Home sales prices rise

The Covington News - - FRONT PAGE - GABRIEL KHOULI gkhouli@cov­news.com

New­ton County’s hous­ing mar­ket is con­tin­u­ing its slow as­cent in 2013, as sales prices rose sig­nif­i­cantly in July and more home builders ex­pressed ten­ta­tive in­ter­est in the area.

While to­tal home sales have been down the past two months – not un­com­mon dur­ing the sum­mer, ac­cord­ing to real-es­tate of­fi­cials – aver­age sales prices con­tin­ued their sharp rise, in­creas­ing from $100,419 in June to $118,529 in July, which is likely due in part to less­en­ing fore­clo­sure ac­tiv­ity.

Mean­while, the mar­ket for new con­struc­tion is tak­ing small steps, be­ing driven al­most en­tirely by buy­ers pay­ing for con­struc­tion, though Cony­ers-based Cas­tle Homes, which is build­ing one of those homes for a cus­tomer, is con­sid­er­ing build­ing a few spec­u­la­tive homes. Kick­ing the tires

“The house that we’re build­ing right now is pre­sale, but we do see that peo­ple’s in­ter­est is start­ing to pick up. New­ton County is start­ing to garner more in­ter­est,” said Cas­tle Homes Pres­i­dent Floyd Lance. “What we’re hear­ing from Real­tors is that they have cus­tomers at cer­tain price points in New­ton County that they can­not fill right now, and it’s my opin­ion there’s enough de­mand in the New­ton County area.”

Lance said his com­pany is con­sid­er­ing part­ner­ing with an in­vestor to build some spec­u­la­tive homes – those with no pre­de­ter­mined buy­ers – but said they’re “talk­ing about step­ping cau­tiously.

“Peo­ple are start­ing to ask and kick the tires (on build­ing in New­ton County),” Lance said Fri­day.

The un­met de­mand is mostly in the $150,000 to $250,000 range, for homes from 1,600 to 2,800 square feet, Lance said.

Much of metro At­lanta, in­clud­ing Henry County, is start­ing to build back up, Lance said, which signals hope when com­bined with the ar­rival of more em­ploy­ees to phar­ma­ceu­ti­cal gi­ant Bax­ter In­ter­na­tional’s plant on the New­ton/ Wal­ton county bor­der.

How­ever, Lance said New­ton County is still an un­proven mar­ket given the huge in­ven­tory of lots, ap­praisal val­ues that re­main low, and lo­cal banks that are work­ing with builders but re­main hes­i­tant.

“Our opin­ion is this mar­ket will grad­u­ally start in­creas­ing, and we may start a few homes to test our the­ory,” Lance said. Smooth­ing out the process

While New­ton County has a lot of de­vel­oped lots ready for con­struc­tion, Lance said it’s not al­ways easy to build on those lots. A de­vel­oped lot that is no longer owned by the orig­i­nal de­vel­oper – nearly all of New­ton County’s lots – re­quires a new builder to get ap­proval from the state to build, which can take 60 to 90 days and cost $1,000 in en­gi­neer­ing fees, Lance said. Lance said the state can change the law, but said he be­lieves it’s also pos­si­ble for the county to change the pro­vi­sion, which he said would pro­mote more home build­ing.

The county has al­ready added other re­stric­tions – in­clud­ing zon­ing over­lay dis­tricts – which Lance said aren’t bad, but do in­crease re­quire­ments on builders. County Chair­man Keith El­lis said the county is try­ing to pre­pare it­self for new build­ing, and is putting in pro­cesses to make sure sewer and wa­ter lines, many of which have sat unused since they were put in five or more years ago, still func­tion.

Many planned sub­di­vi­sions also had roads put in, but be­cause the sub­di­vi­sions were never com­pleted, the roads never had a sec­ond coat of pave­ment and aren’t ready for sig­nif­i­cant traf­fic. The county is try­ing to make sure all nec­es­sary steps are com­pleted – in­clud­ing small things like re­plac­ing man­hole cov­ers– if build­ing starts up in va­cant or half-com­pleted sub­di­vi­sions, El­lis said.

The county cur­rently doesn’t have any­one who can process some land dis­tur­bance per­mits and has to send those out of the county, El­lis said, not­ing the county may work to train a staff mem­ber to han­dle the per­mits. The cur­rent mar­ket

New­ton County saw $11.73 mil­lion in home trans­ac­tions in July, the high­est this year, be­cause of ris­ing sales prices.

Bill Blair, pres­i­dent of the East Metro Board of Real­tors, said the prices are fu­eled by fewer fore­clo­sures and an over­all mar­ket im­prove­ment.

“This is a not a one-time thing, ei­ther; I think you’ll see maybe even a sim­i­lar in­crease this month,” Blair said Fri­day. The num­ber of new fore­clo­sures mak­ing it to the mar­ket for pub­lic pur­chase con­tin­ues to be a trickle, ac­cord­ing to statis­tics from the Ge­or­gia Mul­ti­ple List­ing Ser­vice, which tracks the vast ma­jor­ity of home sales. There were only six new fore­clo­sures that came on the mar­ket in July, com­pared with 43 last July.

“They (fore­clo­sures) have been con­sis­tently down all year, which makes a tremen­dous dif­fer­ence. They were com­ing on the mar­ket and sell­ing for $25,000 to $40,000, sig­nif­i­cantly un­der $100,000. There are not that many left out there any­more,” Blair said.

Part of the rea­son is in­vest­ment firms have been snatch­ing up fore­clo­sures en masse as they’re of­fi­cially an­nounced on the ju­di­cial cen­ter steps, ac­cord­ing to Blair and other agents. An­other pos­i­tive trend is that the aver­age num­ber of days a house is on the mar­ket also dropped, to 91 days in July, though it’s hard to tell if that’s a one-time out­lier, Blair said. How­ever, houses con­tinue to get mul­ti­ple bids from buy­ers, a sign of a more ac­tive mar­ket.

“I think it will con­tinue to be a fast-mov­ing mar­ket to some ex­tent, be­cause in New­ton County in par­tic­u­lar, the houses that are go­ing to be sold are re-sales, be­cause there’s noth­ing be­ing built,” Blair said. “The in­ven­tory is not go­ing to im­prove sig­nif­i­cantly, be­cause peo­ple are still go­ing to be grab­bing what they get.”

As far as ac­tive list­ings, New­ton County had 570 in July, fairly con­sis­tent in 2013, though num­bers have steadily dropped over time. There were 2,356 ac­tive list­ings in July 2008 (aver­age price $137,407), 1,554 list­ings in July 2009 ($107,957), 1,115 list­ings in July 2010 ($67,656) and 805 list­ings in July 2012 ($83,730).

The ques­tion now is when builders will stop kick­ing the tires and start jumping in.

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