By DENNIS SEID
Fears of a real estate bubble in other areas of the country don’t seem to be affecting Northeast Mississippi, where communities continue to build, expand and improve their homes, offices and businesses.
While it’s nearly impossible to track down every dollar spent in every city, town and village in the 16-county region, the Daily Journal pulled the figures for three of the fastest growing communities to get an idea of just how well things are going.
Last year, the total construction value in Tupelo, Oxford and Starkville was a whopping $184.4 million, nearly 11 percent more than a year earlier. In the past three years alone, the three cities have combined for more than a half-billion dollars in construction. Add the construction value from other communities like Saltillo, Guntown, New Albany, Corinth, Booneville and Fulton, and the figures climb even higher.
Max Hipp, executive director of the Oxford-Lafayette County Economic Development Foundation, said the explosive growth in Oxford the past few years is the result of more than a decade of marketing the area.
“While it’s hard to analyze how many people are buying second homes or buying homes for students at the University of Mississippi, we are seeing more affluent types coming back to Oxford, not only as retirees, but also working and living here,” he said.
With the university, a strong emphasis on arts and culture and a burgeoning business community, it’s no wonder that the value of construction in Oxford since 2001 has topped $286 million, second only to Tupelo’s $317.5 million.
In Starkville, David Thornell isn’t complaining about his city’s growth, which had recorded some $172 million worth of construction since 2001. Thornell, executive director of the Greater Starkville Development Partnership, said those numbers don’t include what’s going on at Mississippi State University.
“They’ve had some $200 million in construction and renovation, which aren’t even in the city’s books,” he said.
Like Hipp, Thornell said his city’s relationship with a university has produced great benefits.
“We’re hitting on all cylinders here, and not just in any one sector,” Thornell said. “Not only is it growth in retail and housing, but also manufacturing. And we’ve probably added 10 new restaurants in the last year.”
Those construction dollars represent not only new residential construction, including single-family and multi-family units, but also renovations and additions such as swimming pools, sheds and outbuildings. The numbers also include the value of commercial construction and renovation.
Clearly, Northeast Mississippi is holding its own while other parts of the country are worried about a potential real estate “bust” in their communities.
“The real estate business has had five good years,” said Esther Brown, owner-broker of Prudential Magnolia Realty in Tupelo. “We’ve been hearing about the bubble burst, but that won’t happen here. Perhaps it will slow, but we don’t have a bubble to burst. We’ve had a slow, steady rate of appreciation, which is good.”
In areas where bubble-popping is a worrisome topic, skyrocketing home prices are the culprit. In some high-growth metropolitan areas, it’s not uncommon for home values to double in months. While that may be good for the homeowner, the ride can’t last forever, particularly with rising interest rates. If no one can afford the home, the homeowner can’t sell. That’s when the bubble pops.
“We don’t have homes in Tupelo or Northeast Mississippi that will double in a few months, and that’s a good thing,” Brown said.
In Oxford, Hipp has seen some home values triple in value in 10 years.
“We thought that in the late 1990s that it wouldn’t get any more expensive, but then there was a slowdown for a little while,” he said. “But there’s been a resurgence to another level. I think some of the prices are bubbles in people’s heads, but I see no regression” in our growth.