Photo by Erin Nelson Sweeney.
Margi Ingram, founder of Ingram and Associates, talks about the molding during a walkthrough of a condo in English Village.
Might as well start with the bad news. Nationwide in 2023, home sales numbers were the lowest in almost 30 years.
Existing home sales slid nearly 20% from the prior year (which wasn’t that great, either), according to the National Association of Realtors. Statewide, Alabama racked up just over $2 billion in total home sales in 2022, and that number dropped by a billion in 2023.
That brings us to Mountain Brook, which averaged a 19% drop in sales volume last year. Clearly, interest rates are a major culprit, though other factors were in play.
“There are Mountain Brook homeowners who have rates as low as the high 2 percents,” said Wilmer Poynor, president and owner of Ray & Poynor Properties, “and there are plenty more locked into the 3 and the 4 percents, so for them to relinquish that for any reason and get a mortgage rate much higher is an issue.”
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Deja vu all over again
It’s no secret that low inventory drives prices up, and 2023 was a prime example of that in Mountain Brook, just as it was in 2022.
This past year saw a single family home in Mountain Brook go over the $6 million mark, and others have sold in the $4-plus million range, something almost unfathomable a few years ago. Poynor said high interest rates and ongoing low inventory have been challenges for the market even as demand drove prices upward.
“So yes, you are seeing very competitive market conditions, and this gets tricky when you start talking about Mountain Brook because you have affluent people who are in a position to act in a way as to be real competitive, which means some properties will sell for very high amounts,” Poynor said.
Margi Ingram, of real estate marketing firm Ingram Associates, agreed: “In the early stages of 2024, it seems that the real estate market in Mountain Brook has taken up where 2023 left off, with low inventory and increased prices. For every home that comes on the market, there are several buyers trying to buy. More demand than supply is still the story today.”
Seventeen homes sold in December 2023, down from 34 last year. According to Mountain Brook city building official Glen Merchant, there were 28 new homes permitted for 2023, out of 84 total construction permits.
On average, homes in Mountain Brook in the last two years have stayed on the market for 20 days, which is way below the state and national average. Due to low inventory, the time from contract to closing has significantly reduced in the last few years, from over 100 days to within a month.
“It’s wild,” Poynor said. “Now, these deals close in a week or two. If you are working with a mortgage company, they need to be ready. Otherwise, you are going to lose out to someone who has cash. We even see buyers letting the seller stay for periods of time after closing. That’s definitely changed.”
Technology has changed the game, too.
“We used to have to go to an agency to pick up a key to the house, and then take it back. Next, we had to write up a contract, give the offer and then drive back and forth to discuss. Today, we have DocuSign and may never even see the other agent,” Poynor said.
Resilience
As interest rates stabilize and look toward a possible decline, Pynor said home buyers and sellers in Mountain Brook are coming to terms with the new market.
“The word I’m going to use about this community is resilient,” he said. “So, if I’m going to buy a new home, the new reality is 6 or 7% interest, and historically this rate is not nearly as high as it’s been at times. So, in Mountain Brook, they are finding a way to buy.”
Stephen Dorsky, of Day Star Construction, Inc., also used the word “resilience” to describe Mountain Brook.
“I would not say any community is recession-proof, but Mountain Brook and nearby areas have resilience when facing challenging financial times,” he said.
Dorsky started Day Star in 1983 and has continued his home construction and renovation business through several economic downturns. Day Star survived the 2008 real estate bust and the COVID-19 pandemic.
“Right now is a great time for us,” Dorsky said. “Our biggest challenge is to attend to the calls and current projects we have ongoing. Building materials are still very high, but I do not see that genie going back in the bottle. Overall, I anticipate our business to remain at least stable, if not slightly increasing in 2024.”
Poynor said the community of Mountain Brook itself is what keeps its real estate market strong through all the changes in the market.
“This community is phenomenal. When someone says, ‘I want to move out of Mountain Brook because I can pay less taxes,’ I wonder: What happens when you move away from our police protection, our fire department and paramedics? Not to mention our school system and sidewalks and villages. Not me,” Poynor said.
