Buying a house in Calhoun County is more expensive than ever — despite the economic slump brought on by the pandemic, experts say.
The average sales price for a house in the county in September was $188,000, more than $30,000 higher than last year’s average and the highest average on record in the county, according to numbers collected by the Alabama Center for Real Estate at the University of Alabama.
The local rise in housing costs is part of a broader rise that is driving up home prices across the state.
“Prices continue to rise because listings are having a hard time keeping pace with sales activity,” said Stuart Norton, a researcher at ACRE.
As COVID-19 hit the state, tens of thousands lost their jobs and many have yet to find new employment. But home values remained stable in the early months of the pandemic, and now they’re starting to rise.
Economists see a number of factors behind the housing surge. Interest rates are low, as the Federal Reserve waits for the economy to pick up speed. State restrictions designed to keep the temporarily jobless in their homes have drastically reduced the number of foreclosures. Coronavirus may have slowed down construction for a while, and people who own a house aren’t eager to sell.
“People don’t know what to do,” said Anna King, a co-owner of ERA King Real Estate who sells houses primarily in Calhoun County. “They’d rather wait and see what’s going to happen with the economy before they make a big decision.”
Norton, the ACRE analyst, said that people may even be reluctant to open their houses to tours by prospective buyers while the pandemic is ongoing.
ACRE’s figures show 1,553 home sales in the county this year so far, compared to 1,174 in the first nine months of 2019 — when the economy was, by most accounts, in better shape than it is now.
The average sale price of a house rose from $147,000 in March, when the pandemic began, to $188,000 in September. The median price — less affected by expensive or low-cost outliers — rose sharply as well, from just under $130,000 to more than $150,000.
Yet according to numbers from the Calhoun County Probate Office, the number of mortgages in the county is down, a sign that people aren’t drawing on their home equity the way they did in the pre-2008 housing boom. There have been only 27 foreclosures in the county since the pandemic began, those numbers show, a number that wasn’t unusual in a typical month before the pandemic.
State-level public health orders put a halt to most foreclosures in the first months of the pandemic. Local bankers, citing the problems they had maintaining foreclosed houses after the last recession, have been less than eager to take over homes of people left jobless by the pandemic.
Atlanta-based real estate analyst K.C. Conway said home prices are rising across Alabama largely because the state was less economically affected by the pandemic than the worst-hit states.
“We shut down our auto industry in April,” Conway said. “But we’ve reopened all of that.”
Two Calhoun County auto suppliers — Bridgewater Interiors in Oxford and IAC in Anniston — announced expansions this month.
Conway said the supply of available houses was tight even before the pandemic. That’s because big construction companies tend to operate in major housing markets, he said, while Alabama is full of smaller construction outfits that haven’t been as easily able to step up production.
Low interest rates in 2020 have only added to that demand.
“They’re getting deposits and contracts for stuff that can’t even be sold for six months in Alabama,” Conway said.
That’s more or less the story now unfolding at Village at the Springs, a 130-house development planned for the Golden Springs area of Anniston. Announced last year, the development would be the first large housing development in Anniston in decades, although pandemic-related supply problems and wet weather have slowed construction.
Contractor Don James told The Star earlier this month that he already has people waiting to buy those houses, even though the first house at Village at the Springs has yet to go up.
Change may come soon. While the pandemic shows no sign of slowing, realtor King said she believes homeowners could be ready to sell after the Nov. 3 election.
Uncertainty about the outcome, she said, has people waiting before they make big financial decisions.