We asked some of our friends in the real estate business a few questions about the current state of the OTM market as we enter the important spring home buying season. Responses below have been edited for space.
Gusty Gulas
Associate Broker-Team Leader,
Gusty Gulas Group
In what ways has the pandemic affected the OTM real estate market?
The pandemic has allowed people to reevaluate everything about life, like their career, relationships and even their homes. When interest rates dropped to the lowest in history, it allowed people to either refinance their home or take advantage and upgrade to their next home.
Over the past 12 months, have you seen any changes in what buyers are looking for?
With the trend of employers allowing more flexible work locations and children being home more, we have seen clients seeking more square footage for in-home offices, playrooms/flex space and gyms. We’re also seeing people moving in an effort to be closer to family.
Which OTM neighborhoods are hot right now?
Honestly, which neighborhood is not hot? We are frequently seeing multiple offers on accurately priced homes in most areas.
Are there any up-and-coming areas where a buyer can find a good deal?
Buying a new home is such a personal experience that is unique to each client, that it’s hard to pinpoint any specific area. A good deal has multiple meanings but being able to take advantage of these super-low interest rates allows the majority of homes to be “good deals.” In the end, the best deals are the ones where our buyers are in a home they love, in the location they sought, at a price they’re comfortable with … with the least amount of stress possible.
What advice are you giving to sellers getting ready to list in this market?
Be proactive in completing any known repairs and in some cases making needed upgrades. Pricing the home accurately is very important from the start. I have found that our sellers who work with their agent to list their home at a reasonable and accurate price are more likely to see multiple offer scenarios and consistently net more money at closing than when they list at a higher, less realistic price. We are problem solvers and every client’s goals in selling their home are different. When we approach listing your home, our agents create a game plan and strategy tailored to fulfilling your unique goals while keeping your ideal end-result in mind.
Roxanne Hale
Owner and broker, Art House Creative in Homewood
In what ways has the pandemic affected the OTM real estate market?
The pandemic has caused so many people to re-think what they really need and want in their homes. As people have spent more time cooped up there, some have decided to sell and find something more suitable to their current needs. Others feel less anchored to a location because they can now work from anywhere – virtually. Demand for homes has increased, while supply has remained extremely low. If you are a seller today, it’s really your market!
Over the past 12 months, sales volume in communities over the mountain has increased by 12% from the same time last year. Homes are selling faster, too! The amount of time homes spend on the market has decreased by nine days, to just 26 days on average. And homes are selling for more. Sales prices are up by 5%, as well.
In short, the pandemic appears to be driving up demand, which has both decreased the amount of time that a home might stay on the market and has increased the average sales price. Exceptionally low-interest rates are also a significant factor in making homes easier for most people to afford.
Over the past 12 months, have you seen any changes in what buyers are looking for?
This is such an interesting question! Yes! While interest in owning a four-bedroom home has increased in recent years, it’s an absolute requirement for buyers today.
With some family members working from home and others doing schoolwork there, they need the extra space to spread out.
Many buyers are also interested in auxiliary spaces like renovated sheds or basements that can be converted to an office or a home gym.
I have had many clients now asking to shop for homes that have access to nature and water. They want safe ways to work out and get fresh air. Homes with swimming pools are in demand now, too, for the same reasons. Large yards have always been in demand, and that hasn’t really changed.
Which OTM neighborhoods are hot right now?
If a community has access to a lake, offers walking trails, sidewalks and parks, it is probably doing pretty good right now.
Lake Wilborn is one example. Price and demand in Homewood are also on the rise, with many listings seeing up to 10-12 offers on their first day on the market.
Right now, most homes are selling quickly with multiple offers!
Are there any up-and-coming areas where a buyer can find a good deal?
Bluff Park in Hoover is a great spot to find an affordable home in a walkable area. Although prices are on the rise in West Homewood, it is still an excellent place to buy. Crestwood and Avondale are hot-hot-hot.
What advice are you giving to sellers getting ready to list in this market?
Now is an excellent time to list your home – it’s a seller’s market.
There are two things we tell sellers. Buyers want good, clean homes. We encourage all our sellers to spend a little time de-cluttering and cleaning before listing. Secondly, price it right. In today’s market, there is no need to build in negotiating room. If you overprice your home, buyers will ignore it until the price comes down. If you price it right, however, the price may get driven up organically with multiple offers.
Once we are ready to list, we ask them to go out of town for the weekend and let the home show. By Sunday, we typically have a stack of offers for them to review.
Kelley Caine and Hill Weathers
Ray & Poynor
The sister team of Kelley Caine and Hill Weathers works to provide clients with the knowledge, service and professionalism needed for a successful real estate transaction. Caine and Weathers have more than 20 years of combined experience in residential real estate.
In what ways has the pandemic affected the OTM real estate market?
Surprisingly, the real estate market has exploded. Once everyone was forced to be home for a while, we think people realized that they wanted to make changes to their current living situations. Also, with rates being so low, borrowing money to purchase a home can still be a reasonable investment.
Which OTM neighborhoods are hot right now?
The Over the Mountain neighborhoods that are doing very well right now are the areas with walkability; they’re close to shopping and restaurants. Also, the schools for the OTM communities always enhance property values.
Over the past 12 months, have you seen any changes in what buyers are looking for?
Buyers are looking for updated, move-in ready homes with open floor plans.
Are there any up-and-coming areas where a buyer can find a good deal?
In our opinion, great buys are homes that need a little work in a great location.
What advice are you giving to sellers getting ready to list in this market?
Sellers only have one chance to make a first impression. Do the work on the front end of your listing. Sometimes spending a little money to spruce up your home makes the pictures pop and helps it sell for the highest amount in the shortest time period.
Mike Wald
Mike Wald Group, RealtySouth
In what ways has the pandemic affected the OTM real estate market?
The biggest impact from the pandemic is that it has exacerbated the problem with low inventory. More sellers have been hesitant to list. So, prices in Mountain Brook, Homewood and Vestavia have increased at a faster pace than they likely would have otherwise. Those markets are so competitive that listings priced appropriately and in good shape are getting multiple offers. Often, winning bids are significantly above asking price and some buyers are even waiving their contingencies on financing and inspections.
Over the past 12 months, have you seen any changes in what buyers are looking for?
With rates at historic lows, buyers have significantly more buying power. Not surprisingly, the biggest trend we’ve seen in the last 12 months results from the favorable rate environment. Buyers have a stronger preference for updated, move-in ready houses because it’s easier to borrow more upfront and get an updated home than it is to find a fixer-upper that requires additional out-of-pocket investments after closing. So, we’re seeing more multiple offer situations with the listings that are move-in ready.
Which OTM neighborhoods are hot right now?
The perennial neighborhood favorites are continuing to attract more buyers and see bigger price increases. Pretty much everything in Mountain Brook, Vestavia and Homewood is hot. The neighborhoods of Crestline, Hollywood, Edgewood, and the area around Vestavia Country Club continue to outperform.
Are there any up-and-coming areas where a buyer can find a good deal?
There are several up-and-coming areas over the mountain. Vestavia homes, in general, appear to be the best all-around value.
The neighborhoods that are zoned for Brookwood Forest Elementary are undervalued relative to the rest of Mountain Brook. Since Mountain Brook is landlocked geographically (as are Homewood and Vestavia), the supply of homes is pretty much set. So, increasing demand for Mountain Brook homes will likely drive more buyers to the more affordable neighborhoods zoned for Brookwood Forest.
The neighborhoods situated south of I-459, between Highway 280 and I-65, and north of Highway 119 are also likely to see increasing demand in the next several years. The area offers good schools zoned for either Spain Park High School or Oak Mountain High School. The area is also in the path of progress for families moving south from Vestavia, Mountain Brook and Homewood in search of more affordable housing.
What advice are you giving to sellers getting ready to list in this market?
Even though we’re in one of the strongest sellers’ markets in years, buyers still flock to the houses that are priced appropriately and in move-in condition. So, we offer our clients the services of a stager/designer to help them prepare their listing to go on the market. We also share our market knowledge with our clients to help them price their listing to attract the right buyers.
One of the issues contributing to the lack of inventory is that most sellers are waiting to list their house until they find a house to buy. They would rather stay in the home they’re in, than have to move twice. But contingent offers aren’t as competitive as noncontingent offers.
One strategy we’re suggesting to our buyers that have a house to sell is to go ahead and list their property. Then, if they don’t have a house in mind to buy when they receive an offer on their listing, they can negotiate a later closing to give them more time to find a house to buy. Not all buyers will agree to give a seller more than the typical 30 days to close. But there’s really nothing to lose. If they don’t list their house, there’s almost no chance they’re going to sell at the highest possible price. If more sellers are willing to try this strategy, we’ll see an increase in inventory.
The most important advice we can offer sellers is to not sell their house “off the market.” We’re experiencing one of the best sellers’ markets in our lifetimes. Numerous listings are getting multiple offers and selling for more than list price. The only way to find out what a house is really worth is to let the market compete. So, the worst thing a seller can do is negotiate with just one buyer. It might seem convenient to sell without going on the market, but the opportunity cost can be huge in this market.
ARC Realty Co.
“ARC Realty was founded in 2012 with a primary mission of growing and supporting the communities we serve. Opening our Homewood Office in 2020 has allowed us to continue these efforts as we invest our time, money, and energy into this incredible city.” CYNTHIA ZANATY, Office Manager, Homewood
In what ways has the pandemic affected the OTM real estate market?
Jamie Goff: The interest rates at record lows have catapulted our real estate market into a strong seller’s market. There are simply more buyers than there are sellers. It is an imbalance that has existed for the last few years, but (it) has significantly intensified during the pandemic. The lack of housing inventory has acted as a catalyst for bidding wars and, as a result, a strong increase in housing prices.
As agents, we all want listings because we know that in this type of market, we can allow the market to “speak” and can be very successful with getting our sellers top dollar! Behind the scenes, agents are reaching out to each other to find out what other agents may have coming up that hasn’t actually hit the market, so we can get our buyers ready to get in line to try to secure their next home.
As the pandemic has allowed more people to work from home, we all seem to need more space to be able to function. One of the benefits of last spring for me personally was seeing families together more, out walking and actually spending time together. This is great to have the family together, but it does seem to drive the need for larger homes, to allow both working partners to have their own space. This trend also seems to reach into an increased need for multi-generational homes, as well. We have several clients who are buying homes with more space, to allow parents to live within the home.
Unfortunately, the other housing change we have seen is the loss of jobs related to the pandemic and the need to sell and move to a different area for job opportunities. It is happening in both directions, with people coming into Birmingham for work and people leaving the area, as well. With the interest rates driving our market, we don’t see the real estate market slowing down any time soon.
Which OTM neighborhoods are hot right now?
Virginia Lathem: I think the question could be reversed to ask which OTM neighborhood is not hot right now. In this unique time for the real estate market, most all of our neighborhoods can hardly keep up with the demand. Whether you are looking at Mountain Brook, Cahaba Heights, Homewood, Bluff Park or beyond, the market is going to be hot!
Over the past 12 months, have you seen any changes in what buyers are looking for?
Mackenzie Wolnski: This probably doesn’t come as a surprise to many, but over the course of the last year I have seen so many buyers that have to consider home office space when buying. They likely worked from home throughout the pandemic and may even continue to afterwards. Also outdoor living space has become something higher up on people’s list since that was where most, if any, entertaining happened.
Are there any up-and-coming areas where a buyer can find a good deal?
Giuliana Russo Skinner: Birmingham’s real estate is overall very affordable compared to a lot of American metro areas. If you’re a first-time homebuyer looking for a good deal in up-and-coming neighborhoods, you should look into Crestwood, Avondale, Norwood, Woodlawn and South East Lake.
What advice are you giving to sellers getting ready to list in this market?
Misty Joseph: If you are listing your home, listen to your agent on pricing and staging your home correctly.
Kathryn Dorlon
Realtor, Ray & Poynor
In what ways has the pandemic affected the OTM real estate market?
We definitely learned new ways of doing things. Through all of the changes, the market has continued to be strong with an increase in sales price. We did see a departure from what we call the typical seasons of real estate, but it looks as if 2021 will be easing back into the typical seasonality.
Over the past 12 months, have you seen any changes in what buyers are looking for?
Yes. People are looking for larger homes with designated office spaces, Zoom rooms, high-speed internet access and upgraded outdoor living spaces.
Which OTM neighborhoods are hot right now?
Which one’s aren’t? It seems the market is doing well in all OTM neighborhoods. The sales market is hot due to low inventory and low interest rates.
Are there any up-and-coming areas where a buyer can find a good deal?
West Homewood is having a lot of new activity. With new businesses and restaurants sprouting up, plus the remodeled Patriot Park and community pool, its bungalows and fixer-upper homes seem to be drawing a new generation.
What advice are you giving to sellers getting ready to list in this market?
Be ready! If you are thinking about starting to look for a new home, now is the time to prepare your current home. Call your Realtor! They are a great resource and can help guide you in getting your home ready. As I tell my sellers, a home could easily sell the first day it’s listed; it’s good to have a plan in place.
Liz Lemons
Realtor, Exit Royal Realty-Birmingham
In what ways has the pandemic affected the OTM real estate market?
The demand for houses has increased dramatically. Sellers and buyers have had lots of time on their hands to organize and de-clutter their living situations and lives, in general. There seems to be an upswing of people wishing to downsize to lighten their financial load and a desire to relocate to less populated areas.
Over the past 12 months, have you seen any changes in what buyers are looking for?
I have seen many changes and have had a lot of interest from out of state buyers, some because of the increased job opportunities that Birmingham and the surrounding areas are offering. I have also seen an increase in requests to look at less populated, rural areas.
What advice are you giving to sellers getting ready to list in this market?
The best advice that I can give someone that is ready or just thinking about selling their house is to be prepared. First, they should consult a Realtor to represent their interests. Their house should be in pristine condition, in and out, before they have a Realtor list their house. What’s their exit plan? Where are they going? Do they need to sell their current house before they can buy another one? Do they need to work with a lender to get pre-approved for a new mortgage to purchase that new home? If their house is in the best possible state of readiness, they will most likely receive multiple offers. However, they will also need to be aware that the same goes for any home that they may be looking to purchase. A Realtor will help you navigate and negotiate on your behalf. This will help make the transition profitable and as easy as possible.
