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.

Tax Credit To Be Extended!  Or Not, Or Modified, Or What?!?!

Ok, several websites later, I still don't know myself!  However, it does seem likely that the credit will be extended and modified to phase it out over the next year. 

In  a rider to the Unemployment Bill currently before the Senate, there seem to be several options on the table, and none of the news sites or blog destinations seem to agree on much.  Here's what I've seen:

1 - Credit will be extended through October of 2010, but will reduced by $2,000 every quarter, starting with a reduction to $6,000 on 1 January 2010 ($4,000 on April 1, $2,000 on July 1).

2 - Credit will be modified to 10 percent of the sales price, capped at $7,290.  In this modification, step-up buyers will also be able to use the credit - not just first timers.  These moving-on-up folks must have been in their previous home a minimum of five years.

3 - Credit extended as-is through March of 2010, then reduced $2,000 every three months - phased out by December of 2010 (similar to the 1st option).

4 - Raising the salary cap of the credit to $300,000 per family, $150,000 per individual (currently it's half that).  Also, remove the 1st time home buyer requirement and open the credit to all primary residence purchases.

As you can see, there are several options on the table, and this does not cover all of them.  Per Inman, Bloomberg, The Washington Post, and Jay Thompson (probably the best of the bunch - the Phoenix Real Estate Guy), a deal was reached among Senate Democrats last night to re-write the rider to the Unemployment Bill with the #3 option above. 

It seems likely the credit will be extended, but keep in mind this was only an agreement among Senate DEMOCRATS - it must still pass the Senate itself, the House, and the President.  More to come as I find out.

KW "This Month In Real Estate" -  With Great Tips On Purchasing Foreclosure Properties

Here's the October edition of "This Month in Real Estate" with Jay Papasan.  In addition to some national-level statistics and conditions, there's a short segment on purchasing foreclosure properties - with great tips on what to look out for:

I hope you enjoyed today's post - I'll be back to let you know how the whole tax credit deal works out once it's finalized.

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!

Seems like it might be time to eat a little humble pie and pull back on my projections for April's numbers.  Things are actually looking better!

Pending and Contingency properties as of this writing also appear to point to a robust May, with 719 properties revealed in a quick-sort of Pending sales.  A good number of these will either not close until June or July, and some may just be clerical errors, but I would still suspect we'll get close to - if not exceed - 500 sales for the month of May.

Late postings and other adjustments continue to drive the April sales figures beyond my expectations.  As of this afternoon, there were 400 closed residential (all types) listings in the MLS for April - a number that is sure to go up slightly before the reports are generated on about the 10th.   This exceeds the March sales figure of 389 properties - a good sign since the Masters Golf Tournament (always the first full week of April) usually puts the kebosh on a full week's worth of Buyer traffic in the area. 

The $8,000 Tax Credit, low mortgage rates, and extensive Seller offered-incentives will hopefully help us begin a moderate summer selling season, as we head in to a projected recovery in early 2010.

Well, Sherri and I have wrapped up our first year at Keller Williams Realty Augusta Partners, and at the beginning of this month - I took some time to look over the market statistics for the year and see if I could get a feel for what 2009 may be like.

The 2008 residential sales figures were down 22% over 2007's sales, but 2007 was the second best year ever in the Central Savannah River Area (CSRA).   All in all, 5,011 homes sold in the Augusta area last year.

Townhome sales where a bright spot in a down year.   With 529 townhome sales in 2008 - it became the second best year ever for "residential attached" sales.   For comparison 2007 was the best year ever, with 532 total sales, while the third best year fell way short of both - 2006, with 393 sales.  Proof positive that what we're really going through is an affordability crisis rather than a mortgage crisis.

The "sweet spot" of the housing market was between $100,000 and $179,999.  That sector accounted for fully 46% of all sales.  

The luxury market suffered the most.  Homes with a list price over $350,000 accounted for 6% of all sales.

The best news of the year comes from inventory reduction.  The number of available homes dropped every month since June of 2008 at a high of 4,713.  The end of December number of 3,955 represented a drop of 758 properties or 17% - the steepest drop in available inventory in MLS history.  Since real estate is a supply and demand industry - this is a good sign we may be near the bottom of the trough of this Buyers Market cycle.

Despite all the gloom and doom, CSRA sellers still received - on average - 97% of the list price of their homes when they sold.  This edifies recent media reports of Augusta continuing to see mild appreciation in a nationwide trend of negative appreciation.  When you consider all the foreclosures that get lumped in with those statistics, it's probably more like 98-99% on a regular Seller-Occupant to Buyer-Occupant transaction.

I'll keep more market news in here as things evolve - please feel free to let me know what you think.  I can also send you the reports that back up my data - just drop me a line and I'll get them to you.

All in all Augusta numbers were down, it is tougher to sell your home, and you need to have agressive pricing and excellent terms to offer Buyers if you intend to sell.