10 Fastest-Growing Real Estate Markets~Birmingham Alabama is number 3! (Huntsville, Decatur: insurance, lofts)

[Back Again]

Check this link out

10-Fastest-Growing-Real-Estate-Markets: Personal Finance News from Yahoo! Finance (http://finance.yahoo.com/real-estate/article/105048/10-Fastest-Growing-Real-Estate-Markets - broken link)

[lovesfelines]

I read this article last week. Would like your opinion, since you are a real estate agent. There seems to be a lot of homes on the market, and it appears to be slow in Birmingham. I recently moved from Florida, where it is extremely slow, and this same magazine listed Florida as a market which will continue to go down in certain areas. What is your opinion as to the reason for the current slow-moving Birmingham market, and when do you see things picking up? Do you agree with the projection for Birmingham, as listed in this article? Thanks in advance for your answer.

[Back Again]

The following s my opinion only

I feel a lot of the problems with the Birmingham market is the news media -- Doom and Gloom in the market place. This is why people are not buying in an otherwise buyers market. What one needs to remember, the reports on CNBC, CNN and other stations are what is happing in the more depressed markets in the nation. It would be the same as you turning on the TV and hearing a national weather report vs a local report. If the news reported the National weather today is heavy snow, but locally, it is sunny and warm, would you pay any attention to that report? My guess is no, yet people are listening to the National housing forecast. The Birmingham area never had a big bubble in the first place, so there is not a big bubble to burst

I, have been talking with some of my fellow Realtors, and we have seen the Birmingham market start to pick up. We have been noticing each day, we are getting more and more calls from people looking to buy. And why not, we still have a good inventory of houses to choose from in all price ranges. Interest rates are still very low, and we feel that people are now starting to see that it is now as bad in the Birmingham area as the news media has been reporting.

I have several buyers looking to leave Florida and buy here, as soon as they can sell their homes there. I did hear on CNBS, that the West Coast of Florida's housing market has finally bottomed out, but so far I have not seen any impact from that report. Florida's problem is a little different then the rest of the nation. Florida's housing market starting getting in trouble before the rest of the nation was in trouble. Quite a few homeowners wanted out of Florida right after Katrina in 2005 because of the rising insurance cost and some because they are just plain fed-up with hurricanes altogether. I know Realtors in Florida, and they seem to agree with me on this.

I can not tell you if the figures in that report are correct or not, I'm a Realtor, not an economists. I do feel once we are out of the mess, the Birmingham area will bounce back just fine, most likely, better then "just fine". When will this happen, well that is the million dollar question and a lot will depend on just who wins this election.

I sure hope this helps some, even though it might not be what you would have liked to hear.

Best of luck and let me know if there is anything I can do.

[cpg35223]

As somebody who's done a lot of real estate marketing, I can speak to the problems in the metro area.

First of all, being one of the 10 fastest-growing real estate markets in the US is, right now, akin to being one of the 10 best hockey players in Ecuador. There just aren't that many in the first place.

That being said, Birmingham has shown stability. That's because Birmingham's economic growth pattern over the past 25 years has been steady 3-4% growth year after year. Nothing dramatic, and no drop offs. Just steady as she goes.

The problem with the Birmingham market has much more to do with the overbuilding of the market by developers in the past three years. I remember having meetings with developers in 2006, begging them to slow down. I kept looking at the absorption studies and thinking, "the market just isn't here right now." But people kept building up houses as fast as they could. What's more, they were building the wrong kinds of houses. Instead of building houses in the price range of $300K and under (which continue to sell well), builders were putting things up with a price tag of $400-$500K, homes that were a 45-minute commute from downtown. For $500K, you can buy a nice house in Mountain Brook near all the amenities and great schools in the world.

The same thing happened in the loft market. Downtown Birmingham had turned around nicely as a place to live. However, about five years ago, people started catching wind of it and putting up lofts at a rate far faster than the market could possibly sell. I had a meeting with a major loft developer who should me all these grandiose plans for $600,000-$750,000 lofts, and I expressed reservations about the price point. I might as well have farted in the room. Yet, those same loft developments either have had to dramatically lower their prices or went belly up, three years later.

Intriguingly enough, I think Birmingham is actually poised for some rather rapid expansion. First, the market appears to be weathering the economic storm in solid fashion, with unemployment actually dropping to 3.1% last month. Second, income growth for the Birmingham market has been the nation's strongest over the past 25 years. Third, relocation continues apace to the market. No, there hasn't been a Thyssen Krupp in Birmingham lately, but lots of smaller 100- and 200-job relocations to the market. Fourth, because Birmingham homeowners haven't lost value the way people have in places like Atlanta, Florida, California, the Rust Belt and the Northeast, a much greater amount of equity has been preserved. Finally, looking ahead, I believe that Birmingham will become a much more prominent distribution center with the completion of I-22 to Memphis. I-22 and the new rail line coming through increases our transportation capacity and geographic reach significantly.

Evidently, this optimism is being shared. According to a recent Manpower survey, 57% of Birmingham employers plan on increasing staff in 3Q. That's no typo. 57%. That's a stunning number, especially when you look at how the rest of the country is faring economically.

Overall, I'm already seeing pickup in activity in a number of ways.

[lovesfelines]

CPG55233 (hope I got your username right)n and Backagain - thank you both for your input. I appreciate it so mucb. I sold real estate in Central Florida during the frenzy of investors and flipping, and I have seen the median price first rise t0 263k, and now fall to approx 249k. This is for a 1200 sq. foot home. And, I recognized that Birmingham is a different market, but your input was greatly appreciated. Real estate is so local, and I knew not much about B'ham. Thanks to both of you.

[harry chickpea]

cpg35223, I tried to rep you, but seem to have done so recently. Good post.

IMO, B'ham is a strong market, but the I-565 corridor between HSV and Decatur is about to go golden, along with 72 from HSV to Athens. BRAC and new auto plant, Bass Pro and etc. shopping center, and a lot of undeveloped land in a non-union state with low property taxes and insurance burden, the growth in that triangle will be outstanding.

[lovesfelines]

All of your comments are so interesting to me. I first sold RE in FL in 1997. At that time one could purchase a single family home, with approx. 1600 sq feet, and a two car garage for somewhere in the area of 90k to 120k, depending on the exact area in central florida. Most homes were on 1/4 acre lots, or larger, and very few multi-family housing (townhomes, or condos) were available. Of the townhomes and condos that were available, most were very old, or in run-down areas. At that time, several realtors and I were discussing the future market, and in my opinion, I expected to see more multi-family housing when the price of single family homes went up, and also when the developers were forced to pay more for land. And, land was becoming more and more scarce as the development frenzy continued.

These factors were at play at a time when the influx of people into the central florida area was spiraling. Fast forward to the year 2003, and what a different world. The 90k single family home was extinct - in fact, one could barely find a 90k townhome or condo. The average time on market was somewhere around thirty days - from listing to closing. If a listing did not sell in that timeframe, then something was drastically wrong. Houses badly in need of cosmetics were being scooped up as if they were lined with gold. Meanwhile, all of the people who were moving here expecting to get "cheap" housing were having rude awakenings. Yet somehow, the frenzy continued. Then came the three hurricanes of August 2004 - Charlie, Frances and Jean. Many production homes did not withstand the constant wind-driven rains, and many homes had various degrees of water damage. Insurance companies were difficult, and Allstate cancelled a number of longtime polocyhbolders. (They are trying to get out of Homeowners market in Florida) I know - I was one.

At the present time, a townhome in a nice area will cost at least 175k, and people are paying over 240k for a resale that is only 1200 sq. feet. New single-family homes built since approximately 1998 have all been on zero-lot lines. The current market is definitely a buyers one, with homes moving very slowly. Overall, prices are falling, and new home builders are offering slashed prices in a number of central florida communities. I lived there 21 years, raised two children, and came to love it . Yet, I have to admit that housing has gotten crazy, price-wise. Money magazine projects that the Central Florida (Orlando) market will continue to fall until bottom is reached sometime in July to August of 2010. The article projected a loss of 29% from the current median price. Not sure if I believe it will be that great, but also I cannot say that it won't. I do know that there have been many effects of the inflated housing market, as many people cannot move to the Central Florida area to take jobs in retail or with the attractions, as those jobs are lower-paying, and housing is now too high for many people. Just wanted to share observations from one of those "10 worst markets" as noted in the Money Magazine article. And again, thanks to all of you for your input.

[RangerDuke08]

I'm sure huntsville is in there somewhere, it's really a mix of job opportunities and low priced housing, median housing on the top 10 list were all under $175k. As the economy slowed down so did second home owners and jobs, expect after 2010 to see another growth cycle.

[cpg35223]

Originally Posted by harry chickpea

cpg35223, I tried to rep you, but seem to have done so recently. Good post.

IMO, B'ham is a strong market, but the I-565 corridor between HSV and Decatur is about to go golden, along with 72 from HSV to Athens. BRAC and new auto plant, Bass Pro and etc. shopping center, and a lot of undeveloped land in a non-union state with low property taxes and insurance burden, the growth in that triangle will be outstanding.

Agreed with you on Huntsville, IF McCain wins out in November. Not trying to be a gloom-and-doomer party hack, but I'm fairly convinced that an Obama victory will squelch a lot of Huntsville's growth. It still hasn't quite matured past the economic level of a company town. The Volkswagen plant would help matters a great deal towards diversification.

Pretty much, the northern half of the state will drive economic growth for a long time to come, Thyssen Krup notwithstanding.

[lovesfelines]

One more quick question for those who answered to my first question: The article that cites Birmingham as the # 3 best market projects a 2.9% increase in the median price in one year, and a 29% increase in the median price over a 5 year period. Agree, or not? Thanks in advance for your answers.