Getting it sold: Low interest rates continue to drive real estate boom
It has never been quicker or more lucrative than it is right now to sell a home in the Ardmore area. And while this may sound like the situation is more beneficial to sellers than buyers, low interest rates have made the cost of financing a home much less expensive than it has been in years past. So a slightly higher up-front cost can be balanced out by the savings generated over the life of a loan.
Marcus Cunningham, managing broker at United Country Southern Oklahoma Realty said over the last 90 days the average price of a home in the Ardmore area has been around $171,400. On average these homes are selling in 27 days at 98.4% of their list price.
Cunningham said 45 homes were sold in the $100,000 to $200,000 price range in the last 60 days, which is up from the 25 homes sold in the same price range during the 60-day span before that.
“Right now the demand is extraordinary, and the supply — though it’s actually pretty good — just can’t keep up with all of the demand,” Cunningham said. “For the first time since I’ve been selling real estate, homes are selling for at or above list price more often than they are selling for less. People are having to pay over list price to even be competitive on some properties, especially if it’s priced in the ballpark of what market value was even six months ago
He noted this increase in sale prices has created some difficulty for realtors and appraisers as homes are sometimes appreciating in value more quickly in a quarter than they used to appreciate in an entire year.
“I would say an affordable home for this area right now would cost somewhere around $150,000,” he said. “Normal appreciation is typically around 2.9% per year, but If there is a house that’s move-in ready in that affordable price range, it’s going up by 6% or 7%.”
In addition to the higher prices, homes are also selling much more quickly than in years past. The current average of 27 days on the market about one fifth the length of the average days on the market seen in the final quarter of 2019. During the last 90 days of 2019, the average time on the market was 118 days, and this number grew to 145 days during the early days of the pandemic. By midsummer 2020, this number had turned around and it currently shows no signs of slowing down.
Cunningham said the current average of 27 days may even be somewhat artificially high because of homes that are priced too high, with homes that are priced correctly often selling in less than a week.
“The most important thing to realize if you’re a buyer right now is how fast the market is moving,” Cunningham said. “We’ve had some buyers miss out on a property because they didn’t make an offer the day it was listed. Before we were fighting for one offer per listing, but now if it’s a good property, we’re looking at multiple offers on the same place. I’ve had properties with seven to 10 listings in a matter of three days, and several of those offers were at above list pricing.”
It is not only homes that are seeing such a rapid increase in value. Land is also becoming a more valuable commodity as investors are looking for property to grow and process marijuana.
“If a property is located outside the city limits and has some land and a few outbuildings, we’re seeing a lot of investment from buyers wanting to get involved in marijuana distribution,” Cunningham said. “A couple of years ago those properties were bought by people wanting to live in them, but now those people can’t compete with the marijuana growers because they are coming in with bigger offers and are paying in cash.”
With the exception of those looking to start a rural life and being outspent by marijuana growers, Cunningham said the current market is actually good for everyone involved.
“Having such a strong sellers market might seem bad for buyers, but with interest rates so low there are only winners in this situation,” Cunningham said. “People are able to get so much more house than they could have just one year ago. So it’s okay to pay a little more for a house because you’re getting a much better interest rates, and if you’re paying out a mortgage over 30 years, $4,000 more for a house is a pretty small price to pay for $45,000 worth of interest savings.”