Residential sales, values in Middle Georgia trended upward in 2015

Kathryn and David McGehee bought their house in north Bibb County 10 years ago, just before the real estate crash and the Great Recession.

It was one of the largest houses on the block in the Barrington Hall subdivision in northwest Bibb County.

Trying to sell it promptly and at a profit about two years ago turned into "a nightmare," Kathryn McGehee said.

"I don't know how many houses we saw that we loved, and somebody would buy them from underneath us because we couldn't afford two homes."

It took about a year and a half to sell their house. And it came at a price.

"We lost $99,000 plus the cost of a new roof (in order) to sell the house," she said.

But last year the McGehees sold their home and found another one that was just what they were looking for. They wanted a little more land, space where their adult son could live independently and a main level guest room for her father-in-law whenever he might need it. They found the "perfect" house about a mile away in the Plantation Oaks subdivision.

"Timing is everything," she said. "We love our (new) home, and it had only been on the market a couple of months. If our house had sold sooner we would have missed this house. It ended up a win-win for everybody."

Their experience was reflected in home-sale trends across the midstate in 2015. Actually, the number of homes sales has been moving upward in Middle Georgia markets the past few years.

Last year, 2,079 houses sold, according to the Middle Georgia Multiple Listing Service, which includes mostly Bibb, Monroe and Jones counties. That's the highest total since 2007, when 2,420 houses sold. In 2010 -- three years after the recession officially began and about a year after it ended -- just 1,600 houses sold in the same area.

The average selling price for all residential real estate in the Middle Georgia MLS has been mostly going up since the end of the recession. The average selling price in 2015 was $134,389. By comparison, it was $104,923 in 2010 and $143,258 in 2006 -- the lowest and highest averages during the past 10 years.

A similar trend was evident in Houston County last year.

"Our sales, both the number of units and the values, were up, which is very encouraging," said Elaine Lee, senior vice president of residential sales for Fickling & Co. in Warner Robins. "It was just a good, good steady year. Our average sales price has gone up, and that's kind of consistently been doing that the past few years."

Foreclosure sales, which can bring down averages, are becoming less of a problem, Lee said.

"For years, 30 percent of sales were foreclosures in Houston County," she said. "For last year, it was 13 percent."

The average selling price in Houston County last year was $159,762, the highest it's been during the past 10 years, according to data compiled by the Central Georgia Multiple Listing Service.

"Probably the challenge we have had is the challenge nationwide, and that is we only have a four-and-a-half to five-month supply of homes," Lee said. "People have been unable to sell and recoup money they have put into their homes. So, a lot of folks are not putting it on the market."

When that happens, it creates a seller's market because there are not many houses available for buyers to choose from, she said.

"Prices are coming up, and more folks are coming to the closing without having to bring money to the table," she said.

Guy Gunn, vice president of residential sales in Fickling's Macon office, said some of the increase in activity is due to pent-up demand, and some of it is because people are getting a little more comfortable with the economy.

John Conn, a broker with Conn Realty in Gray, said he's seen similar results in the northern area of Middle Georgia.

"In the resale market, we are finally seeing the values come back a little bit for sellers," Conn said. "These houses were underwater for five years and the market slowly pulled back out, and appraised values slowly started to come back up."

APPRAISAL PROCESS CAN CREATE CHALLENGE

By the nature of their business, appraisers "are looking over their shoulder at what happened in the rear-view mirror," Gunn said. "They want to know what sold in the past six months," which is a factor appraisers use to arrive at a comparable price.

But Gunn said there is a problem with that process, and it can affect values.

"The textbook definition of value is the willing agreement between buyers and sellers," he said.

There have been situations in which buyers and sellers agreed on a price.

But when an appraiser looked at what sold in the surrounding area in the past six months, the comparable amount was lower than that agreed-upon sale price.

Then the sellers have a choice to not sell the house -- or lower the price. If the price is lowered, then that becomes part of the comparable price for other sales in the area.

But Gunn doesn't blame the appraisers, saying "That's just the nature of the appraisal process. Appraisals can drop like a rock if the market is going down. But when the market is going up, you have to pull it and struggle to get it up."

He added, "Right now our inventory is extremely low. What that should mean is you've got stronger demand and weaker supply, then prices should go up. But unless appraisals support that, then that can't happen. ... But they have to support their opinion with factual data."

Gunn said the most recent recession has hampered home prices more than past economic events that caused values to go down.

"It is because the recession has increased the pressure from lenders and increased oversight," he said.

But Gunn and other real estate agents are optimistic that the upward momentum from 2015 will continue in 2016.

"Most economists seem to be positive about it, so we hope that will happen," he said. "We hope that pent-up demand will continue. If interest rates start trending upward, that sometimes gets people to make a decision to buy. So, it should be pretty positive."

But politics could play a role.

"An election year sometimes causes a little distraction."

To contact writer Linda S. Morris, call 744-4223, or follow her on Twitter @MidGaBiz.

Annual Home Sales

Macon-Bibb County* Houston County**

Year Houses sold Avg. selling price Homes sold Avg. selling price

2015 2,079 $134,389 2,119 $159,762

2014 1,850 $117,120 1,816 $151,189

2013 1,859 $107,222 1,718 $149,015

2012 1,783 $105,014 1,513 $145,931

2011 1,672 $105,728 1,422 $150,330

2010 1,600 $104,923 1,571 $151,404

2009 1,800 $115,685 1,663 $145,547

2008 1,947 $129,736 2,173 $146,264

2007 2,420 $141,614 2,940 $148,083

2006 2,602 $143,258 3,299 $150,113

*Middle Georgia Multiple Listing Service (includes mostly Bibb, Monroe and Jones counties)

** Central Georgia Multiple Listing Service (includes only Houston County)

This story was originally published February 6, 2016 at 8:22 PM with the headline "Residential sales, values in Middle Georgia trended upward in 2015 ."