Birmingham Housing Market Shows Modest Gains
The number of homes for sale in the the Birmingham housing market has skyrocketed over the past two years, but unlike many markets across the country, the number of homes sold has also climbed - albeit slightly.
According to statistics from the Alabama Real Estate Research and Education Center, 13,183 homes were on the market in May, a drastic increase from the 9,771 homes on the market in May 2006 and 7,195 homes in May 2005.
Over the past 24 months, the number of homes for sale in the Birmingham area has increased by 83 percent. However, the number of homes sold in May was up only 19 percent, as Alabama mortgage borrowers were remaining on the sidelines.
Experts say that is one sign that points to the area shifting to more of a buyer’s market than in the past.
Another sign is the average number of days a home will sit on the housing market, which has topped 100 days every month of 2007 after only hitting that mark 10 times since 2000 - usually in the slow first three months of the year.
Those factors have had a variety of factors on homebuilders and real estate agents.
Jeff Thompson, founder and president of Thompson Contracting & Investments Inc., said the market has forced many builders to reduce prices or slow down their building plans until they can reduce their inventory.
That has been an effect of the market itself, as well as the number of foreclosures that likely resulted from bad credit home loans, he said.
“We have to get the inventory out of there,” Thompson said. “A lot of builders are reducing their prices so they can continue to have the cash flows.”
One strategy, he said, has been to concentrate on the price points that have been successful. Thompson said his company has shifted its focus to the $180,000 to $250,000 price range where more customers are looking for products.
Median home prices in the Birmingham metro area have remained constant over the past two years - hovering between $150,000 and $170,000 almost every month since May 2004. Real estate experts say those constant prices, as opposed to the drastic decreases that have plagued other areas, represent good news for the local market.
Chris Wood, the owner and mortgage broker for Century 21 Alliance Group, said Birmingham is in the midst of a buyer’s market.
Wood said the entire state has stayed above the problems that have permeated other regions of the country, particularly the Florida and California housing markets.
“Compared to the rest of the country, we’ve got to be up there toward the top,” he said.
According to the National Association of Realtors, existing home sales nationally are down 10.3 percent from May 2006 to May 2007, while new home sales are down 15.8 percent over the same period of time.
On a state level, existing home sales are up by a fraction of a percentage point from May 2006 to May 2007 while total homes for sale are up 13 percent.