Seller’s housing market driven by pandemic

MADISON — Fewer than 100 houses are available for sale this week in the 39110  zip code and fewer than 200 in all of Madison County.

The numbers reflect the lowest housing inventory most local real estate specialists say they have seen in their careers and is indicative of a national trend brought on in part by the COVID-19 pandemic.

The Multiple Listing Service (MLS), which compiles houses on the market, showed only 93 homes available in the city of Madison, only 33 in Ridgeland for a total of 151 in all of Madison the County.

While the number of houses on the market fluctuates from hour to hour and from day to day, real estate specialists said they have never seen the inventory so consistently low in one of the state’s fastest-growing areas for the last 30 years.

The lack of available housing stems from a few factors, including the COVID-19 pandemic, low-interest rates and the desirability of the Madison location, industry watchers said.

“Inventory is extremely low right now, especially below the $250,000 price, because there are just so few homes in that price range,” said Paula Ricks of KeyTrust Properties in Madison.

Amanda Polles of Polles Properties in Madison said in her 15 years as a Realtor she has never seen so few houses available in Madison.

“It is a bad situation,” Polles said. “We have a lot of buyers and no inventory.”

The city of Madison has a population of 36,143 with 13,682 housing units with a median value of $247,400, according to statistics from unitedstateszipcodes.org.

None of the real estate specialists interviewed for this story could provide a number of houses that are typically on the market in the area over previous years, but all agreed COVID-19 is playing a factor in the current low inventory.

“COVID is probably a large driving factor, which has caused the cost of new construction to go up and in order for there to be a resell somewhere in the line, an existing home that is getting resold there has to be, a new construction home,” said Liston Sage of Hopper Realty of Madison. 

The COVID-19 pandemic that began last March has hampered shipping and trade with other parts of the world, which in turn has caused stagnation in new home construction over the past year, he said.

Also, due to the pandemic, interest rates have been extremely low, which analysts say is contributing to increased home buying.

“A lot of people have a lot of equity in their houses right now,” Polles said. “They can turn around and roll that equity into another house and for the interest rates being as low as they are for the same payment get a new house and a bigger house than they have right now. There is just a lot of factors.” 

The prime interest rate was as low as 3.25% last July and is currently still below 4%.

“Lower interest rates are definitely motivating buyers right now to hurry up and buy because there is always that mentality that they are going to go up,” Sage said. “Everything that we are seeing right now is indicating that they will go up.”

The lack of housing inventory is not unique to Madison the city or Madison the County. Available houses for sale in the 10-county region, including Hinds and Rankin counties, represented in the local MLS listings is also low and there are indications it is a nationwide issue due to the pandemic and interest rates factors.

So what is a prospective homebuyer to do?

“Get a real estate agent,” Polles said is her advice to people who are looking for a house right now. “I can’t tell you the number of houses I have sold recently by word of mouth with relationships that I have with other agents. Now is not the time to go do it on your own. You need expertise, you need experience, you need somebody that can guide you that can do contract negotiations and the best advice I can give is to get a real estate agent that knows what they are doing.”

Ricks agrees.

“It is definitely a seller's market right now because inventory is so low,” Ricks said, adding of the 93 houses on the market in Madison’s 39110 zip code Tuesday afternoon, the least expensive home was listed for $199,900. 

“Right now there are 93 houses on the market and 30 are $500,000 and above. Of the 93 active listings, 33 of them are $500,000 or more and they go up to $3,950,000.”

The Realtors all said they have had clients who offered above the asking price on houses in Madison County recently who lost out to other buyers who offered more.

“First and foremost you need to be ready to buy and if you are not a cash buyer, you need to have lending ready to go from the lender and be pre-approved, because when the one you want comes on the market there is a whole slew of other people who want it,” Sage said. 

“Have the least amount of contingencies possible. Asking for contingencies in this type of market is gone. Have your financing in order and when you do make an offer make it your highest and best offer.”