Buying your first home should be an exciting time as you make a major investment in a place to call home.
However, buying a starter home in Athens may be more of a challenge than a thrill for many. The few houses for sale that cost less than $300,000 often require renovation or sacrifices on size or location.
Housing prices in Athens are up 8% since year-over-year, which comes after two years of 20% hikes in price, according to RocketHomes.com.
As of Sept. 13, almost 40 properties were on the market for $300,000 or less, according to real estate agent Jennifer Varnadoe. The inventory is “creeping up,” she said, with the amount almost doubling since early August.
“This business changes constantly; so many factors come into play like seasons, politics, rates (of course), or local government ordinances. “Homebuyers just have to get themselves ready so when the conditions are favorable, they can act.”
As inventory fluctuates, some buyers looking during a dip may find house hunting difficult and stressful.
That was the case for Leslie Lamb, who wanted to find a place outside of the student hub of Athens but close enough to her workplace’s office off of Tallassee Road in Athens.
“I finally decided that I want 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 good sweet spot on the outside of town but close enough to everywhere in Athens.”
At the height of the hot housing market in 2021, she competed with 15 other home buyers within six hours at one open house. That house sold for over the asking price, Lamb said.
She knew she wanted to live on the eastside of Athens or in Madison or Oglethorpe counties because of the residential feel of those areas, but everything was “going, going and going” so it was difficult to find the right home in the beginning.
After seven showings she found her current home in the Post Oak neighborhood for $245,000, although she was second in line as the original couple whose offer was first accepted backed out two days later.
“This was the most emotional 60 days of my life,” Lamb said. “I felt so happy, so nervous, so many feelings all at one time.”
Kellye Morgan and her husband met as students at UGA and married in Athens. While they had a positive experience as renters in Athens, during the pandemic they finally decided to “dip their toes” in the housing market.
“It’s a crazy market because people would put in cash offers or waived appraisals or inspections,” Morgan said. “We would see the same people at the same showings so we knew we were bidding against families and investors.”
The Morgans put in six bids – at least $15,000 over asking price – and “lucked out” with closing on their sixth offer in mid-June, after spending about three months searching for their first home.
She said many of the houses in her original budget of about $315,000 either needed major repairs or were small. So instead of settling for what the market offered, she upped 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 just couldn’t manage to win one,” Morgan said.
They wanted a home in Athens with an attached garage and plenty of room for their two dogs. And while they aren’t planning on having kids in the near future, having enough space to grow into their home did calculate into their decision making process.
“We love Athens; we’ve always wanted a home here,” Morgan said. “But I went through a breakdown looking for a house. I don’t ever want to do this again.”
Haley Miklosi, who works full time at Janssen Pharmaceutical in Athens, knew she was taking a leap of faith when she set out to look for her dream home with her husband Mitchell.
After renting a home for over a year, the Miklosis started driving around in May, looking at areas where they wanted to live: Winder, Jefferson and Athens.
She and Mitchell were disappointed with what Athens had to offer, at high prices even with amenity sacrifices.
“If you’re going to pay a lot of money, you want more than what you’re seeing,” Haley Miklosi said.
The Miklosis ended up purchasing their first home in July in Jefferson.
Buying in nearby communities
Five years ago, a buyer could find a starter home in Athens at the $150,000 price point, but the real estate market has transformed Athens into a commuter town said real estate agents Charlie Upchurch and Jennifer Varnadoe.
“With so much population growth in Athens, potential homeowners now look to outside small communities with ‘affordable-ish’ housing that is at least under the average home price in Georgia,” Varnadoe said. The definition of affordability is technically a mortgage payment that is 30%-35% of a household income, she said.
The median household income in Athens is $50,447, which means that a house in the range of $215,000 to $245,000 is the approximate affordability range.
The median sales prices for homes in Clarke County was $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 commute to Athens. Elberton is also a strong option for affordability.
The 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 the homes are sold at high prices and are not on the market for very long.
“Madison is a diamond in a rough,” Upchurch said. “They have good school districts and is close enough for the University of Georgia employees to commute into Athens.”
Madison County, which includes cities Hull, Comer, Colbert and Danielsville, is to the northeast of Clarke County. Its schools are ranked No. 13 in Georgia, according to Niche; while nearby Oconee County is ranked No. 2 and Jefferson City schools are ranked No. 7.
What is causing the low inventory of starter homes in Athens?
Clarke County is a hotbed for investment opportunities.
Roughly 64% of the single-family homes in Athens are rental homes or at least not owner-occupied, according to Kirk Dunagan, chief appraiser at Athens-Clarke County’s Tax Assessor’s department. Rentals targeted 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 isn’t the only issue prohibiting starter home availability.
Varnadoe underscored that supply chain issues and rising costs of materials during the pandemic greatly impacted the local builders in Athens. However, since Georgia considered real estate as essential goods and services, houses still sold during the pandemic, Upchurch said.
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Other real estate agents echoed these sentiments and included other contributing factors that discourage homeownership for potential first-time buyers in Athens.
For one, record-high interest rates for a mortgage loans.
“The Federal Reserve tried to lower inflation by aggressively increasing rates, and this, unfortunately, made the cost of borrowing more expensive,” said real estate agent Danielle Grier.
Interest rates dissuade buyers or force lower budget, but the rates also discourage sellers, Grier said. A homeowner with a lower interest rate, like those offered in recent years, won’t want to assume a new mortgage loan with a higher rate unless it’s necessary.
“Trends are showing us now to expect these rates through the end of this year, and possibly they will start to go down next year,” Grier said. “However, we will probably not ever see rates in the 2% and 3% range again.”
The low inventory in Athens is evidenced by the low absorption rate of 2.5 months, Upchurch said. The absorption rate is the timeframe of having available houses for sale. A healthy absorption rate is having six months of housing inventory on hand to sell.
He also said that having a low absorption rate does not meet the demand of the buyers, so the house prices have significantly jumped over the past five years.
There is quite a bit of development in Athens, with currently 57 new construction homes currently on the market in Athens-Clarke County as of Aug. 28, Grier said. Of these 57, less than half are listed for sale under $500,000.
“The listing inventory remains tight and many buyers find today’s lending requirements restrictive at first glance,” Varnadoe said. “Plus, inflation affects 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. And, Athens and it’s surrounding communities do have opportunities for new home builds, neighborhoods, and financial options that can work for most any buyer with the right guidance, tools and motivation.”