Our company typically chooses to spotlight another local business, but this month, the business we had lined up for July had to reschedule the article. This gave us an opportunity to provide an update on two real estate topics. First, to explain the trends we are seeing in our local market this year and second, to provide some explanations about the settlement of the NAR lawsuit which has been in the news recently.
The Athens, GA Real Estate Market
Depending on who you speak with, you might hear very different views on the real estate market. To this point, 2024 has been a better year in many ways than 2023, but it hasn’t been great. We all know the sharp increase in mortgage rates slowed down the real estate frenzy of earlier years, but higher rates have not caused values to drop in our area. At the end of May, there were only fifty more new listings for sale in Athens-Clarke County than the same time frame in 2023. The same is true for the number of homes sold which is slightly up from last year by about seventy-five properties. This represents an improvement, but we are still in a very low transaction market.
We cannot predict the future, but it seems the amount of inventory is improving in 2024. At the end of May, there were over three hundred homes on the market in Clarke and Oconee County which is the highest number we have seen in a few years. We haven’t seen the supply of homes increase enough to shift the market, but we have seen a slight decrease in buyer demand. For example, the average days on market for a home in 5 Points was nineteen days in March of 2021 and it was thirty-five days this past March. It should be noted that the 5 Points area has one of the lowest days on market when compared to other neighborhoods and neighboring counties.
The elephant in the room is the price of homes in our area which has skyrocketed. Over the past few years, you have likely noticed the increased values of homes selling on your street. The average home sale price in 5 Points was $548,000 in January of 2021, $680,000 in January of 2022, $783,000 in January of 2023, and $907,000 this past January. We all understand there have been numerous and historic economic factors causing the quick rise in property value, but despite the higher prices, it appears buyer demand in five points is not slowing as much as other areas.
What You Need to Know about the NAR Lawsuit
There has been a lot of discussion in the news lately about the settlement of a lawsuit with the National Association of Realtors. Unfortunately, there has been a lot of confusing information and misleading headlines around the facts of the lawsuit. We want to take the opportunity to clearly identify some of the changes that are coming and how they will impact buyers and sellers in real estate.
First, please understand there has been no change to commission fees or structures. Commissions have always been negotiable. There are no laws in place that require anyone to pay a set commission rate in a real estate transaction. The commission is discussed and agreed upon between the client and their real estate agent or broker typically in a listing agreement or a buyer brokerage agreement. Where there are changes coming for the consumer is with buyer agreements. Previously, real estate companies were not required to have a written agreements with buyers. Written agreements were encouraged but there was not a legal requirement in our state. In many cases, buyers would not sign a written agreement with their agent until it was time to write an offer, and sometimes there was no formal written agreement at all. This will be changing soon, and real estate agents will be required to have a written agreement with all buyers. If you choose to work with an agent when buying a property, you should be aware of this and be sure to understand the agreement you have with your real estate agent.
The other change coming from the settlement is likely where the confusion was created. Real estate companies will no longer be able to advertise commission fees in their local multiple listing service (MLS). You may be unaware, but when a house was listed in the multiple listing service, the commission offered to a buyer agent was previously visible to all members of the MLS. Commission fees or structures for individual listings will no longer be posted in the MLS for other realtors to see. This new rule is going to impact the way real estate companies and agents communicate about the offer of compensation on properties that are listed for sale. In the future, we will probably see commission structures displayed in different places like on a company’s website or possibly as additional information on yard signs. If you have more questions about the upcoming changes, feel free to reach out to us at 5Market Realty or contact your real estate agent.
Please note that the numbers and figures discussed in this article are calculated specifically for Clarke or Oconee County from the Athens Area Association of Realtors’ Multiple Listing Service (Classic MLS). They do not include properties listed For Sale by Owner or in another Multiple Listing Service.