If Captain Obvious, the quirky character from the humorous TV commercials for hotels.com, were to visit Gainesville-Hall County today, he surely would point out something that hardly anyone living here could plausibly deny.
Plain and simple, we are in a real estate boom.
The next obvious conclusion might be that what goes up must come down. Therefore, the boom will bust, just like it did in the 2007-08 housing crisis leading to the Great Recession. Right?
Well, that’s not so obvious. But before we jump to any more conclusions, let’s look at the facts and trends behind this surging market that Peach State’s mortgage office and other area banks have been witnessing firsthand.
There is less than a two-month supply of new and existing homes for sale in Hall County. A robust housing market normally would be represented by a nine to 10-month supply.
Following the principle of supply and demand, our shortage of homes — as well as building materials like wood — has driven up real estate prices.
Nationally, the median sale price of an existing home this past spring was $341,600 — and we’re in about the same neighborhood here in our community. That’s nearly a 20% increase over last year.
The expansion of locally based industries like Kubota as well as newcomers like SK Battery in Jackson County is attracting more workers looking for places to live here.
Likewise, our growing hospital and physician practices are recruiting young medical residents, doctors and nurses who are renting and buying new homes.
Many homes here are being sold well above their asking prices with buyers lining up like bidders at an auction.
Several home buyers, particularly those moving here from areas with much higher costs of living, are paying all cash — simply rolling over the equity from their former homes.
The shortage of housing is pushing up rental rates here as well. Monthly lease rates for some apartments are nearly double what they were before the pandemic.
The rising rental market is leading to construction of new apartments and condos — from the innovative Treesort community on our north end to The Crest at Flowery Branch to our south. In between is a diverse range of rental options coming up from the ground in downtown and midtown Gainesville at The National, the Renaissance and the Terwilliger Pappas multi-use project on the other side of the downtown pedestrian bridge.
In Braselton, where our new bank branch has opened, the trend continues for retirees and age-restricted communities drawn to the town’s top-notch hospital, restaurants and uniquely centralized array of community services.
All this activity is enough to make your head spin — and many have wondered whether our market can support it.
While we may eventually experience an economic slowdown, I don’t see it happening any time soon. And I certainly don’t envision a collapse anywhere on the scale of the Great Recession.
We’ve learned a lot from our lessons of 2007, when mortgage rules were much looser and far less regulated. The days of shady pop-up mortgage firms offering 110% financing with little to no underwriting appear to be long gone.
Back then, we also had a huge oversupply of lots and homes for sale — unlike today. When the market started slowing, there was a five-year glut of homes on the market with no buyers, a perfect recipe for the disaster that unfolded.
My primary concern right now is the hint of inflation, which could lead to higher interest rates that tap the brakes on the business world and housing markets across the United States.
Still, a total economic fallout is highly unlikely, especially in Hall County (and the rest of Georgia), due to our region’s strong, diverse and expanding manufacturing base as well as the inland port coming soon to our Ga. Highway 365 corridor. Consumer optimism in the wake of the dwindling pandemic further underpins our growth potential.
To state the obvious one more time, our boom is here and it’s very loud. So loud that its sound should carry far and wide for quite some time to come.
Ron Quinn is former chairman of the Georgia Community Bankers Association and the president and CEO of locally owned Peach State Bank & Trust.