Housing Market in Athens, Georgia: First-Time Home Buyers Share Their Experiences
Buying your first home should be an exciting time as you make a significant investment in a place to call home.
However, purchasing a new home in Athens can be more challenging than exciting for many. The few homes for sale that cost less than $300,000 often require renovation or sacrifices in size or location.
Home prices in Athens are up 8% over the past year, after two years of 20% price increases, according to RocketHomes.com.
As of Sept. 13, there were nearly 40 properties on the market for $300,000 or less, according to real estate agent Jennifer Varnado. She said inventory is “building,” with the amount nearly doubling since early August.
“This business is constantly changing; many factors come into play such as seasons, politics, prices (of course), or local government ordinances. “Homebuyers just have to prepare themselves so they can act when conditions are right.”
With inventory so volatile, some buyers searching during a decline may find the home search difficult and stressful.
This was the case for Leslie Lamb, who wanted to find a place outside of the Athens Student Center but close enough to her workplace office located off Tallassee Road in Athens.
“I finally decided I wanted to build some equity and have an investment instead of paying rent for the same amount as my mortgage,” Lamb said. “My new home is a beautiful place outside the city but close enough to everywhere in Athens.”
At the height of a hot housing market in 2021, she competed with 15 other homebuyers within six hours for a single open house. This home sold for more than the asking price, Lamb said.
She knew she wanted to live on the east side of Athens or in Madison or Oglethorpe counties because of the residential character of those areas, but everything was “going and going and going” so finding the right home was difficult at first.
After seven offers, she found her current home in the Post Oak neighborhood for $245,000, although she was second in line as the original couple whose first offer was accepted was backed out two days later.
“This has been the most emotional 60 days of my life,” Lamb said. “I felt so happy, so nervous, and so many emotions all at once.”
Kelly Morgan and her husband met as students at UGA and were married in Athens. While they had a positive experience as renters in Athens, during the pandemic they finally decided to “hit the ground running” in the housing market.
“It’s a crazy market because people are making cash offers or waiving appraisals or inspections,” Morgan said. “We were seeing the same people at the same shows, so we knew we were pitching against families and investors.”
The Morgans made six offers — at least $15,000 over the asking price — and were “lucky” to close on their sixth offer in mid-June, after spending about three months searching for their first home.
She said many of the homes in her original budget of about $315,000 either needed major repairs or were small. So, instead of accepting what the market was offering, she increased her budget by more than $60,000 to meet her and her husband’s needs.
“It was very frustrating to feel like we had the money to buy a house but couldn’t win it,” Morgan said.
They wanted a house in Athens with an attached garage and plenty of space for their two dogs. Although they don’t plan to have children in the near future, having enough room to grow in their home factored into their decision-making process.
“We love Athens; “We’ve always wanted a home here,” Morgan said. “But I had a breakdown while house hunting. I never want to do that again.”
Haley Miklosi, who works full-time at Janssen Pharmaceutical in Athens, knew she was taking a leap when she set out on the hunt for her dream home with her husband, Mitchell.
After renting a house for more than a year, the Miklosis family began driving around in May, looking for areas they wanted to live in: Winder, Jefferson, Athens.
She and Mitchell were disappointed with what Athens offered, with high prices even with sacrifices on amenities.
“If you’re going to pay a lot of money, you want more than what you see,” Hailey Miklosi said.
The Miklosis family ended up purchasing their first home in July in Jefferson.
Buy in neighboring communities
Five years ago, a buyer could find a new home in Athens for $150,000, but the real estate market has turned Athens into a commuter town, real estate agents Charlie Upchurch and Jennifer Varnado said.
“With significant population growth in Athens, potential homeowners are now looking to small, outdoor communities with affordable housing that is at least below the median home price in Georgia,” Varnado said. Technically, the definition of affordability is a mortgage payment of 30% to 35% of household income, she said.
The median household income in Athens is $50,447, meaning a home in the $215,000 to $245,000 range is the approximate affordability range.
Median home sales prices in Clark County were $395,000 in July 2023 — up from $329,000 in March.
According to Upchurch and Varnadoe, Oglethorpe, Barrow and Walton counties are popular places to buy with a reasonable trip to Athens. Elberton is also a solid choice for affordability.
Median home prices in those counties, according to RocketHomes.com, are:
RocketHomes.com noted that all of these counties are currently in a seller’s market, meaning homes are selling at high prices and not staying on the market for very long.
“Madison is a diamond in the rough,” Upchurch said. “They have good school districts and are close enough for University of Georgia employees to be able to commute to Athens.”
Madison County, which includes the cities of Hull, Cummer, Colbert, and Danielsville, is located northeast of Clark County. Its schools are ranked No. 13 in Georgia, according to Niche; Nearby Oconee County ranked second, while Jefferson City Schools ranked seventh.
What is causing the low inventory of starter homes in Athens?
Clark County is a hotbed of investment opportunities.
Nearly 64% of single-family homes in Athens are rental homes or at least not owner-occupied, according to Kirk Dunagan, chief appraiser with the Athens-Clarke County Tax Assessor’s Department. Rentals aimed at college students and short-term rentals for events such as UGA football games, graduations, weddings and other events are prevalent in the community.
But the population of rental homes is not the only issue preventing the availability of starter homes.
Varnado stressed that supply chain issues and rising material costs during the pandemic have greatly affected local construction companies in Athens. However, since Georgia considers real estate essential goods and services, homes are still selling during the pandemic, Upchurch said.
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Other real estate agents echoed these sentiments and listed other contributing factors discouraging homeownership for potential first-time buyers in Athens.
First, record high interest rates on mortgage loans.
“The Fed has tried to bring down inflation by aggressively raising interest rates, and that has unfortunately made the cost of borrowing more expensive,” real estate agent Danielle Greer said.
Interest rates discourage buyers or force them to budget less, but rates also discourage sellers, Greer said. A homeowner with a lower interest rate, such as those offered in recent years, will not want to take out a new mortgage loan with a higher interest rate unless it is necessary.
“The trends now show us that we expect these rates through the end of this year, and perhaps they will start to decline next year,” Greer said. “However, we will probably never see interest rates in the 2% and 3% range again.”
The decline in inventory in Athens is evidenced by a two-and-a-half-month low absorption rate, Upchurch said. Absorption rate is the time frame for having homes available for sale. A healthy absorption rate is having six months of housing stock for sale.
He also said that having a low absorption rate does not meet buyers’ demand, so house prices have jumped significantly over the past five years.
There is a significant amount of development in Athens, with 57 new construction homes currently on the market in Athens-Clarke County as of Aug. 28, Greer said. Of these 57 cars, less than half are for sale for less than $500,000.
“Listing inventory remains limited, and many buyers find today’s lending requirements restrictive at first glance,” Varnado said. “In addition, inflation affects the prices of everything, including housing.”
“But if a buyer is willing to work with a local lender, they can find a path to homeownership that fits their needs. Athens and the surrounding communities have opportunities for new home construction, neighborhoods and financial options that can work. For most buyers with the right guidance, tools and motivation.”