Birmingham Market Update
- Sales up 3.37% year over year. This is a change up from the last few months trend of lower YoY sales volume.
- Avg. Sale Price is up 5.29% a strong increase, but not as high as we’ve been seeing this Summer.
- Days on Market may be leveling off. A much smaller decrease than we’ve been seeing in months past.
The Real Estate Recovery In Two Markets
I’ve noticed the market for rental properties has been much more competitive this year. Prices seem to keep going up. The only way to confirm what I’ve been noticing was to put it into context via the historical data.
I created two baskets of data. One for zip codes containing a large number of rental properties. And one for zip codes that are primarily owner occupied, containing very few rental properties
Here’s the data for the rental basket
Key Takeaways
- A massive 77.03% price increase since 2013.
- 2019 Year-to-date price increase seems to be the strongest year yet.
- This confirms what I’ve seen in the market. It’s picked up significantly this year.
- Days on market, and expired listings have also dried up significantly year to date.
Owner Occupied Areas
Key Takeaways
- Much smaller price increase over the time period. Only 26.12%
- Current avg. sale price of 400k+ puts these area’s in the top 20% of values in our market.
- Expired listing are almost completely disappeared.
Comparison
- Surprisingly the rental area’s have appreciated at a much stronger rate than owner occupied areas.
- A couple issues could be driving this
- Values in rental area’s were damaged much more than retail area’s in the financial crisis. Leaving lots of room for recovery.
- More lenient lending standards. There’s no question availability of financing raises prices. As lending standards relaxed from their post crisis levels, and financing came back into these areas, It acted as an accelerator of price appreciation. Higher end area’s may have less sensitivity to the lending environment.
- By measures of market competitiveness, these area’s still have a long way to go to catch up with the owner occupied zip codes. There’s room for improvement in measures of market health.
- Despite large price increases over the last few years, I don’t believe these area’s are overheated. They are still highly affordable, the numbers still work as investment properties, and there is nowhere near the debt load we had pre-crisis.
What do you think? Comment on Facebook, I’d love to hear your thoughts!
You must be logged in to post a comment.