Home sellers have advantage over buyers in Columbus-area market | Columbus Ledger-Enquirer

Those putting their homes on the market to sell this spring in the Columbus area will find themselves with a major advantage over buyers due to a very lean inventory of available dwellings on both sides of the Chattahoochee River.

Ultimately, that means house shoppers wishing to nail down a purchase before mortgage interest rates climb even more in the coming months will need to do their homework and be prepared to act very fast should they see something on the market that they just can’t live without.

Complicating things is the fact that anyone planning to sell their home in the current market climate would be wise to come up with a plan for where they, too, will reside after the sale. That’s whether they plan to embark on a home search themselves in the seller’s market or possibly consider moving into an apartment or other rental property for a period of time.

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Those factors set the stage this year for a local housing market that essentially held its own, but saw little true growth, from 2016 to 2017. Columbus itself experienced a slight drop in sales year over year, while Harris County held steady. Russell County and the southeast portion of Lee County, including the Smiths Station and Backwaters area, saw some growth, according to Navica Multiple Listing Service data.

“There’s a concern that we’re not producing enough inventory to get us out of a seller’s market for a long time, because folks don’t know where they would move if their home did sell, and they wouldn’t have enough time to make a good decision on where they would move,” said Reynolds Bickerstaff, co-owner and chief experience officer at Bickerstaff Parham Real Estate in Columbus.

Overall, Bickerstaff doesn’t see the area’s housing market changing much from a year ago, when 2,036 homes were sold in Columbus and the Midland area of the city, 468 homes in Harris County and 1,168 homes just across the river in Alabama. He said it should still be a good market overall, with the sweet spot for home sales in the $200,000 to $250,000 price range, even with the inventory challenge.

“I just think, typically, if you price a house right, and it’s in good condition, I don’t care where it is, it will sell,” said Tracy Dean, operating principal with Keller Williams Realty River Cities in Columbus. She, too, talked of the need for more inventory, although her office has seen a solid spike in business in the early part of this year.

“The $250,000 to $300,000 range is kind of low right now. There’s not much out there, and there’s not much in the low $200s,” she said. “We could use more inventory in all price ranges, to be honest with you.”

With fewer homeowners selling, at least for the time being, the market has been squeezed, she said. Those who are entering the market to sell with a solid dwelling and with it priced reasonably are not having to sweat what is known as “days on the market.” That’s the average number of days it takes a house to sell. The range locally last year was 93 days in Columbus, 105 in Harris County and 119 in the Russell County and the Smiths Station area.

“I’ve had two or three (homes) that I listed in the last month or so that sold in 24 hours,” Dean said. “I had a seller put their house on the market, it looked good and was priced right, and the first person that looked made an offer ... It’s happening more than it’s not. I see agents getting multiple offers.”

While she expects mortgage rates to reach 5 percent by the end of this year, Dean said that’s still historically low and should not be a major factor for local buyers making the decision to purchase a house this year. However, it could price some out of the home size and amenities they may have been considering before the rate increase.

Bickerstaff does believe the rising rates will “encourage” some people to get off the fence and make a purchase simply to save money over the life of a 15-year or 30-year loan, while also getting them into a higher-priced property right away. That’s why he also urges prospective buyers to sock away as much money as they can for a down payment.

“People often think, oh, I want to buy a $150,000 house. Well, you’ve got to consider what’s in your budget,” he said. “Can you afford to spend $950 a month? Today, that might buy you a $150,000 house. Six months from now you might be looking at a $130,000 price range if you haven’t been saving money to offset the difference in the rate increase with a larger down payment.”

One person who is taking advantage of the lower interest rates and constructing a new home in Harris County is Paul Fincher, a Realtor and director of operations with Kennon, Parker, Duncan & Davis, the local Coldwell Banker affiliate in the Columbus area. He locked into a 4.25 percent interest rate about 60 days ago, and expected to close on his home loan on Friday, with rates now over 4.5 percent and, again, probably headed higher.

Like his real-estate competitors, Fincher said the reduced housing inventory in the area is making an impact. Average home sale prices are up year over year, he said, with days on the market down from a year ago. That trend started last fall, he said.

“As we’ve gotten into the spring, there’s been a lot of demand, a lot of buyers out there, but we’ve been really low on inventory,” said Fincher, whose company trains agents on running a metric on what is known as the “absorption rate.” That’s the period of time, based on computer modeling, that it should take to sell all of the current houses on the market in particular price ranges over a period of time.

“Lately, we normally run a rate of 4 to 6 months of supply, but several criteria I’ve searched for sellers lately (show) we’re at or under two-months supply. That’s a really good thing if you’re a seller because it means you’re competing with fewer homes, and houses are selling for more and faster,” he said.

Fincher, who expects an overall solid market this year for the area, said there is the possibility that an influx of sellers will jump into the market in the coming weeks because of their seasonal mentality that there will be more buyers in general looking to buy a home in the traditional spring and summer seasons. Fort Benning also typically sees permanent-change-of-station troop movements in that timeframe as well, adding to the buying and selling of houses.

“So you probably have a lot of folks holding back and waiting to list (their homes for sale). That’s just a little bit of speculation by me,” he said. “It just seems in the spring rush that the buyers beat the sellers to the market this year ... Still, we’re so thin right now on inventory — and good inventory — it really would take a lot to swing the balance.”

While home sellers should make their properties “clean and show ready,” one primary step that Bickerstaff, Dean and Fincher say is a must for buyers looking for a home in the current market environment is to prepare early and thoroughly. Aside from saving as much cash as possible for a down payment, they should become pre-qualified for a loan with a good, reputable lender.

“Meet with a lender and know your budget and stick to a plan, because when you do find a house to purchase, you have very little time to make up your mind as to whether or not you’re going to be writing an offer. Multiple offers are very common now, and homes are selling in just a few days,” Bickerstaff said. “And make yourself attractive to a seller. You’ve got to think about it: If you were a seller, would you accept an offer from someone that couldn’t provide proof of funds or a pre-qualification letter from a lender when a market’s this hot? You probably wouldn’t.”