By Keysha Drexel
The Over the Mountain real estate market is getting a boost from the statistics as the busy spring home buying and selling season approaches.
The Birmingham Association of Realtors recently reported that the four-county Birmingham metro area maintained a steady double digit increase in home sales in 2013 compared to the previous year.
The association said home sales in Jefferson, Shelby, St. Clair and Blount counties ended 10 percent ahead of 2012. The association said 11,857 homes were sold in 2013 compared to 10,770 in 2012.
Those numbers, coupled with a 9 percent increase in the average sales price, add to up good news for the real estate market in the Birmingham metro area, said Chip Watts, president of BAR.
“This overall increase in housing activity is a very strong and true indicator that the market is back in Birmingham,” Watts said. “I am pleased to report that now is the time to buy.”
The BAR and the Greater Alabama Multiple Listings Service also report that the median sales price–or the mid-point price of all homes sold–was up 9 percent from 2012 at $163,970 for 2013.
The association said that foreclosures remained a significant number of sales in 2013.
About 200 of the 887 homes, or 23 percent, sold in the four-county area in December were foreclosures. The average price on the foreclosed homes was $79,280, compared to the $239,280 average of the non-foreclosure sales.
In the Over the Mountain area, once again the Hoover area showed the strongest residential sales.
In the Hoover/Riverchase/Bluff Park (Jefferson County) area, 1,123 homes were sold in 2013 with an average price of $266,943.
The North Shelby/Hoover area in Shelby County posted the next highest number of residential sales in the Over the Mountain area in 2013 with 908 homes sold with an average price of $$335,500.
Liberty Park/Vestavia came in third with 763 homes sold in 2013 with an average price of $326,928.
In Homewood, 492 homes were sold in 2013 with an average price of $274,399. Mountain Brook residential sales for 2013 came in at 425 with an average price of $579,378.
In the Crestline Gardens/Crestline Park/Irondale area, 301 homes were sold in 2013 with an average price of $165,724. In the Bluff Park/Hoover/Riverchase area in Jefferson County, 231 homes were sold at an average price of $266,943 in 2013.
In the Altadena/Cahaba Heights area, 82 homes were sold in 2013 with an average price of $183,443. The North Shelby/Hoover area in Jefferson County saw 17 residential sales in 2013 with an average price of $290,106.
All those numbers point to good news for the Birmingham metro real estate market, especially the Over the Mountain area, real estate professionals say.
James Harwell, the multiple listings service president for the BAR, said the real estate market is finally returning to what it should be.
“We are far more balanced and in a far healthier place than we have been a long time,” Harwell said.
Harwell said he is most encouraged by the numbers showing what homes are listing and selling for in the Over the Mountain area in 2013.
“Those are the best numbers, the ones that encourage me the most,” he said. “Most of those are hovering around 90 percent. What that means is that if you list a house for $100,000, chances are you’re going to sell it for about $90,000.”
That indicates sellers are being more reasonable in the listing prices for their homes and that buyers are paying closer to those listing prices.
“When the frenzy happened, you’d have people listing a $100,000 home for $300,000, and those were not real numbers. We have to keep an eye on those numbers and make sure it doesn’t get so out of whack again,” Harwell said.
Harwell said the slow and steady increase in home values is also a good sign for the Over the Mountain real estate market.
“Another good thing is the average price is climbing back up because values are increasing,” he said. “I’m not keen on values going down so people can make money. Values go up and down just like in any market, but you never want them to go straight up or straight down.”
Inventory is also at a more balanced state than it has been in years, Harwell said.
“For a while it was way, way too high and then it got a little bit low, but right now it’s healthier than it has been in a long time,” he said.
Harwell said the real estate market is still correcting itself after the frenzy of the early 2000s.
“If you look at the numbers from 2013, everything happened quickly in the first six or eight months of the year and then it kind of got quiet. That’s a normal market,” he said. “We got spoiled by that year-round buying and selling frenzy before the bust, but now we’re getting back to a seasonal market, and that’s the way it’s supposed to be.”
Historically, Harwell said, the hottest time for the real estate industry is a five-month window between April and August.
Watts said the current market presents a balanced atmosphere for both homebuyers and those looking to sell their homes this spring and summer.
“It’s the time to buy and the time to sell because we have a very balanced market right now,” Watts said.
It’s a good time to sell a home in the Over the Mountain area, Watts said, because many homeowners have been able to regain some of the equity they lost after the recession and the housing bust.
“Especially in the Over the Mountain area, you have homeowners who have not only regained that equity but built new equity,” he said.
Watts said he’s seeing a lot of young families who bought starter homes right before the recession and are now ready to move to larger houses.
“In a lot of cases, you have young families who bought a house in 2010 or 2011 and since then have added another child to the family. They’ve been restricted on what they could buy because of the recession,” Watts said. “But now that they’ve regained that equity, they are ready to sell and move to a house that better fits their needs.”
And while young homeowners are putting their houses on the market so they can better accommodate their expanding families, Watts said older Over the Mountain residents are also on the move.
“We’re starting to see more of the Baby Boomers selling their homes and downsizing,” he said. “For example, they are downsizing from a larger home in Mountain Brook or Vestavia or Hoover and moving to smaller homes like the neighborhood across from Samford University. They want to stay in the Over the Mountain area, but they don’t want to have to worry about home maintenance and those kinds of issues.”
But the uptick in young families and Baby Boomers putting their houses on the market doesn’t mean that homebuyers are inundated with endless choices of homes for sale in the Over the Mountain area, Watts said.
“Inventory is still down from what it used to be in the darkest days of the recession,” he said. “What you’re seeing now is some of these homes in the Over the Mountain area are literally staying on the market for less than 10 days.”
And that’s not a bad thing, Watts said.
“Young families and others are taking the risk of buying another home while their current homes are on the market, and they are finding out that taking that gamble is paying off and they’re able to sell their homes quickly and get into their new homes quickly,” he said.
Last year, real estate professionals said homebuyers were looking for houses that were move-in ready, but this year, Harwell said he’s seeing more homebuyers willing to put in a little work to make a space work for them.
“People are willing to do the renovations or updates themselves if the price is right,” Harwell said. “That’s a very good sign for the market because people aren’t willing to do that work if the values are tanking and have no hope of ever recovering. That shows that people have confidence in the Over the Mountain real estate market.”
Watts said the Over the Mountain area continues to be popular with homebuyers across the board because of the quality of its schools, jobs and amenities.
“I think the number one thing that attracts people to this area is the schools. A school system can have a tremendous impact on where people are willing to buy a house,” he said.
Watts said real estate professionals in the Over the Mountain area saw direct evidence of that over the summer when the Hoover school system was considering eliminating school bus service.
“With the Hoover bus issues over the past year, there were several families who decided not to buy in Hoover, and that’s because a lot of them were two-parent working families and they relied on school buses to get their children to and from school,” Watts said. “It was too much of a risk for them to buy in Hoover if there they couldn’t count on the buses, so they had to find something comparable to Hoover.”
For many of those potential Hoover residents, that mean moving east and south, Watts said.
“You saw an influx of purchases in the Oak Mountain area that happened very quickly over the summer and were directly impacted by the Hoover bus situation,” he said.
Watts said the increased activity in the real estate market in Liberty Park and Vestavia Hills was probably due to new subdivisions built in the area and the quality of life amenities offered.
“They have great schools, great shopping, great youth sports programs, and you have those subdivisions that generate a spirit of family and camaraderie in the neighborhood,” he said. “That holds true for Mountain Brook, for Homewood, for all of the Over the Mountain areas.”
That quality of life is what continues to make the Over the Mountain real estate market a healthy one, Watts said.
Harwell said he thinks the market will continue to improve as long as buyers and sellers change their mindset and get back to thinking of homes the way they did before the bubble of the 2000s.
“I just encourage people to look at real estate as a good, sound investment instead of a money-making venture,” he said. “Get away from the mindset that it’s going to be your retirement, because it’s not. It’s not about using and abusing the real estate market to make some quick money. It’s about making a long-term investment.”