June/July figures of 237 and 234. 

Richmond County - after posting a dismal 25% drop for June 2009 (157) over 2008 (205), showed a modest increase in July - with 192 sales versus the '08 figure of 175.

If August MLS data is similar, it would be a very strong indicator that we have reached rock bottom in the housing market slide in the CSRA.

REALTYTRAC.com figures for Augusta

According to RealtyTrac.com Augusta's average resale price (not foreclosures) has risen steadily for the last four months.  From a record March low of $110,529 to a July average sales price of $145,561.

Hephzibah - the other major area of Richmond County - bottomed out in October of 2008 with an average sales price of $107,319.  July's average for Hephzibah was $150,845.

The summer months always bring increased sales in any market, and the price point trends higher during the May-August time frame, but these numbers still exceed 2008's by several thousand dollars.

REALTYTRAC.com figures for Columbia County

The three main population centers of the county are Evans, Martinez, and Grovetown.  I analyzed the average sales prices by zip code, and here's the results from RealtyTrac:

Average sales prices in Evans have plummeted.  The average price of an Evans home in June of 2008 was $261,823.  July of this year that average fell to $219,516.   The highest month's average in all of 2009 was May - $243,948.

Martinez - home to many of the older single family homes due to it's proximity to the primary industries in Augusta (and therefore a lower price point) - also saw a dramatic drop in average sales price.  From a high of $185,943 in August of 2008 to July's average of $156,138.

Grovetown - the newest and fastest growing area of Columbia County - has remained somewhat immune to a drop in average price.  June's average was an all-time high - $198,166, and although July's number was lower ($172,454) - it is still not far off the previous high of August of 2008 at $179,519.

 So Are We There Yet?

It remains to be seen if the bottom of the market is occurring right now.  As I stated earlier, I'd like at least one more month of data to decide if the end is really in sight.  If August sales remain level with 2008 - or even post increases - I'll be jumping for joy with the rest of you. 

There is - however - a GREAT BIG PILE OF STINKING DUNG LOOMING ON THE HORIZON.

THE DEATH OF THE $8,000 TAX CREDIT

On 30 November of 2009, the $8,000 First Time Home Buyer tax credit expires.  If you have not closed by that date - you are not eligible for the credit.

First Time Home Buyers account for nearly half of all purchases in today's market - up nearly 10% on pre-2006 figures.  There is little debate that the tax credit has led to this massive increase in first time purchasers.  Some real estate and mortgage websites even claim the percentage of first-time buyers would have been in the low 30% range - had there not been this added incentive to buy.

Is There Hope?

In a 23 June post - the very awesome Jay Thompson- also known as the Phoenix Real Estate Guy - wrote an outstanding blog post about five different bills before Congress designed to expand or extend the 1st-Time Home-buyer Tax Credit.  You can read that post by clicking here.

In short, unless you've been living on the moon - you probably know that there's a golden rule in Government - "Most Bills Die In Committee."  I expect at least one of these bills to be modified and implemented prior to the November deadline, or we'll be seeing very dismal winter housing sales.  Just remember - if you don't vote - you don't count.  Contact your representative to remind them these bills are critical to the recovery of the housing sector.

I hope you enjoyed this latest entry - and relish any comments you may have - good, bad, indifferent... 

If you'd like to see me focus on a particular sector of the housing market or local area, I'd love to hear your recommendations.

While reading a most awesome post by Matt Stigliano on Agent Genius, I made a decision to digress from my usual blogging fare and write about life.  It's about my life, but I think it may be about yours too.

Of the last six weeks, we've had out of town company staying with us for four (in two-week stints).   School started today (think of shopping, open houses, sales tax holidays, etc...).  It's been hectic.  If you've read my past entries, you know Housing numbers haven't exactly been kicking butt here in Augusta.  Work has been tough - and my wife and I have had to find other sources of referrals and leads to accommodate the shift in the market - all while entertaining various relatives and getting the kids ready for school.

Last Wednesday, I joined three of my Keller Wiliams buddies on the golf course for some R&R.  If you know Shea, Ricky, and Rod - you know the "R&R" really stands for "Ridicule and Ribbing."  We're a moderately competitive bunch - intent on holding our own while ensuring no missed shot goes unpunished (at least in the verbal jousting category).   Rod hit a tee shot a whopping fifteen feet, which I promptly followed with "A lot of guys wouldn't have played it like that."  You get the gist...

By the time I got home (it had been about 96-degrees with high humidity), I was soaked, tired, hungry, and HAPPY.  The five hours-plus I'd spent with these friends - full of good-natured ribbing and genuine camaraderie - sweating, swinging, and putting in the hot Georgia sun - was an absolute BLAST.  I'd put my phone on "silent" and forgot to turn the ringer back on.  Got home, joined my wife and kids by the pool, and grilled up some good dinner.  I had one of those nights' sleep you remember - woke up rested and refreshed - and ANXIOUS to get back to work.  Noticed my phone ringer was still off - and I'd missed several calls.  None of them life-threatening or urgent.

At the office later that morning, I realized that it was the first time in a couple of weeks that I was fully focused, energized, and confident.  The bottom line is I had not taken the time to replenish my batteries.  The stresses of entertaining, working, shopping, minor car troubles, LIFE - had gotten me down, snuck up on my usually-positive demeanor and changed me briefly to someone else. 

Take the time - EVEN IF YOU HAVE TO MAKE IT A SET APPOINTMENT ON YOUR CALENDAR.  Take the time to hug your kids, kiss your spouse, play golf, play whatever you want, dance in the rain, skinny-dip, whatever.  Turn OFF your phone, get away from the computer.  TAKE THE TIME.   Ever hear of Nicklback?   Listen to the words to  "If today was your last day."  Go forth and DEGAUZE yourself!

By the way - I birdied 18 to secure a six-stroke victory.  Talk about a GREAT DAY!

For the next four days, through midnight on 2 August 2009, Georgia will be having a "Sales Tax Holiday."

Per the Georgia Department of Revenue, the following items will be exempt from all local and state sales taxes:

Articles of Clothing. The exemption applies to articles of clothing and footwear with a sales price at time of purchase of $100 or less per item. There is no monetary limit on a purchase as long as the price of a single item does not exceed $100. Clothing accessories such as handbags, umbrellas, etc. are not exempt.

Personal Computers. A single $1,500 or less purchase of a personal computer (PC) and/or related accessories is exempt. The exemption does not require the purchase of a “personal computer base unit” (tower, desktop, laptop) and is extended to peripheral devices such as modems, printers, speakers, non-recreational software, etc. If a single purchase exceeds the $1,500 maximum the entire purchase is taxable. A single purchase is considered the total of all sales made to a customer in one visit to a store.

General School Supplies. The exemption applies to the purchase of general school supplies with a sales price at the time of purchase of $20 or less per item. There is no monetary limit on the purchase as long as the price of a single item does not exceed $20.

The list of tax exempt computer supplies from the Department of Revenue's site can be found by clicking here.

The list of exempt school supplies can be found by clicking here.

Finally, exempt clothing articles can be found by clicking here.

Hope this helps!