A basic economic principle applies to Hall County’s housing market: Too much demand and not enough supply — bad news for buyers, good news for sellers.
That was the theme of a Greater Hall Chamber of Commerce virtual discussion of the topic Wednesday, May 19. Tommy Howard, president of brokerage services for Gainesville-based The Norton Agency, gave a presentation filled with numbers and examples of Hall’s home buying rush.
“It’s a desperate situation for buyers,” Howard said. “They’re doing anything they can to buy a house.”
Here are five takeaways from the session:
Cash is king
People want to finance mortgages, but loans don’t have the leverage of cold, hard cash.
“We are seeing probably about 40% of our sales are going to all-cash offers,” Howard said. “And in another 30%, we’re seeing substantial down payments, as much as 50% to loan value.”
People will build extra cash into their offers as well.
“They will say ‘I’ll pay $1,000 or $5,000 above the highest offer,’” Howard said. “They don’t care what (the offer) is. They’ll pay the difference.”
He added: “We’re also seeing substantial earnest money. The rule of thumb used to be 1% of purchase price. We’re seeing that increase to 2%.”
Or even higher than 2%, with people plunking down as much as $20,000 to placehold a $500,000 house, Howard said.
Be very prepared
If you’re seriously considering buying a home, forget casual browsing.
“Don’t walk into a house unless you are ready to purchase and you’re pre-approved with your mortgage company,” Howard said. “I’d even take it a step further and have everything lined up (for a potential buy). If you walk into a house today and you can’t make a decision, truly it will be gone tomorrow or even the next few hours.”
Competition for homes is extreme, with Howard noting that his agency was one of 38 offers on a $285,000 house. “Half of them were above the asking price,” he added.
The market now
As of Tuesday, May 18, Hall County had 221 single-family listings across all price ranges, Howard said.
“We have 12 houses under $200,000. One of those is actually a lot and five of those are trailers. And the rest are houses in desperate need of repair and well overpriced of what they should be valued at.”
About 50 houses are priced at under $300,000, and Hall’s average sales price is $392,000.
Also, Howard said, some 1,600 agents sold homes in Hall County in 2020.
“Think about that: 1,600 agents competing for 221 listings. It’s just phenomenal,” he said.
Millennials are the big buyers
Today’s top customer is millennials, but they’re not buying homes until their late 30s, Howard said.
“A lot are first-time home buyers,” he said. “They never planted roots anywhere. They got married later and had kids later, and they’re buying homes later.”
With earlier generations, “it used to be, at the age of mid-30s or 40, you might be on your second or third house,” Howard said.
No end in sight
At least for now, the hot housing market will continue.
Worries about a housing bust stems from the 2007-09 Great Recession, when values tanked.
The housing picture today is much different, Howard said.
In 2007-08, the number of houses outpaced demand and “lenders were giving loans to people who couldn’t afford the house,” he said.
“What we have today is completely the opposite. We have very low inventory with a huge demand and a much more stable banking system,” Howard said.