A faster moving real estate market
For the first time in several years, “sold” signs are keeping up with “for sale” signs around the villages.
Residential real estate sales in Mountain Brook are up 34 percent year-over-year, according to a Birmingham Area MLS comparing sales from Jan. 1 to Oct. 16, 2012 to the same dates from 2013.
“The market is refreshingly active,” LAH Real Estate agent Dot Mash said. “For so many years, it was slow, but now we are having good activity in all price ranges.”
Wilmer Poynor of Ray & Poynor said Mountain Brook’s market is stronger than the surrounding areas. Within city limits there is an average of a 3.7-month supply of homes in Mountain Brook, meaning if all listings were to be frozen it would take 3.7 months to sell them at the current rate. That compares to an eight-month supply for the city of Birmingham.
The specifics of the market vary by neighborhood and the price range, according to Poynor.
“The bulk of the market is $1 million and under, and that segment of the market is very healthy,” he said. “For instance, we had a $400,000 home listed that had multiple showings and multiple offers in one day.”
However, the $2 million plus segment is a challenging market, according to Poynor. Last year from Jan. 1 to Oct. 16, only one home in this range was sold. This year during the same time, five homes have been sold.
Overall, though, Mountain Brook is healthy, Millie Osborn of RealtySouth emphasized. As of Oct. 16, 302 residential real estate transactions closed this year with homes selling within 96 percent of list price. As of the same date, 122 homes were on the market with 17 of those under contract. Home prices range from $257,000 to $3.9 million.
“With the home inventory down, the housing market has been much better to the seller this year,” Osborn said. “If a home is priced competitively, it has a greater chance of being sold rather quickly. If a home has been on the market for a while, it is possible the seller bought in the upturn, paying a higher price and now cannot price the home well.”
To flesh out what this market means for buyers and sellers, Village Living talked with Dot Mash of LAH Real Estate, Millie Osborn of RealtySouth and Wilmer Poynor of Ray & Poyner — all panelists for the Chamber of Commerce’s luncheon this month.
How has the market gotten to this point following the buyers’ market that reigned for the past several years?
Dot Mash: Part of it is due to pent-up demand from buyers not participating due to financial uncertainty. This generation buys on credit because they do not want to wait for the things they want. Now that buyers have had to wait for several years, a lot of them have had more children and are still living in the same house as before. They could not sell their house if no one was buying, but now they can afford more expensive houses; that allows people to come into lower-priced houses. People are wanting to buy before the rates go up.
Millie Osborn: Consumer confidence has led to low interest rates, making it more beneficial for many to buy in lieu of renting. As inventory has gotten lower, demand has increased.
Wilmer Poynor: In part, we have an unbelievable school system that helps drive our market. That never went away, but it has helped us bounce back.
How do you see the market changing over the upcoming months and year?
WP: I’m optimistic that we are going to continue to improve, but it’s hard to predict.
MO: Buyers, sellers and Realtors look forward to a promising year. However, the success of the upcoming year will depend on the status of interest rates, job security and fallout from the government shutdown.
DM: If the economy holds, the real estate should remain steady, but who knows if the economy is going to hold. I don’t think it will be a boom like we saw several years ago.
What is important for buyers to know now?
MO: In today’s market if buyers see a home that fits their needs and it is priced competitively, they should not hesitate to make an offer. The buyer should rely on the knowledge and expertise of their chosen Realtor. We are now seeing multiple offers on homes, something we have not seen in a few years. The offers on homes are more relative to asking price.
DM: The market is not a market to make low offers to a seller. Buyers are still seeing some TV programs about giving low offers to sellers, but in the Mountain Brook market, that’s not working. Activity is such that the sellers are not considering low offers. They can wait for a better offer.
WP: In Mountain Brook, the vast majority of market are “used” homes. You are not buying a new product. The condition of a 70 or 80-year-old home may not be up to today’s home standards, but there may be nothing wrong with it. You have to understand you are not buying a brand-new perfect home. You are going to have to work on home maintenance, and that costs a lot of money.
Buyers also need to be prepared when they make their offer and have their financing lined up before they start looking so that when it’s time to make an offer, they know what they are going to do.
What is most important for sellers to know now?
WP: Pricing, presentation and condition are extremely important when putting your home on the market. You need these things regardless of your price range and how active it is. If you don’t have those things, you are going to have a tough time selling your house.
DM: They should consider the list price suggested by their agent. A lot of times they will go off an appraisal from three months ago, but it may not reflect the current value. The market changes daily, and we have that information. Sellers only have one opportunity to make a good impression to a buyer. Agents know what a house needs to look like to look appealing, and they [sellers] need to do what they suggest.
If a property is priced right and in good condition, it will be gone within a day or so of going on the market. You can’t always sleep on it.
MO: Price your home competitively, but don’t price your home out of market. Listen to your Realtor, as first showings are important. Sellers need to put on a buyer’s hat and look at their home through buyer’s eyes.
Chamber of Commerce Luncheon
What to know about the current real estate market in Mountain Brook
Panel moderated by Mike Royer of Alabama’s 13
Nov. 14, 11 a.m.
Park Lane, English Village
$25 members, $30 nonmembers