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2019 Market Wrap Up

Posted by Jennifer Banker on Sunday, August 18th, 2019 at 6:14pm

SSI Deals Newsletter

Click to verify your subscription to SSI Deals Newsletter. This week we have a market wrap up; next week are back to Pending Foreclosures...

August 18, 2019

Michael & Jennifer Banker

912-638-1808

Mike@BankerRE.com

 

Our Views of the 2019 Market So Far

 
Soak It Up

30 Day Summer Market Wrap Up - Contracts, Pending and Sold

 

Summer market is coming to a close. In the last 30 days, 34 properties have been put under contract, 40 pending properties and 63 sold properties. Below is a bit more information about what's we have seen happening on the island and learned about what's happening in the country.

 

The St. Simons and Sea Island, Georgia, real estate market has had a complex year, similar to the nation-wide real estate market. Of the 34 active contingent properties, meaning properties that are under contract but are not without contingencies, 13 are in the south end of the island (near the beaches), 19 are in the middle of the island (off Frederica Road), 2 are in the north end of the island and none are on Sea Island.

  • Active Contingent: SSI and SI Data (July 10 - August 10, 2019)
  • Median: 3 beds, 3.5 baths, 1,899 $/sq. ft., $207. 38, Days on Market ("DOM"): 87, List Price: $442,000
  • Minimums: 2 beds, 1 bath, $97.84 $/sq. ft., Days on Market ("DOM"): 7, List Price: $172,900
  • Maximums: 5 beds, 5.5 baths, $569.48 $/sq. ft., 6,145 sq. ft., DOM: 482, $2,300,000
  • Averages: 3 beds, 3.5 baths, $233.90 $/sq. ft., 2,199 sq. ft., DOM: 131, $552,125

 

There are also 40 pending properties, meaning properties that are under contract with no more contingencies. Of those, 16 are in the south end of the island (near the beaches), 24 are in the middle of the island (off Frederica Road), no properties in the north end of the island and none on Sea Island.

  • Pending: SSI and SI Data (July 10 - August 10, 2019)
  • Median: 3 beds, 2 baths, 1782 sq ft., $203,51 $/sq. ft., DOM: 78, List Price: $345,950
  • Minimums: 2 beds, 1 bath, $127.47 $/sq. ft., DOM: 1, List Price: $149,900
  • Maximums: 5 beds, 4.5 baths, $546.88 $/sq. ft., 3,911 sq. ft., DOM: 1,159, $899,000
  • Averages: 3 beds, 2 baths, $225.96 $/sq. ft., 1,838 sq. ft., DOM: 140, $410,481

 

What's Sold - July 10 - August 10, 2019

During the last 30 days, there have been 63 sold properties sold. Of those, 29 are in the south end of the island (near the beaches), 27 are in the middle of the island (off Frederica Road), 4 are in the north end of the island and 3 are on Sea Island, Georgia.

  • Sold Properties: SSI and SI Data (July 10 - August 10, 2019)
  • Median: 3 beds, 2 baths, 1825 sq ft., $198.51 $/sq. ft., DOM: 126, List Price: $399,900, Sold Price: $389,900, 97% SP/LP
  • Minimums: 1 beds, 1 bath, $123.29 $/sq. ft., DOM: 15, List Price: $176,000, Sold Price: $175,000, 83% SP/LP
  • Maximums: 6 beds, 7& 2 1/2 baths, $836.40 $/sq. ft., 6,719 sq. ft., DOM: 407, List Price: $2,95,000, Sold Price: $2,550,000, 100% SP/LP
  • Averages: 3 beds, 3 baths, $243.76 $/sq. ft., 2,103 sq. ft., DOM: 154, List Price: $587,138, Sold Price: $554,972, 96% SP/LP 

    

 

What's Sold - July 10 - August 10, 2018

During the same 30 day time period in 2018, we found 79 properties sold. Of those, 27 are in the south end of the island (near the beaches), 42 are in the middle of the island (off Frederica Road), 4 are in the north end of the island and 5 are on Sea Island, Georgia.

  • Sold Properties: SSI and SI Data (July 10 - August 10, 2018)
  • Median: 3 beds, 2.5 baths, 2,160 sq ft., $195.42 $/sq. ft., DOM: 84, List Price: $427,000, Sold Price: $400,000, 97% SP/LP
  • Minimums: 2 beds, 1 bath, $114.51 $/sq. ft., DOM: 6, List Price: $128,000, Sold Price: $125,000, 79% SP/LP
  • Maximums: 12 beds, 9.5 baths, $945.47 $/sq. ft., 5,760 sq. ft., DOM: 855, List Price: $4,000,000, Sold Price: $3,929,380, 101% SP/LP
  • Averages: 3 beds, 3.5 baths, $231.87 $/sq. ft., 2,327 sq. ft., DOM: 128, List Price: $593,371, Sold Price: $564,489, 96% SP/LP

    

 

Summary

What we have noticed when studying the St. Simons and Sea Island, Georgia, market is a slight decline in the number of sales when comparing 2018 and 2019, and both were a slight decline off 2017 sales. Overall average sales price has dropped off when comparing between 2017 and 2019.

 
 

Rates are Low and Mortgages are cheap so WHY aren't more houses Selling?

Interest rates are dropping and American mortgages are cheaper than they've been in years. The US economy is strong. That's a recipe for a booming housing market — but it isn't booming at all.

 

In June, the National Association of Realtors reports that existing home sales decreased 1.7% from May and 2.2% from a year earlier. That's about on par with where home sales were in 2015. America's housing market has stagnated for four years.

Last week, the 30-year fixed-rate mortgage fell to its lowest level since November 2016, according to the Mortgage Bankers Association. The average rate on a loan below $484,350 now stands at 4.01%, while the same 30-year mortgage for a higher loan balance has a 3.96% interest rate.

Mortgage rates have fallen as the Federal Reserve cut interest rates for the first time since the financial crisis last month, and the 10-year Treasury yield fell to its lowest level in nearly three years this week. The central bank's rate cut will make adjustable-rate mortgages cheaper, while long-term loans — like the standard 30-year mortgage — track the 10-year Treasury yield per the National Association of Realtors.

 

The White House shows that statistically American paychecks are growing and consumer spending is robust. Plus, unemployment is near a 50-year low. 

So what is keeping people from buying houses?

Although mortgages have become cheaper, houses haven't. Since 2012, home prices have increased at about three times the pace of wages per the National Association of Realtors.

Typically, when buyers remain on the sidelines, housing prices fall in response to lower demand. But that's not happening at the moment because the homes on the market are priced higher than where people are willing — or able — to buy.

It remains unclear how much the removal of the homeowner tax incentive will hurt the housing market. The 2017 Trump tax reform limited tax deductible mortgage interest to loans of $750,000, and state and local tax deductions are capped at $10,000. 

In the week ending August 2, mortgage applications were up 5.3% from the week prior according to the Mortgage Bankers Association, but refinancings were up 116% from the same time a year ago. New rates are not unnoticed, but this also suggests that people are staying in their homes rather than selling them to buy new ones.

The Mortgage Bankers Association expects more refinancings to come out of the woodwork in coming weeks in light of the Fed rate cut and turmoil in financial markets.

If you look at St. Simons and Sea Island, Georgia, 78 more properties sold between January 1, 2018, and August 11, 2018, than between the same time period this year (January 1, 2019 and August 11, 2019). Compared to 103 more properties that sold between January 1, 2017, and August 11, 2017 compared to the same time period in 2019. The average price sold has dropped from $567,539 in 2017 to $557,510 in 2019. 

Most Americans are concerned that the real estate market is going to crash. A recent survey found that 58% agreed that there would be a "housing bubble and price correction" by 2020. As a result, 83% of them believe it's a good time to sell. To the contrary, many buyers are holding off because they are concerned that the bubble will burst.

People who were caught in the 2008 crash are spooked that a 2019/2020 bubble will lead to another crash. But the 2008 crash was caused by forces that are no longer present. Credit default swaps insured derivatives such as mortgage-backed securities. Hedge fund managers created a huge demand for these supposedly risk-free securities. That created demand for the mortgages that backed them.

While we don't have a crystal ball with respect to what's going to happen, according to Harvard Extension School professor Teo Nicholas, the next market crash will occur in 2026. He bases that on a study by economist Homer Hoyt. He says real estate booms-and-busts have followed an 18-year cycle since 1800. The only exceptions were World War II and stagflation. 

 

In 2017, Nicholas said the real estate market was still in the expansion phase. The next phase, hypersupply, wouldn't occur unless rental vacancy rates begin to increase. If that occurred while the Fed raises interest rates, it could cause a crash. 

At the end of the day, we don't know when another crash is coming but as we said above, we are seeing volatility in the home buyer market. 
 

Local Events
 

TOPGOLF SUITE

The Inn At Sea Island

July 5, 2019 - October 31, 2019

 

The Inn At Sea Island, 5-10 pm

 

912-638-5856

$75/Hour For Up To 8 Players Per Bay

 

ABBAMANIA CONCERT

Friday, September 6

Rainbow Island / Sea Island, Georgia

Open to the Public

8 p.m., doors open at 7 p.m.

Food vendor to be announced soon!

 

Tickets: $45/person

 

For more local events, check here
 

Make Your Offer Count!

As a buyer's agent, I negotiate and fight to get the lowest price and best deal for my buyer. Listing agents go to battle for one side -- the Seller. 

 

We enjoy the search and negotiations. It fires us up and often saves the buyer a lot of money.

 

Why not give us a try?

Mike

 
 

You make your money when you buy. 

If you don’t buy right, you can’t sell for a profit.

Mike’s focus is on locating and negotiating deals on Saint Simons and Sea Island, Georgia. Mike does not require an exclusive buyers agent contract. His goal is to help you buy right. 

 
 

The information contained in this Newsletter, though secured from sources believed to be reliable, cannot be guaranteed. The buyer should independently verify this information to his/her satisfaction. 

 

Many listings are provided to us by The Golden Isles Association of Realtors Multiple Listing Service, Inc. and the Brunswick News. 

 

Call if I can be of assistance, I'm good at negotiating lower prices for my clients.

 
 

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