If you care enough about the real estate industry that you are reading this blog, I am sure you are quite familiar with the year over year housing market stats you see on the news. These stats are certainly important, because they show us trends in the real estate market over the past year, but what if there was a way to identify these same trends BEFORE they are actually trends? As a meteorologist, who happens to have a minor in mathematics, statistics are my specialty, so I decided to dig a little deeper into the numbers and see if any trends are developing in the short term that show signs of turning into long term trends. This is a fairly new thing I have been doing for the Augusta, Columbia County, Fort Gordon, North Augusta and Richmond County area, but what I have done below is calculate many of the same stats such as average price, months of inventory, etc. on a quarterly basis and then compare those numbers to the previous quarter. You may be thinking this is not a “apples to apples” comparison, because the market seasonally fluctuates so much. There is certainly truth to that; however, if inventory normally declines from summer to fall because of fewer people listing, but this fall it was to increase, that would be useful information. In addition, rather than give you a bunch of stats for the whole nation or even the Augusta area as a whole, I have compiled stats for each large and small town in the Augusta area. You may be surprised just how different the market in North Augusta is from Evans, or Grovetown, or even Greenbrier High School district. Read on to see how your community performed to close out 2021. Note: The pricing trends pictured below are annualized and reflect what would happen if the Q4 -2021 trends were to continue for an entire year.
Let’s break down the numbers one at a time. First, you will notice that inventory remains low – very low with just roughly 9 days of inventory in Martinez. I mean, have you tried to buy a house in Martinez lately? The calendar may have said Christmas week, but I had a client go under contract to buy a home there and had to compete with 5 other offers – CHRISTMAS WEEK! This has been the trend for while, and while homes are popping up everywhere you look, I can’t see inventory levels improving enough to make an impact anytime soon, especially in places like Martinez, where there just isn’t a ton of room left to build new houses.
Next, let’s take a look at prices around the CSRA. In Columbia County, Richmond County and North Augusta combined, there were 2,350 closings in Q3 (July-September) with a median sale price of $245,000 and median list price of $244,450. In Q4 (October-December), there were 1929 closings with the median sale price unchanged at $245,000 and the median list price down slightly to $240,000. This means prices were basically unchanged for the second half of 2021 with average list price dropping by 1.8 percent. It will be interesting to see if this will result in future declines in prices, but as you can see in the Q2 vs. Q3 analysis I did in September, Q4 was the second consecutive quarter that Columbia and Richmond Counties have experienced declines in median home price compared to the previous quarter. However, if you dig into the numbers for each individual town in the CSRA, that was not the case everywhere. North Augusta, Evans and Grovetown all continue to see double digit increases on an annualized basis. I am not sure if this is the case in North Augusta, but the continued increases in Evans and Grovetown can surely be attributed to the continued influx to Fort Gordon.
So, what can we look forward to in 2022? Let me preface by saying that the following is just my OPINION, and many, many things, like the economy and interest rates, make the real estate market about as predictable as the weather, but leaving those things out of the equation, I think it may mean that the Augusta real estate market has peaked, with the exception of those areas impacted by the growth at Fort Gordon. The latest Fort Gordon Growth Management Plan Newsletter predicts an additional population growth of about 22 percent in Columbia County and 5 percent in Richmond County by 2030. That is a huge number for Columbia County, so I think it makes sense that the markets in Evans, Grovetown, and Harlem will continue to grow for at least a few more years. For the rest of the area, I think it means a return to sanity is coming soon, especially if interest rates rise in 2022 the way economists are predicting.
Does this mean it is time to sell? For those that have owned their home for at least 3 years, I do not foresee a “bad” time to sell. However, selling at the first of the year can have its advantages. The main advantage to selling as early in the year as possible is that you pay less taxes at closing. Remember, taxes for the current year are prorated between buyer and seller and must be accounted for at closing, so if you close on January 1, the seller only owes 1 day worth of taxes to the buyer at closing. Close a few months later on June 30, and you have to pay half of that year’s taxes at closing. That can add up to a thousand dollars or more. This is really significant if you no longer live in the home you plan to sell.
For buyers, the beginning of the year can be a challenging time to buy a home. First, the seller advantage mentioned above is a disadvantage to you as the buyer. Inventory also tends to be seasonally low in the winter months, so there may not be as much to choose from as during the peak summer months. However, I have found that sellers who are willing to sell during the “off months” in the market tend to be more motivated, and motivated sellers are more willing to negotiate, meaning the potential for better deals.
Whether you are a buyer, seller, or both, I think it really depends on your NEEDS. If you need a home, and it happens to be January, go for it. Interest rates are still as low as they will ever be. If you just got a new job out of town and need to sell your home in Augusta before buying a new one, go for it. Homes are still going under contract in days for more than list price in most cases, so call me, and let’s talk about your options. I hope to hear from you soon. Thanks for reading!