Positive signs seen in sales
Agricultural and residential sectors show improvement
by Mark Bird
DBJ Contributing Writer
With a generally improving Delta economic climate, the region’s real estate industry is also reporting some positive signs.
To be sure, some sectors are performing better than others. The record crop year, which came as a blessing to many Delta
farmers, has also brought about a stabilization of land values and a shrinking inventory of farms on the market, along with
renewed interest in farmland as an investment. At the same time, the industrial sector still suffers due in large measure to the
many closures of factories and failures of businesses in recent years. Unfortunately, too many Delta towns have too many
empty buildings, and lack of new industry has also meant less development of additional land. Still, many communities report
growing interest in commercial property, indicating the first stirrings of a possible upturn in this sector.
While one could not say there is a residential building boom throughout the Delta-except perhaps in DeSoto County and the
Jackson metropolitan area, realtors in many communities report that selling prices are maintaining a good level, and say there
is a trend toward larger, higher-priced new homes.
“Cleveland remains a consistently good market,” states David Griffith of Griffith Real Estate, Inc. “House prices remain
stable, even increasing in value some each year.” Griffith, who is also the director of the Cleveland Board of Realtors, says
the average spec house in the area is between 1,500 and 2,000 square feet, with prices ranging from $125,000 to $175,000.
There is more custom building underway in the area than speculative building, he adds, although there are some new neighborhoods
under development.
“There’s a good bit of custom building, both in town and in the surrounding areas,” Griffith comments. “People are wanting
bigger houses and more land, but want to stay close to town. And while the majority of buyers seem to want new homes,
there are a number of older homes being bought and updated-especially in the downtown area. These houses go very fast.”
Comments Libbi Logan, sales associate with Lynn Pace Real Estate, Inc., “January, February, and March have been very
strong for us here in Cleveland. The way the year is starting out, it’s on the way to being the best early spring sales period
ever. We’re very pleased by the response to our web site, which includes listings and informational and community links, as
well as many other resources for buyers. It’s received a very strong positive response, and I think it has helped make this year
such a good one for us.”
Andy Lee, assistant vice president at Merchants and Farmers Bank in Cleveland, observes that there is a good mix of buyers
for the area’s older homes. “You see younger couples buying them because they’re looking for more room, and they can do
a lot of renovation work themselves,” he says. “Then there are older couples who are looking to get back to a different lifestyle
and are really putting a lot of money into these homes.”
According to Lee, first time home buyers are still typically opting for the traditional twenty to thirty year mortgages, while
those buying their second or third house are looking for lower rates and shorter terms, to free up their money earlier for retirement
and other things.
The real estate market in Greenwood has been tight for the past couple of years, says Belva Pleasants of Short Street Realty
Co., Inc. and president of the Greenwood Board of Realtors. “The market here has been affected by industry shutdowns and
loss of jobs,” she comments. “There are a lot of houses on the market because people are having to move elsewhere to find
jobs.
“Overall, the residential market is still fairly good, however, even though the average days on the market remains high,”
she continues. “MLS figures show there were 181 sold listings in 2003, with an average sold price of $99,366.” This is still
a good average price for a slow market like Greenwood, she says, and points out that generally, selling prices stayed close to
the listed price.
“We feel the real estate outlook for the Delta is good over the next year, especially with new manufacturing facilities and
other expansions coming in,” says Ray Millwood, president of the Greenville Area Board of Realtors and owner of Ray Millwood
Realty and Home Inspections. “Values continue to rise, both in residential and commercial properties.”
On the residential side, he reports that the average is approximately 265 homes on the market, reflecting a more stable market
environment. Greenville realtors sold over thirty units in just the first two months of the year, totaling nearly $3 million
in sales, Millwood says.
Multiple Listing Service statistics for Vicksburg residential sales, as provided by Vicksburg/Warren County Board of Realtors
president Vanessa Leech, show 63 transactions, with an average sales price of $115,430 (and ranging up to $380,000)
for the period between January 1 and March 15. Leech comments, “The average time on the market is about 123 days, which
is still long. I’d like to see a 90-day average.”
Among the clients of her firm, Leech Real Estate of Vicksburg, Inc., she says there is a mix of local residents who are moving
into larger houses, and new residents who have come to the area along with new industrial jobs.
Leech comments that older homes in the area are generally being purchased by couples just starting out and moving from
apartments. “These are houses in the $120,000 to $150,000 range that young professionals are buying. There’s not a large
inventory of these homes available.”
Billy Nowell, a broker with Griffith Real Estate specializing in commercial property and development (and a local alderman),
reports that the commercial market is also holding up well in Cleveland. “Downtown is still very strong-rental and purchase
prices remain good,” he comments. “New industry coming in will only help.
“Most of the inquiries I receive are about smaller tracts, and many of these are about downtown property. I get numerous
calls about undeveloped property along the highway. A lot of people are coming here to open antique and specialty stores, and
we’re seeing interest from chain stores as well.”
Adds Henry Mosco of Mosco Land and Realty, “There’s been a lot of interest in Cleveland commercial space since the first
of the year. I’m getting inquiries about retail stores, apparel shops, even some restaurants. Both local people and out-of-towners
are looking for locations along the highway.
“We’re also seeing a good deal of activity in the Indianola market; there’s some new strip shopping centers. There’s talk of
new Super Wal-Mart stores in both towns, and that would certainly help trigger other retail development.”
Belva Pleasants says MLS statistics show thirty-one listings of commercial property in Greenwood during 2003, with three
sales. “There were also 83 lots, with nineteen sold,” she reports. “In both cases, the figures show that properties stayed on
the market a long time before selling.
“There is growing optimism, however. The governor has announced that our prison will re-open-that will create many good
jobs. And Milwaukee Tool plans to add around 200 people over the next year. These are things which will stimulate both home
sales and commercial growth.”
“There is some commercial property on the market in Greenwood,” says Ray Millwood, “especially along Highway 82. More
and more of the commercial property is newly developed land, and projects under consideration in the city should generate more
development. We also have a number of older buildings being renovated, and firms are moving back into them.”
The commercial real estate market in Vicksburg remains slow, reports Vanessa Leech. “We have a lot of older commercial
buildings in the downtown district that really need heavy renovation. There is limited activity in undeveloped land-much of it
stays on the market for a long time.
“But there are some positive developments which I believe will stimulate construction and commercial sales,” she continues.“Vicksburg has just announced plans for a new city recreational complex. This will bring in tournaments, which will bring
in more people and more money. I think we’ll see some spin-off commercial growth. Also, some longtime infrastructure plans
are now being implemented.”
E. Russell Black, Jr. of Capital Agricultural Property Services, Inc., which provides land management and brokerage services
throughout the Delta, says that agricultural land values are generally stable or even trending upward. He cites several factors-
the good crop year in 2003, improved commodities prices, low interest rates, an effective farm bill-that are positively
affecting the market.
“There’s less acreage on the market now than a year ago,” he observes. “Farmers made money last year, and the outlook
is good for this year, so fewer of them are selling. Also, a number of farms had already been sold in the past several months.”
Existing farmers are doing a good part of the buying, he reports, looking to expand their acreage. Additionally, however,
buyers from other parts of the country are interested in Delta land. “One attraction is the irrigation, especially compared to
the West, for example,” says Black. “There’s also land being sold for hunting or conservation use-you see more of that in the
lower Delta.”
Farming units are steadily getting larger, he points out—in turn, unit sales are larger. “It takes more acreage now for farming
to be economically feasible. Also, modern farming equipment makes it more practical to farm more acreage.”
Comments John Dean of LANDMART/Dean Land & Realty Co. in Leland, “2003 proved to be one of the most successful farming
years on record in the Delta, restoring both confidence and bank accounts throughout the area. Because of this and other
positive economic factors, we are now experiencing a somewhat steeper upward trend line in current land values.
“From an investor’s point of view, the most desirable farmland property might range from 600 to 3,00 acres in size, $1
million to $4 million in value, and be able to show a competitive net return of approximately six to seven percent,” he adds.“Currently there are very few properties fitting this description on the market. It is obviously an attractive time for owners
of such properties who make have reasons to re-position some assets, as there are presently readily available buyers.”
At Indianola’s Kirk Land and Realty, Bobby Kirk agrees that the agricultural land market has “tightened up” in the last two
years, and comments that less land on the market has resulted in some stabilization of prices.
“After a good crop year, a number of farmers are in a position to buy, and expand their acreage,” he says. “And they’re
paying good prices for it-that’s a healthy sign. On the other side of that, since there’s not a lot of good land on the market, if
someone has ever considered selling, this might be a good time.” He adds that 200 to 300 acre tracts make up the bulk of current
land offerings, although there are a few tracts of up to 2,000 acres on the market.
“There is a good deal of institutional buying going on,” Kirk continues. “Investors are realizing that farmland remains a good
investment, with a good, solid five to six percent, or better, return when you lease the land. That’s probably better than CD’s,
stocks, etc. When the stock market was blooming, you might have been able to get better returns elsewhere, but that’s no longer
the case.”
While the real estate picture in the Delta remains mixed, the region’s rich agricultural land remains one of its most valuable
resources, and investors are beginning to rediscover it. Those looking for commercial property can find an abundance of existing
buildings and undeveloped land, in communities eager to work with them to bring their new businesses to town. And new
residents brought to the area by these businesses, or current Delta citizens ready to move into newer or bigger homes, will find
that the region offers a wealth of residential property choices. DBJ
