2018 Was a record setting year in the Birmingham real estate market. Everyone who lives here has noticed the massive construction projects and rising home values. Pockets of the city have become quite competitive for buyers looking to purchase. These are all signs of a market that is continuing to heat up.
Here are some numbers to quantify this growth. I gathered all sold listings in our MLS from 2018 and compared those numbers to 2017.
Sample Data
2018
2017
Sold Listings
5.48%
20,050
19008
Highest Sale
N/A
4,000,000
4,800,000
Lowest Sale
N/A
1,000
750
Average Sale
5.12%
224,872
213,917
Median Sale
6.31%
187,000
175,900
Total Sales Value
10.88%
4,508,697,887
4,066,149,738
Average DOM
-17.14%
58
70
Median DOM
-32.26%
21
31
Upper 20%
5.08%
310,000
295,000
Lower 20%
8.25%
105,000
97,000
This is some broad analysis of the entire sample.
Breaking down this chart was the primary focus of the above Podcast/Video.
I would categorize this as a year of improvement. It’s not a white hot market, but it’s strong and growing.
Transaction Funding
2018
Count
Percentage
CONVENTIONAL
9461
47.19%
CASH
4833
24.10%
FHA
3344
16.68%
VA
1134
5.66%
RURAL DEVELOPMENT
558
2.78%
OTHER
347
1.73%
CONV-ADJ/VAR
286
1.43%
OWNER FINANCING
45
0.22%
FHA203 REHAB
39
0.19%
ASSUMPTION
2
0.01%
LEASED
1
0.00%
2017
Count
Percentage
CONVENTIONAL
8722
45.89%
CASH
4395
23.12%
FHA
3373
17.75%
VA
1096
5.77%
RURAL DEVELOPMENT
664
3.49%
OTHER
360
1.89%
CONV-ADJ/VAR
290
1.53%
FHA203 REHAB
55
0.29%
OWNER FINANCING
49
0.26%
ASSUMPTION
3
0.02%
LEASED
1
0.01%
Bubble’s are built by leverage. Anyone concerned we are in a bubble should examine the statistics around leverage in the real estate market.
Cash and Convention funding grew as a percentage. I found this interesting, as these are sources that usually require larger down payments.
FHA, VA, and USDA shrank as a percentage. These are our low down-payment options.
Without looking at the numbers I would’ve assumed the exact opposite of this trend.
It turns out consumers are trending towards less leverage.
Zip Codes
For this analysis, I only included zip codes that had at least 100 sales. These numbers are averages, and could be skewed by outlier inputs. Take them with a grain of salt. However, I do believe them to reflect general trends in our market.
Top 10 For Average Price Increase From 2017 to 2018
Zip Code
Percent Raise
Amount Raise
Ensley
35208
62.40%
16,220
Bessemer
35020
44.85%
24,803
Irondale
35210
19.02%
34,301
Homewood
35209
18.15%
61,212
East Lake
36206
18.15%
14,936
Mtn. Brook
35213
15.38%
74,349
Springville
35146
14.31%
28,666
Hoover
35244
12.63%
36,190
Anniston
36207
12.63%
18,037
Leeds
35094
12.53%
22,284
Some of these areas are obviously booming with price appreciation, but some are surprises.
The city is investing in Ensley heavily. They went from an average sale of 26k to 40k. I don’t think it means Ensley is the next Avondale, but it’s worth paying attention to.
East Lake is also somewhat of a surprise. Although I know a few fix-and-flip investors who consider it more of a secret. Here’s a stunning example in East Lake.
Bottom 10 For Average Price Increase From 2017 to 2018
Zip Code
Percent Raise
Amount Raise
West End
35211
-4.28%
-3,591
Anniston
36203
-4.06%
-6,406
Westover
35147
-3.41%
-7,333
Hoover Vestavia
35216
-2.69%
-7,751
Tarrant
35217
-1.55%
-901
Woodlawn
35212
-0.52%
-944
280 Area
35242
0.53%
2,050
Moody
35004
0.55%
979
Gardendale
35071
0.61%
1,211
Sylacauga
35150
0.86%
943
In any market there will be areas that are hot an areas that are not.
Some of these would have been in the top 10 in years past, but may have decelerated.
For cash-flow investors, these area’s may be opportunities. I’m buying one in West End next month.
I’d love to hear your thoughts on where the market is and where it’s going! Drop on comment on Facebook if you have some!
