Need some info on the real estate market (Huntsville, Madison: credit, houses)

[Charles]

Originally Posted by flowslikeabutterfly

I recommend Madison over Huntsville if you are looking for a return on investment.

Not disagreeing, but are there any data to support this?

[clamoore]

I have evidence that Huntsville homes can provide a nice ROI. We bought our house in '98 for $55K. We invested about $30K over the next 10 years. Sold it for $180K this year. You have to do your research in the market. See if the neighborhood is turning around.

[Charles]

Originally Posted by clamoore

I have evidence that Huntsville homes can provide a nice ROI. We bought our house in '98 for $55K. We invested about $30K over the next 10 years. Sold it for $180K this year. You have to do your research in the market. See if the neighborhood is turning around.

I would hope you made money. Below is the Case Shiller house price index for Atlanta (the closest data set for Huntsville). Rough eyeballing this thing looks like an average annual of around 5% (using the rule of 72) as the average (or median, I forgot) price almost doubled in 14 years (72/5 is about 14).

One thing is Atlanta's housing (and can we project Huntsvilles'?) didn't boom-bubble. It looks almost linear at historical (4%-6%) rates of appreciation. Hopefully it won't pop as the bubble markets are now.

[madisonmamma]

Mawoods,

Yes, we are in a buyer's market, but home prices in this area are down less than 1% from last year, which is astonding! The seller's mentality right now is that "buyers are coming". Sellers are banking on the influx from BRAC (which we should begin to see a larger influx coming this next spring and thus we project a market tightening from that). Still, there are some sellers that are motivated due to a "have to sell" for job relocation, financials, ect. Lots of short sales and there are foreclosures in ALL price ranges. SOME builders are offering BIG incentives, price reductions, ect....but not all of them. Several are overleveraged and need to sell.

Again, it really depends on the seller's situation, property, and property price. Properties that are priced well are selling fast. I sold a house last week SITE UNSEEN for full price, the house had not come on the market yet, the sellers would not allow it to be shown until it did, and the buyers wanted it. I actually wrote TWO site unseen offers (both full price deals) on that property.

I am very familiar with the ATL metro market, you will definately see a healthier market mentality in the HSV area. The main thing you will have to overcome is the "low balling" negotiating in our area. Sellers are getting fair market, and many will reject offers and wait until they do. Houses are still selling for almost 99% of their listed price. That does not mean that some are not overpriced or that there are not some that you COULD potentially get in low.

[TimG]

The future is so bright I gota where shades.

The pent up demand coming from brac has likely been a part of the reason prices have remained stable over the last year despite weaker unit sales. Sellers have seemed content to wait.

Unit sales are dramatically down over our peak 2007 year. However, the next 6 months will likely be the tell tale. ...Real Estate is naturally seasonal and sales are likely headed down further into the winter months pushing up inventory even further. The stresses for weakening prices will certainly be apparent. Those that 'have to sell' or 'need to sell', will likely not be in a good position during this time period.

Regards,

Tim

[DanInHSV]

Originally Posted by Charles

I would hope you made money. Below is the Case Shiller house price index for Atlanta (the closest data set for Huntsville). Rough eyeballing this thing looks like an average annual of around 5% (using the rule of 72) as the average (or median, I forgot) price almost doubled in 14 years (72/5 is about 14).

Have to laugh last year when someone showing me their condo said they bought in 2000 for $75 k and it was such a great investment, they had doubled their money and offering it to me for $165k. I didn't help them double their money .

I want to buy a house from someone who tells me it was the worst investment they ever made! LOL

The OFHEO website has quarterly price index data for metro areas, including HSV. I downloaded the spreadsheet and saw an average 5-7% increase yoy for past several years. I think since 2000, the index is up like 60% for a home bought then.

[ionlife]

Well as soon as my crooked builder started a new subdivision across from another one--my builder had his at 500+--well that other subdivsion, they started posting signs that their houses start at 450K and that is DOWN from the 500+I saw a 8 months ago.

Just the facts, mam, just the facts...

[mm42]

The housing market has flattened out some here and the demand is soft, but there have not been price drops like in most other markets.

Here's a good graphic on the subject:



Unfortunately the moderators will not let me link to the excellent blog the information comes from.

[caution]

I'm just wondering, in general, about some of the same things (we're moving soon).

If a house is 225K, how much of that is fluff? Where I currently live, in NOVA, the market is never really soft, and there's not much wiggle room.

I do see many newer homes for rent in HSV, and that tells me they may have over-built some of the new subdivisions, for now.

[Elizabeth_G]

caution: I just figured the absorption rates (inventory rates, which means supply and demand) for both Huntsville and Madison. I used a price range of $200-250,000 for both areas. When choosing my locations in Huntsville, I simply used areas 3 and 4, which have been the most popular with my past RELO clients when moving here. Madison is area 5.

FYI when reading the figures: The National Association of Realtors considers 6 months or less a buyers market, and those figures hold true nationwide, typically.

For areas 3 and 4, the inventory rate is 6.49 months supply. (Just barely a buyers market).

For area 5, Madison City, the inventory rate is 4.55 months supply, making it a sellers market.

Of course, the inventory rate changes significantly in various price ranges. While some areas are over-built, I think you will find it is the upper end homes for the most part. I hope this helps!