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Three years changed real estate market

HOUSING MARKET – These professionals know the real estate market in Humboldt. Coldwell Banker Creswell Realty’s Mason Warrington, Joan Smith, Danny Smith and Shane Lynch (upper photo) have their fingers on the pulse of the market. Hickman Realty Group’s Winfred Allen (lower left) knows the farmland market and is outstanding in his field. Pritchard Realty’s Jessica Alsobrook, Ray Fonville, John Alsobrook and Bill DeLoach (lower right) are ready to assist buyers and sellers.

 

by DANNY WADE | Senior Editor

dwade@hchronicle.net

To say the housing market has been a rollercoaster ride for the past few years might be an understatement. There have been ups and downs, loopty-loops, dips and curves, and maybe even a derailment.

Local realtors chimed in on the drastic changes in the real estate market over the past few years. Coldwell Banker Creswell Realty’s Joan Smith, Danny Smith, Mason Warrington and Shane Lynch; Hickman Realty Group’s Brad Lindsey and Winfred Allen; and Pritchard Realty’s John Alsobrook offered their take on the residential, commercial and farm real estate market.

“Prices skyrocketed in 2021 after covid hit,” Joan Smith said of single-family homes. “Interest rates were in the low to mid 2s-(percent), and began to increase and consistently kept rising.”

Smith said the interest rates are now in the 7-percent range. What that means is, buyers no longer qualify for the same loan amount as they did when rates were 2-percent or 3-percent.

Over the past few years, Humboldt, Gibson County and the state of Tennessee have experienced an influx of out of state buyer.

“A lot of people around here might think a property is over priced, but it’s not,” said Mason Warrington, realtor with Coldwell/Creswell. “They look at values before covid. But people from out of state are buying property and thinking they are getting a bargain (compared to prices in their state).”

Hickman’s Allen, who often works with farmland, said the price of good farmland probably double in value since 2021.

“In 2020, good farmland sold around $4,000 an acre,” Allen said. “Now, it’s going for $8,000. Some of that is due to inflation.”

Another factor that may have helped spur the increase in value was the past two years were very good for row crops such as wheat, corn, cotton and soybeans. The weather was good for crops, which in turn meant higher yields. Market prices were higher than normal.

Allen alluded to higher cost to grow crops added to inflation, on top of the tremendous increase in machinery prices to plant, maintain and harvest their crops.

Farmland inventory is tighter than it’s been in years, according to Allen. One factor Allen thinks hurt the amount of farmland on the market was due to low CD and savings bank rates five years ago. Instead of investing in CDs, people were buying land. Another reason for the low inventory is that farmers tend to hang on to their land. Allen says they do not sell—they buy.

Allen and Lindsey say the commercial real estate sector was hit the hardest by covid and the after effects. Currently, commercial interest rate average around 2-percent higher than home mortgage rates. Lindsey says bank rates are higher due to the larger risk involved.

“Commercial (real estate) is a different animal,” stated Lindsey. “More people are working from home. Businesses are making cuts. The upside is the growth in population in the area. In the long term, it will be good but in the short term, not as good.”

As for housing costs, Lindsey said the prices have been holding since the major spike over the past two years. Some may have dropped slightly, maybe 5-percent, but most house values increased between 25 to 50-percent during that span.

“What Humboldt needs is affordable new construction,” Lindsey added. “It’s the best value for the community and what everybody wants. It would sell.”

The folks at Pritchard Realty had similar experiences as Hickman Realty and Coldwell/Creswell.

“When covid shut everything down in March 2020, I didn’t get a listing for four or five months,” said Pritchard’s Bill DeLoach. “Once things settle down, it (market) came back stronger than ever.”

“In my 45 years (in real estate), I’ve never seen anything like this,” Ray Fonville added. “It has slowed some but it (market) is still strong.”

Pritchard Realty owner/broker Jessica Alsobrook, says today’s buyers are doing their homework and searching properties online. Over the past few months, they have had buyers from out of state purchasing properties in Humboldt and surrounding area. She has had potential buyers contact her with a list of properties they want to see.

Alsobrook said the online sites are both good and bad. The good thing is, people can view properties and gather information for properties that fit their wants and needs. The bad thing is, sometimes that information is outdated and/or incorrect.

Alsobrook’s husband, Bob, who also works at Pritchard Realty, agrees. He said today’s buyers are much more prepared. Bob said rising interest rates have slowed the market down some but it is still strong.

“The market now with the higher interest rates is shutting down a lot of first-time buyers,” Pritchard’s Ray Fonville added.

One thing all three Humboldt agencies agree on is the importance of using a realtor.

“We are not only selling houses, we counsel them on what they qualify for, the market, availability,” said Smith. “There’s so much more than people know. Realtors go above and beyond.”

“We’re here to protect the buyers and sellers,” Lindsey stated. “For sale by owner properties don’t have that. There are a lot of things that can go wrong during the process that someone selling their house themselves might not know.”

“Statistics show that people that use a realtor versus selling on their own, get an average of 20-percent more when they sell,” said DeLoach. “That more than makes up for the realtor fees.”

Humboldt is fortunate to have three top-notch real estate firms looking out for those wanting to buy or sell their property. Perhaps one of the best things is all three work well together for the betterment of Humboldt and the surrounding community.

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