COVINGTON, Ga. — The Federal Reserve's increase in interest rates in recent months to curb inflation apparently has created a “reset” in the hot Newton County real estate market.
Home sales slowed and their average sales price took a tumble inside Newton County in September, according to statistics from the Georgia Multiple Listing Service (MLS).
Fewer homes were put on the market and the number of homes up for sale increased in September, according to the Georgia MLS.
John Ryan, chief marketing officer for Georgia MLS, said after two years of record housing sales and all-time high housing prices the market is "resetting" both locally and nationally.
"Sales have slowed and median home prices are starting to decline as seen in Newton County and the Atlanta market," Ryan said.
"Inflationary pressures causing higher mortgage interest rates, resulting in the reduction of buying power for those looking to purchase a home, have now exacerbated this reset," Ryan said.
Scott Alexander, who is broker/owner of Re/Max Agents Realty in Covington, said he has begun to see some sales transactions in which the seller has offered incentives to sellers for purchase.
That is a reversal of the post-pandemic trend of homes being in such heavy demand that they typically sell above the asking price within days of going on the market.
"We haven't had a lot of good fluidity in the market," Alexander said.
The Georgia MLS reported the number of homes sold decreased 18% — from 156 in August to 128 in September — in Newton County.
It also reported:
• Newton County's median sales price for a home dropped 2.6%, from $313,250 in August to $305,000 in September — signifying a possible decrease in demand after the average interest rate on a 30-year, fixed rate mortgage increased to an average of 7.20%.
The average rate is double the rate of October 2021 and the highest since 2001. The Federal Reserve has increased the prime rate in recent months in an effort to curb inflation.
• Sales volume dropped 22% — from $51.7 million in August to $40.2 million in September.
• Active listings of homes for sale increased almost 12% in one month, from 353 in August to 395 in September.
• The number of new listings of homes for sale dipped 3%, from 244 in August to 237 in September.
Ryan said consumers are considering the timing of buying a home during an economic time that has seen rising prices for everything from gas to groceries.
"Belts are tightening which has resulted in the slowing of home sales," Ryan said.
However, Ryan also said those looking to buy a home in Newton County have more options than in recent months.
"The rise in inventory has given consumers more options to choose from and a stronger position in negotiating the sales price," he said.
However, the September 2022 numbers show the median sales price was still 13% above $269,000 in September 2021.
However, the September 2022 numbers show the median sales price was still 13% above $269,000 in September 2021.
Alexander said Newton County's residential real estate market still is considered a seller's market — sellers having the price advantage over buyers — because of the months’ worth of inventory of homes for sale.
He said there are about 2.1 months of inventory (MOI) in Newton County — meaning it would take a little more than two months to sell all homes now on the market if no new ones were added.
The market is not considered a sellers' market until about six months of housing inventory are available, Alexander said.
Alexander said he foresees inventory continuing to increase in Covington and Newton County.
The attention the area is receiving from job creating companies in such industries as filming will prompt home builders to add more inventory because of anticipated demand, he said.
