Huntsville Alabama was just ranked Alabama’s most affordable residential real estate market by Coldwell Banker’s 2007 Home Price Comparison Index. Coldwell Banker compares 2,200 sq ft four bedroom homes in 317 different cities.
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Despite the widespread slowdown in the housing market, which is taking a toll on Realtor numbers nationally, numbers are up in most of Alabama.
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In some places, the bad credit mortgage storm bypasses an area’s prosperity.
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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.
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Darlene Hill was making a living in Mobile, Ala., as a real estate investor when she devised a sophisticated con against lenders across the Alabama housing market that would net her far more money than just robbing a teller with a gun.
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The number of homes on the tri-county market of Alabama has gone up more than 30 percent, but so far, the home prices aren’t going down.
According to the Montgomery Advertiser, the Montgomery area, which includes Montgomery, Elmore, Autauga and Lowndes counties, has 669 more homes for sale than it did a year ago and the homes are taking longer to sell.
The Alabama housing market as a whole, and in Tuscaloosa County, both improved in February compared with the first month of the year, and it is also doing better than a year ago, the Tuscaloosa News reports.
Existing home sales in Alabama totaled 4,069 in February, a 14.7 percent jump compared to January’s total of 3,547, according to the University of Alabama’s Real Estate Research and Education Center.
The average selling price of $155,632 in February was 3.3 percent higher than in January, the center reported.
Statewide, fewer homes sold in February this year than in February 2006 and more homes were listed. But the average selling price was higher and the average number of days that homes were on the market was down.
In Tuscaloosa County, existing home sales in February totaled 168, well above the 128 sold in January, and the number of days on market was also down, from 139 to 135.
But even as Alabama home loan rates remained low, 1,689 homes were listed, 58 more than in January, and the average selling price was $165,863, a drop of about $6,000.
In February 2006, existing home sales in Tuscaloosa County totaled 151 units, the selling price averaged $168,387 and 1,358 homes were on the market for 140 days on average. The Birmingham housing market has been equally steaedy.
Although the indicators were mixed, if the market continues at this rate, this year should be as good as, or better than, last year for the Alabama mortgage market, according to the center.
Housing starts, which usually indicate future market activity, increased by a solid 9 percent in February to reach 1.525 million units, boosting the confidence of financial markets embroiled in bad credit mortgage turmoil.
National housing starts are, however, 28 percent lower than a year ago.
SOURCE: Tuscaloosa News
Sales of new homes and Alabama home loan in metropolitan Birmingham rose in February from the previous month, continuing to buck a national trend.
The Greater Birmingham Association of Home Builders says its members sold 384 new homes last month, compared to 367 in January. That’s a 4.6 percent increase.
February’s area new home sales, as compiled by the Rudolph/Brander Monthly Birmingham Area Real Estate Report, were down from the 423 sold in February 2006.
Still, the local builders association said it was pleased that February’s figure outpaced January’s number, considering the turmoil in the home mortgage and housing markets nationally.
The U.S. Commerce Department reported this week that sales of new single-family homes across the nation fell 3.9 percent in February to the slowest pace in nearly seven years.
The decline doused hopes that a rebound was in the making for the nation’s housing market, even as mortgage rates remain near historic lows.
Garth Day, director of the Greater Birmingham Association of Home Builders, said it is not surprising to see the metro area real estate market holding up while many other cities across the country are experiencing declines in new and existing homes sales.
“Despite the slowdown in the national housing industry over the last year and a half, home sales have continued to be strong in Birmingham month after month,” Day said. “We expect that to continue - in fact Birmingham is poised for a very good year in home sales.”
Day points to Alabama’s strong economy and unemployment rates at historic lows as reasons the Birmingham housing market should remain robust.
Sales of new and existing homes are monitored as a key economic indicator, and combined with low Alabama mortgage costs, the area continues to thrive as other overvalued markets falter.
SOURCE: Birmingham News
To the outside observer, the Alabama housing market may appear to have an uncanny knack for bucking national trends - at least bad ones - in recent years.
The Tuscaloosa News observes that even as speculative buying drove prices in Florida and California to precarious levels, Alabama real estate was, for the most part, uncontaminated.
When stagnant home prices and rocketing inventory hit the national market, Alabama ended 2006 on a very strong note, on top of four years of record-breaking sales.
Now, judging from the opinions of local experts, it might be time to add the growing bad credit mortgage fiasco to the list of bullets dodged.
“I just don’t think it’s going to have as big an impact on the [Alabama] housing sector as it would in other parts of the country,” said Leonard Zumpano, professor of finance at the University of Alabama and former director of the Alabama Real Estate Research and Education Center.
According to a recent report issued by the Mortgage Bankers Association, more than one out of every 200 mortgages were in the beginning stages of foreclosure during the last quarter of 2006.
Fueling the crisis are subprime mortgages - high interest home loans given to people with less than perfect credit. Subprime loans can be profitable but risky investments for mortgage lenders, who must contend with higher rates of default and delinquency.
Lenders were not afraid to issue such loans as long as the housing market was booming, because troubled borrowers could refinance a mortgage easily. But stagnating prices have left many of these borrowers in default, and at least 20 subprime lenders have gone out of business.
While not totally immune, Alabama does seem to be avoiding the worst of it. The reason is a strong economy that keeps personal incomes competitive in relation to housing costs, Zumpano said.
“You’ve got a strong market in Tuscaloosa because of growth in employment,” he said. “You’ve got the same thing in the Huntsville market, the same thing in Montgomery with Hyundai and Mobile is looking to expand.”
The result is that fewer borrowers have to resort to bad credit mortgages and other forms of creative financing to purchase a home.
The only potential fallout Zumpano and others see for the Alabama mortgage market is a decrease in the availability of loans to people with marginal credit ratings as lenders across the country tighten their underwriting criteria. Fewer loans means fewer homes sold.
While this could prove troublesome for those parts of the country with weak housing markets, Zumpano anticipates new standards will have only a slight impact on the strong Alabama mortgage market.
In the meantime, there are simple precautions any perspective home buyer can take to protect themselves, no matter their credit score.
Most people know to check mortgage rates and closing costs when shopping for mortgages, but other important factors often slip by unnoticed.
Key among these is private mortgage insurance, homeowner’s insurance, real estate taxes and possible penalties assessed on mortgage prepayments.
As a general rule, mortgage insurance is a percentage of the total loan paid each month as insurance on loans with a less than 20 percent down payment. PMI for a normal home loan is about 0.0078 percent, while subprime mortgages have rates as high as 2-3 percent.
Subprimes also typically have high prepayment penalties; fees charged if the home loan is paid off before a certain period of time, usually a couple years, has passed. This can make it difficult for struggling borrowers to refinance.
Though it all sounds rather frightening, the tanking subprime market should not be a reason for Alabamians with good credit to put off buying a house.
“Frankly this is a time I would be looking for a house,” Zumpano said. “I think a buyer with a motivated seller could work out a very good deal.”
SOURCE: Tuscaloosa News
A new report shows the Alabama housing market suffered through decreased existing homes sales in 2006, but an uptick in December gave hope that the future would be stable.
Meanwhile, Birmingham home sales increased for both the month and the year, according to data compiled by the Alabama Real Estate Research and Education Center at the University of Alabama.
Statewide, 4,457 units were sold in December - an increase of 5.3 percent over November. For the year 59,222 existing homes were sold, compared to 59,922 in 2005. The slight drop was a signal that home purchase loan borrowers in the state are waiting for prices to fall.
As it stood in December, the average selling price for a house in the state was $154,417, down more than $8,000 from $162,706 in November. Overall in 2006, however, the average selling price increased to $156,370, compared to $148,184 in 2005.
As Alabama mortgage seekers hope the late year trend continues and affordability becomes more realistic, sales across the region ought to pick up.