Athens, Georgia: Home Loan Demand, Real Estate Prices, Sales Figures Fall Slightly

Housing sales are down and construction of new houses has dipped sharply as the Athens, Ga., area shares in a nationwide housing market slump.

According to the Athens Banner-Herald, the Athens-Clarke County Building Inspection and Permits Department had issued just 433 building permits for new single-family homes through October 31, down from 750 in 2005.

Across the U.S., new home construction has declined for six straight months. The number of building permits issued in September was down 27 percent from a year earlier, according to the Commerce Department.

In Georgia, the Atlanta housing market has certainly reflected this trend, with many of the smaller cities following suit. The decline is being felt even by some of Athens’ fast-growing neighbors.

• Barrow County issued 1,093 single-family house building permits last year after peaking at 1,139 in 2004. This year, the county had issued just 766 through October.
• Oglethorpe County issued 136 single-family permits as of November 1, when 281 were issued throughout all of 2005. Real estate developers haven’t even sent in any subdivision plans to the planning and zoning commission lately.

“We haven’t had any new subdivisions (applications) now for several months. I think it’s really slowed down,” said planning commission Chairman Russell Yeany.

One area county has resisted the slump so far. Oconee County has seen 389 permits - required before home construction can start - approved through Wednesday. That’s close to the total for all of 2005, which had 402.

“I think there is a little slowdown, but I still see new housing going up. It’s a little slow, but it’s not depressed yet,” said Charles Grimes, president of the Oconee County Chamber of Commerce.

The slowdown has spread to overall sales, not just new home construction. In September and October, home builders say just 241 new or existing homes were sold in Clarke and Oconee counties, down from a total of 282 the same two months last year.

That means the investment value of homes is not rising as quickly as it did a couple of years ago, and that it’s taking longer for homeowners to find buyers when they want to sell, said Sean Hogan, president of the Athens Area Home Builders Association.

The book could get thicker, predicted Jeff Humphreys, director of the University of Georgia’s Selig Center for Economic Growth.

“I think confidence is going to get worse before it gets better, even in Georgia. It’s just a question of how bad it’s going to get,” he said.

Nationally, home prices could drop as much as 4 percent in 2007, which will be the first time since the Great Depression that house prices dropped. But the housing recession won’t be as bad or last as long in Athens and Georgia as it will in the rest of the nation.

Nationally, the average price of a house has gone up about 56 percent in the past five years, while household income has grown only by about 25 percent, meaning affordable housing is becoming extremely scarce.

But in Georgia and the Athens area, house prices have grown at about the same rate as income. Here, home prices are more likely to be flat than to actually decline. That said, with house prices stalled, it’s actually a good time to apply for Georgia home loans, experts say.