By Dave Parrish
Rarely a day goes by without my hearing the question: “How’s the market?” Those of you who have been reading The Real Story since 2008 or even for just the last year or two or have asked me that question during the last 10 years know that my response is always the question: “That depends on where you live, where do you live?”
Sure enough, it does depend on where you live, the market you are talking about or interested in. The metro Birmingham (Jefferson, Shelby, St Clair, Talladega & Blount counties) market is comprised of literally thousands of micro markets each with its own unique conditions and considerations. Your perspective: buyer or seller, long term, short-term, also makes a difference in a useful answer to the question: How’s the market?
A response of GREAT! Really doesn’t tell you a darn thing. But them quoting statistics ad nauseam from some invisible teleprompter isn’t a lot more useful either. You need real information… interpreted and translated to useful information! Useful information being the important goal.
So it is that when I answer questions about the market, I am most often focused on what the listener is most concerned about and am thus focused on information about a very specific micro market. However, as is often the case, there is an exception to every rule or good practice.
WARNING: Following is some general information about the entire Metro Birmingham Market. It is useful in that it talks about the general trends in the overall subject market… the current trajectory of the market. However, it alone is insufficient for making decisions on buying or selling real estate. Finding exceptions to these trends is exceptionally easy. Nonetheless, you should find this information useful – sometimes comforting, sometimes challenging. But, nonetheless useful.
Remember this is general information… high-level bullet points:
The Great Recession (for real estate) is over!
First-Time Home Buyer Programs (read: tax credits, lenient terms, etc) have all but disappeared.
Property values are again appreciating… median appreciation rate is in the 3-4% per year rate.
Inventory of available homes is low… It is increasingly difficult to find a home quickly.
It is no longer a Buyer’s Market… We are experiencing a moderately strong Seller’s Market… conditions are favoring the Seller.
Multiple offers are common – often resulting in calls for Buyers to provide their Highest and Best Offer! It is not unusual for buyers to loose out on that perfect house and have to begin the search process again.
Foreclosures are definitely on the decline. They have rarely been the best buys on the market.
Investors are having to compete for homes in “good” markets!
Many distressed markets are becoming re-vitalized.
What Buyers want is changing… millennials (representing the largest group of home buyers) have a totally different view of the ideal home. This will impact the future value of your home.
The day of the McMansion is coming to a close.
Low interest rates continue… but expect them to begin to rise soon. The Federal Reserve has made it known that they will rise as a response to inflation… soon.
New Home Construction has resumed… but at an insufficient level to meet demand.
Build-able lot inventory is close to an all-time low.
Cost of new construction is rising at a rate higher than inflation or appreciation.
As has historically been the case, existing homes offer a far superior deal per square foot than new construction.
Inflation and anticipated interest rate increases are reducing the buying power of most buyers… the amount of home that a buyer can afford today is greater than it will very likely be next year.
Now is a GREAT Time to Sell!
Yes, Now is a Great Time to Buy too!
Before acting on any of this information about the Changed Market, you need the help of an experienced real estate professional capable of answering that important question for you!
May the Market be with you.