Over the last six months, property values have risen on the Northside. Demand for houses has risen so much that it isn’t uncommon to see seven buyers bidding on the same property.
“The trend to overbid to win properties is tremendous, a $200,000 property can be driven up by overbid $5,000 to $10,000,” said Rashida Walker, a Realtor with W Real Estate, LLC and the current president of the Central Mississippi Association of Realtors.
In March, the median price of a Ridgeland home was $246,000. Six months before that, in October of 2020, the median price was $287,000. Since March of 2020, there has been a 2.6 percent decrease in the median price of homes.
The number of homes listed for sale in Ridgeland also decreased. In March, there were 29 homes listed for sale. Six months before that there were 34 houses for sale, indicating an increase in market demand.
According to Stephanie Remore, a Realtor with The Key Consultants Keller Williams Realty, the value of a square foot of Madison property is around $10 to $15 higher than a year ago. For new construction homes, a square foot of property is valued at $180 to $200, while for existing homes it is worth $120 to $165, depending on how many updates were made for it. Since January 1, 2021, there have been 69 new construction home sales and 365 existing home sales—each closed by May 5.
“Madison continues to be popular from the southernmost border to Canton. Since each neighborhood has different price points, there are more buyers than listings right now,” said Remore.
In Jackson, no new houses were listed on the market in March 2021, since a year prior. But, there was a 66 percent decrease of the houses already listed on the market. The median price in homes increased from $187,000 to $205,000 in the six months between October 2020 and March 2021.
The value of property per square foot increased 17 percent over the six months between October of 2020 and March 2021. In March, a square foot of land in Belhaven, Fondren, and Eastover was worth $100.
The supply of houses is also decreasing, which is causing demand to rise. In March, 80 homes were listed for sale, compared to the 118 homes listed in October 2020.
“People are staying in place and don’t need to sell. Then, lots of people refinanced their house, and they most likely are going to wait around six months to put their home on the market,” said Walker.
Don Potts from Nix-Tann and Associates said that the rise in prices of houses is all due to basic economics.
“Well, values are definitely up and it’s all about the law of supply and demand. There’s a low supply and high demand, and we have low interest rates.”
Interest rates are based on the ten year bond. Over the last year the bond has gone up some, but the federal reserve is keeping interest rates down. Also, with a less active economy, due to the pandemic, inflation is down.
In the Jackson metro area, the hot markets are in Belhaven, Fondren, Eastover, and neighborhoods in north Madison such as Lake Caroline. There has also been lots of activity in Bridgewater and Dinsmor.
“I’ve been doing this for 36 years and I haven’t seen anything like this. Normally, when cities like L.A. are booming we’re just rolling along like we always have. But this is different—there’s a shortage of supply and strong demand.”
New construction homes in north Madison are popular right now.
“What I’ve been seeing in new construction is that because the price of building materials has increased, the price of new construction is going up. One house I closed recently up in Lake Caroline was $147 a foot, and now, the same size house is $165 a foot. That’s an increase of 18 dollars a foot.”
Which can quickly multiply to thousands of dollars. Specifically, for this case, that’s the difference between buying an 1,800 square foot house for $264,600 or $297,000.
“Some people are pouring slabs and selling houses before they even build the house.”
Potts says that the hot market isn’t spread out, it’s the entire market that’s booming.
“I’m seeing that it’s all over. I just sold one home yesterday to a young couple doing a fellowship at UMMC.”
All of the hospitals in northeast Jackson attract lots of buyers.
“Well, you got St. Dominic’s, UMMC, and Baptist. Some doctors like to be real close and some don’t. But the one I sold yesterday to the doctor doing a fellowship wants to be close to the hospital because he’s working all kind of hours.
All of this hot activity occurred after the coronavirus pandemic hit.
“Last spring when the virus hit things started picking up. It’s been really strong over the last 6-8 months. I was concerned when the virus came last spring, but then since January 1 we’ve been through the roof.”
“I don’t know how long this will stay, but we’re going to have to ride with it for what it is and Jerome Powell says he isn’t going to raise interest rates.”
It is a seller’s market.