Talk of the Town - June 2022
- by Lisa Monti
How hot is the local real estate market? So hot that some buyers are paying almost $500 per square foot for a place in Bay St. Louis.
“It’s crazy,” said Jon Ritten, broker/owner of RE/MAX Coast Delta Realty in Diamondhead. “We’ve seen a good market before, but never anything quite like this.”
Stories circulating about real estate prices, especially in the Old Town section of Bay St. Louis, have taken on eye-popping proportions.
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Residents keeping an eye on neighborhoods share tales of houses selling within hours of hitting the market, snapped up for six or seven figures to out-of-town buyers. Sale prices topping $1 million aren’t uncommon.
Ritten, who is president-elect of the Mississippi Association of Realtors, the state trade association, said at a recent party he heard a story about a homeowner getting an unsolicited offer to buy his house.
“Someone knocked on the door, and they were willing to pay an amazing price for it,” he said.
Ritten said closing prices in Old Town for the past six months have ranged from a low of $157,600 for an 871-square-foot, one-bedroom house on State Street to a high of $935,000 for a 1,930 square-foot house in the first block of Carroll Avenue with four bedrooms and three baths.
A house in the third block of Main closed at $745,000, and another in Chapel Hill for $510,000.
“Some homes in Old Town are selling just under $500 a square foot,” Ritten said.
The average sales price of condos on Dunbar Avenue went from $125 per square foot in 2020 to around $225 per square foot in 2021, he said.
So what’s driving these white-hot prices? A lot of factors come into play, including the twin calamities of Covid and Katrina.
Bay St. Louis came back from the 2005 hurricane sporting some valuable new assets, most notably its picturesque harbor in the middle of Old Town, with its multi-level beachfront bars, seafood restaurants and parking lots packed with golf carts.
The Pearl, a new boutique hotel with its own row of restaurants at the corner of Main Street and Beach Boulevard, has taken local hospitality options to a new level. And the city’s reputation as an art-filled, welcoming destination has landed it onto rankings as the coolest town and among the best beach places in the country.
Danny Lee, who became CEO of the Gulf Coast Association of Realtors in April after working for 15 years as a Realtor with Ashman-Mollere Realty in Waveland, said Old Town Bay St. Louis has been one of the hottest real estate markets on the coast post-Katrina.
“Its unique charm, character and eclectic mix of shops, restaurants, and bars has been a big draw for tourists and locals alike,” he said. “Its unique proximity to the water combined with its high elevation have made it a hot-spot for second-home buyers and retirees.
“Both of these types of buyers tend to have larger budgets, and when you mix higher budgets with more popularity, prices tend to increase... and we’ve definitely seen the prices in Bay St. Louis increase at a rapid rate.”
According to GCAR, the average sale price of a house in Bay St. Louis was $196,808 in 2018-2019. The price jumped to $378,347 in April of this year.
Ritten said the pandemic and the shift to working remotely are big factors in attracting people to move here, especially from major metropolitan areas.
“This is a great place to live with amenities like the weather, the beach and the laid-back lifestyle. They like the casual, artsy vibe. And it’s close enough to big cities that offer things like pro sports and the arts,” he said.
And home prices are affordable, compared to metro markets that people are leaving behind. Ritten said he’s seeing a lot of cash sales.
“It’s a tight market, and cash is king. They don’t want to lose out. And they’re getting a lot more home for the money.” he said.
With such a robust real estate market there’s also talk of the bubble bursting, but Ritten said he isn’t worried. He recently attended a National Association of Realtors session presented by the industry’s chief economist, who said “he doesn’t predict the bubble to burst, but there may be a cool down.”
That’s because there’s a lack of available housing inventory since the construction slowdown that took place during the recession. “Builders stopped building, and they never really caught up,” Ritten said.
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