Home prices in Newton County continued their steady rise in August as the local market continues to shift away from bottom-dollar foreclosures to higher-priced traditional sales.
The 96 homes sold in Newton County in August went for an average of $119,484, up more than $5,000 from July.
Prices have risen for three straight months, and one of the biggest reasons is there are fewer houses selling for under $100,000. The ones that are in that price range are selling above their asking price, said local RE/MAX agent Marshall Ginn.
From March 3 to Sept. 3, the 405 homes sold under $100,000 have been purchased for 101.2 percent of the listed price. Ginn said many buyers in that range are able to pay cash, thereby avoiding the appraisals that banks require for mortgages and allowing them to pay more than an appraisal might say a house is worth.
In other, slightly higher-priced cases, Ginn said buyers are putting more money down to reach a deal when an appraisal might not come in at what the seller and buyer think a home is worth. Sellers are also coming down on their prices, in some cases because they have enough equity built up in their homes to walk away with some cash, even if a home doesn’t sell for its original price.
"It’s a shame we have to look at the past to determine the future, but that’s the way we’ve got to do it," Ginn said, noting that low appraisals are still causing issues despite rising prices.
When he and fellow RE/MAX agent Scott Alexander price houses for sellers, they use an appraiser mindset, trying to price houses on a similar price per square foot basis as are other homes in the neighborhood or surrounding area.
Once homes get above $150,000, though, the sales-to-listed price ratio is a mixed bag, and isn’t universally trending up, though the number of higher-priced houses being sold is increasing.
"I think we’re going to continue to see appreciation. You won’t have wildfire appreciation where houses are appreciating 3-5 percent per year," Ginn said.
Ginn didn’t have any new advice but reiterated that sellers need to be prepared to meet the appraisal, and buyers need to get pre-qualified and be prepared to pay a down payment.
One of the most interesting trends Ginn sees is investors are turning to raw land since foreclosures are dwindling, and profits can’t be made on higher-priced houses as consumers will only pay so much to rent properties.
"Land prices are still a deal, still very depressed. That’s where the bargains are," Ginn said. "With how cheap land is selling — and there is a lot of land for sale — people got cash and are buying it to sit on it. As the market does come back, they’ll be able to sell to developers."
During the housing craze, land prices were sky high, with lots in Newton County selling for $50,000 or more apiece, Ginn said. But now they’re selling for $5,000 – $6,000 apiece.
Ginn sold a whole subdivision in December with 45 developed lots and 100-plus acres for $125,000. Another buyer purchased 19 lots in a good subdivision for $3,400 a lot.
In Covington, the barely-developed Dorchester Place subdivision off Conyers Street had 108 of its lots sold for $8,518 apiece, according to data on the Multiple Listing Service, lower than the asking price of $14,200 apiece.
"They probably made a good investment, and in four to five years, they should make some money," Ginn said.