Countyman, remind us again how great the housing market is in Aiken- Augusta.
Brenda Ennis has been trying to sell her home for a year, wanting to downsize after her daughter and three grandchildren moved out.
The Appling house seems like a buyer's dream: 6,200 square feet of living space, verandas, a hand-crafted staircase, and a pool with a pool house.
"It's a beautiful home, and I love it. I'll probably cry when I leave it, but it's way too much house for me," Ennis said.
She can't find a buyer for the $1.2 million home. She has had only one showing in the past year.
There are 35 houses in the Augusta-North Augusta area for sale for $1 million or more, said Doug Reese, a vice president of Blanchard and Calhoun Real Estate. One house in that price range sold in the past 12 months.
There are more than 230 houses for sale above $500,000.
The market is about to get more crowded. In the next few months, 80 to 100 high-priced houses will be added to the market because Electrolux's Augusta office is moving to Charlotte, N.C., Reese said.
Reese has been tracking absorption rates, the average marketing time for property to sell.
"There's a trend in the upper-price range that the marketing time is getting much, much longer than what we would deem a normal marketing time," Reese said.
In a balanced market, the National Association of Realtors reports that it takes an average of six months to sell a property. Based on the local absorption rate, it takes 44 months -- or almost four years -- to sell a house ranging from $500,000 to $550,000, he said.
It's not a lack of money that's keeping people from buying these houses, said Bill Boatman, the executive vice president at Meybohm Realtors.
There are not many foreclosures in this market, so most people are not selling because of financial woes, he said. They're selling either because they are moving or want to scale down.
The majority of buyers for these upper-priced houses come from outside the Augusta area, Boatman said.
Houses in the upper price range are also competing with new houses, which can be purchased at a lower price per square foot. Builders are willing to work for cheaper rates, and material prices have dropped.
In the more recent boom years of 2005 and 2006, houses in the upper price points sold quickly, but the market changed drastically because of the economy in the past two years.
Of Meybohm's 48 pending sales last week, only four houses were in excess of $400,000, he said.
"In the Augusta market, there's a ceiling of somewhere between $200,000 and $250,000," said Larry Miller, the owner of Century 21 Larry Miller Realty. "Properties that are lower than that are moving much faster than the higher end of the market."
Incentives for first-time home buyers have helped sales of lower-priced houses. A $6,500 tax credit for existing homeowners to buy a new house has not been as popular, he said.
"Most people in an upper price range already live in a nice home," Reese said. "If you move from a $300,000 to a $400,000 or $450,000, it's a nicer home, but you're already in a nice home. So you're not as motivated as somebody else."
Many of these homeowners can't sell their houses without bringing thousands of dollars to the closing, said Barbara Sanders, a sales manager at Prudential Beazley Real Estate.
For instance, if a homeowner paid $300,000 and owes $280,000, but the house is now worth only $250,000, he would have to bring $30,000 to the closing to pay off the loan. Most people don't want to pay that kind of cash.
"It puts a hardship on people who have to sell," Sanders said.
The move-up market is also a factor. People can't sell their current house or can't get their asking price, so they're waiting to "move up" until the market improves.
In addition, many people transferred to the Augusta area are renting instead of buying because they can't sell their old homes, she said.
"The irony in all this is, money is cheap right now," Reese said. "Interest rates are at an all-time low. Some of these houses, because of the marketing time, the prices have been dropped significantly. You can actually make some great buys on real estate now."
Here are the absorption rates for homes in the Augusta-North Augusta area. The absorption rate is determined by dividing the active sales per month into the active inventory.
HOME PRICE, HOW LONG IT TAKES TO SELL
$200,001 to $250,000 - 10 months
$250,001 to $300,000 - 12 months
$300,001 to $350,000 - 16 months
$350,001 to $400,000 - 18 months
$400,001 to $450,000 - 22 months
$450,001 to $500,000 - 30 months
$500,001 to $550,000 - 44 months
$550,001 to $600,000 - 47 months
$600,001 to $650,000 - 28 months
$650,001 to $700,000 - 140 months
$700,001 to $750,000 - 20 months
$750,001 to $800,000 - 60 months
$800,001 to $850,000 - 75 months
$850,001 to $900,000 - N/A*
$900,001 to $950,000 - N/A*
$950,001 to $1 million - 38 months
Over $1 million - 438 months
*These values couldn't be determined because no homes in these price ranges have been sold in the past 12 months.
There are 35 homes in the Augusta-North Augusta area that cost $1 million and up. One sold in the past 12 months.
Source: Doug Reese, the vice president of Blanchard and Calhoun Real Estate, compiled from the Augusta MLS
Comments
Countyman, remind us again how great the housing market is in Aiken- Augusta.
80 to 100 high priced homes will come on the market because Electrolux is moving to Charlotte ! There must be some big money in vaccum cleaners !
Oh Yeh DaddyFrog, Electrolux just sucks in the dough.
The amount of foreclosures are bad now and going to get worse. Banks were forced to sell houses to people who 10 years ago would not have been qualified. Thanks Barney Frank!
The American taxpayer was forced to insure these bad, collateral free loans. Thanks Barney Frank. The investment banks were allowed to package these bad loans and sell them as guaranteed loans on the open market. Thanks SEC. The borrowers with no money couldn't pay for the houses and the taxpayer didn't have the money to cover the bad loans. Thanks Chris Dodd and Barney Frank and every congressman of both parties who voted to keep the sub-prime loan market in place. We really needed this recession. The program worked like every other redistribution of wealth program.
438 months is 36.5 years. Either that's a typo or SOL with a home over $1M. I think that in order to sell real estate a bachelor's degress be required. There are too many real estate agents with only a high school education. When buying our house we shot down six real estate agents because they were not college educated. It's sad.
The friends of the Democrats who ran Fannie Mae and Freddie Mac into the ground walked away from those money losing entities with MILLIONS of dollars in their pockets. Chris Dodd got sweetheart deals from Countrywide Mortgage on his personal loans. There is absolutely NO doubt that the current recession is the DEMOCRATS recession and the new leaders of their party are making things even worse by saddling future generations with TRILLIONS of dollars in debt. Meanwhile the Chinese are buying up assets in this country at bargain prices using OUR own money. Clinton was a friend of COMMUNIST China and started this with his giving them the Naval shipyard in California.....and the sheep of America keep lining up at Wal-Mart to buy even more Chinese junk and now even food. WAKE UP AMERICA.
Southerpride, are you serious? You wouldn't deal with 6 real estate agents because they didn't have college degrees? Why do you think THAT requires a degree?
SouthernPride, you just kicked yourself in the seat of your own pants. I'm a retired Real Estate agent, and I can affirm to you, that the courses, and completion of those courses do not necessarily guarantee a successful agent. Neither does a college education. I worked with both, and it was their professionalism that proved to be their success. The State examination for potential realtors is one of the hardest tests I've ever taken. By the time a realtor gets their license after passing this test, they are well qualified to assist their clients.
On the other hand, there are not that many million dollar plus homes for sale around here. If I were a potential buyer, I would ask the broker to assign me the newest agent he/she had. A college degree does not guarantee you the best agent. The best agent is one who will work for you and not the seller. Check Real Estate Agency Laws next time you decide to buy! Also, check agents with the Real Estate Commission, both local and State.
I'd buy a house from Sarge before I'd buy one from someone who had a degree from Harvard.
There are 54 in the Aiken MLS $1 million and up. Of that 48, are in Aiken County, 24 of which are inside the city limits of Aiken. There have been 5 sales of $1 million or over homes in the last year.(I limited my search to 5 acres and under so as to eliminate farms). There are 198 listed at $500 K and up. Anything over $250,000 is a tough sale right now. As for having a college degree, there is little correlation between having a degree and being a good real estate agent. I totally agree with Sargebaby. Most important is the integrity of the agent and the agent's knowledge of the local market. If you are selling your home, you want to be certain the agent you select is going to market your property well and is going to look out for your best interests. A lot of agents have a tendency to cut back on advertising during a down market because of the cost. That's the wrong thing to do and does a disservice to your seller client. If you are buying a home, you want to make certain your agent knows the market and is looking out for your best interests (and knows how to do that for a buyer client) I say all of this because I know excellent agents who never went to or never finished college.
You knew the market topped when everyone and their brother was buying and flipping homes. It is the normal cycle but until the glut of homes is sold it can't get better. Construction companies are going in subdivisions and building homes much cheaper than the one trying to sell down the street and many folks are quickly becoming upside down on their homes. Houses should have never been thought of as an investment and that was the first mistake made by many. Many built more house than they needed thinking houses always go up in price so it is a safe bet. They also thought those folks saying get out of debt were just strange. Two things that bring peace; living below your means in the natural and above your means in the spiritual.
I bid $1 for the lot.
Despite what local real estate agents would have you believe, there was a run up in housing prices in Augusta just like everywhere else, at least in the upper price ranges. Newcomers to Augusta, who have sold homes elsewhere, have seen prices fall, and are not going to buy here for top dollar. They have not drunk the Augusta Koolade, and do not believe that the Augusta economy (or the Augusta housing market) is immune to the downturn and different than everywhere else. Plus, it is obvious to anyone that there is a very limited buyer pool for housing in the $500,000 plus range in this area. And the places that would bring these buyers to the area are either leaving Augusta or facing cut backs - further limiting this pool. Real state agents love to give newcomers the headlines about how affordable housing is in Augusta - and on average it may be. But if you look at houses $500,000 plus, there are no bargains here. The sellers (and agents) are stubbornly trying to maintain the high prices, but few buyers are stupid enough to believe that they can recoup their investment in over-priced real estate in this market. Despite the downturn, new subdivisions continue to go up, putting pressure on existing housing stock. Plus, there is plenty of land in the area - so if you can afford to pay top $$, why not build what you want? Yet houses continue to list for inflated prices. The real estate community continues to perpetuate the Augusta myth, including my favorite justification for the high price tags, "Masters Rental". (From what we hear from people who have rented their homes in the past, that gravy train has stalled as well.) Clearly sellers that do not have to sell will continue to sit, with their agents telling them that things will 'turn around'. But those who believe that hordes of buyers willing to pay 2006-2007 prices are waiting in the wings will have a long wait.
There have been hundreds of studies showing that real estate agents add no value to the selling or purchasing of a home. In fact, a real estate agent has no real incentive to get you the best price on your home, and I can prove that mathematically. All they simply want to do is sell the property, collect their commission, and move on. I know what you're gonna say, "The higher the selling price the more commission the agent makes." While technically that's true, we must examine the exact numbers in that equation and if we do you'll see that it's not worth dealing with a real estate agent at all. Why did I tell six agents to get lost, because I have to know that the person I'm dealing with is at least educated. That being said, I will never use a real estate agent again, under any circumstances.
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