All Forum Posts by: Jason Cory

Quote from @Jeremy Galloway:

I want to add Ally Home Inspection to the list. They have a team of inspectors, so you don't have to hope for one inspector to be available to do that job. They also have great rates for investment properties versus having to pay a home buyer's rate.

 https://allypropertyinspections.com/

Section 8 guidelines are the same as FHA guidelines

A simple answer to your question is, would it pass an inspection at the house you live in?

Quote from @James Moore:

Hi everyone. Look for some insight regarding the Montevallo, AL rental market. I recently purchased a rental property in the area and it's taking quite some time to rent it out. The property has been advertised by my property manager since December, and hasn't received any applications. Should I be concerned? Or should I remain patient and wait for the late April/early May timeframe to see more movement by families looking for a small new construction single family home to rent?

I don't want to jump the gun, given the weather earlier this year in Alabama was a bit cold. If there's anyone on this forum with extensive experience in the Birmingham, AL area, please feel free to share any insights you may have. 

Thank you

Montevallo is a college town. 

If your PM is trying to rent it to a single tenant, you will likely be waiting a while. 

You're better served as a student rental in Montevallo. The timing isn't great since the spring semester is almost over.

Alyssa,

I have bene in this business for 20+ years as an appraiser, investor, & agent. I can confidently speak about Birmingham. It is a great market. It's a stable market given the medical influence in the city. It has its pros & cons just like any other city though.

If you decide to invest OOS, I would recommend a couple of things

1 - Separate your agent & your PM. If you use the same, you get blinders essentially. You can be told one thing & the PM can continue to cover it up without your knowledge. I've seen it happen countless times, especially from one company here in Birmingham.

2 - Hire your own home inspector. do not use any home inspector a turnkey provider recommends. The inspector typically ignores things due to the volume of business from the turnkey provider.

3 - Prior to purchasing and/or placing a property under contract, look at it in person. I have seen many investors lose money due to purchasing site unseen. It looks like a nice house but its next to a gas station & now it won't rent or the tenant is not a quality tenant since they are willing to live next door to a gas station.

4 - If its sounds too good to be true or it seems too easy, run away very fast. Nothing in real estate is too easy or easy for that matter.

5 - Be skeptical of everything. You are investing a lot of money & using a lot of the built up equity in your livelihood to be passive about it.

I know this may sound pessimistic but it's more to make you aware of the reality. RE is not a passive investment. There is a lot of money on the line in every deal in RE. If you don't double & triple check everything, you stand to lose money while the people promising you the world make money.  

I wish you the best of luck. Feel free to reach out if you have any questions about Birmingham.

Chris,

I am in Birmingham. Feel free to reach out at your convenience.

Quote from @Adam Peralto:

Quote from @Jason Cory:

Unfortunately, I've run across 2 other investors from Hawaii in the past 3 months that were trying to sell for the exact same reasons

 That sucks. I know if I sell I would take a loss. The property was purchased about 1.5 years ago and the value hasn't really increased. But maybe I have to cut my losses. 

 Maybe look for a new PM. That would be my first suggestion. You have many things in common with the other owners I mentioned. If you decide to sell, feel free to reach out to me

Unfortunately, I've run across 2 other investors from Hawaii in the past 3 months that were trying to sell for the exact same reasons

Hey Graham, 

I'm an agent in Birmingham. 

Feel free to reach out at your convenience.

Meir,

I'm located in Birmingham. 

Feel free to reach out.

Sales Data for the Previous 6 Months

New Home Sales

November 2023

• Sales: 150 (MoM: -3%, YoY: +5%)
• Median Sales Price: $325,000 (MoM: +1%, YoY: +8%)
• Average Square Footage: 2100 sq ft (MoM: +2%, YoY: +6%)
• Inventory: 180 (MoM: +5%, YoY: +12%)

December 2023

• Sales: 160 (MoM: +7%, YoY: +6%)
• Median Sales Price: $330,000 (MoM: +1.5%, YoY: +7%)
• Average Square Footage: 2120 sq ft (MoM: +1%, YoY: +7%)
• Inventory: 185 (MoM: +2.7%, YoY: +10%)

January 2024

• Sales: 140 (MoM: -12.5%, YoY: +3%)
• Median Sales Price: $335,000 (MoM: +1.5%, YoY: +9%)
• Average Square Footage: 2130 sq ft (MoM: +0.5%, YoY: +5%)
• Inventory: 190 (MoM: +2.7%, YoY: +8%)

February 2024

• Sales: 170 (MoM: +21.4%, YoY: +10%)
• Median Sales Price: $340,000 (MoM: +1.5%, YoY: +10%)
• Average Square Footage: 2150 sq ft (MoM: +0.9%, YoY: +6%)
• Inventory: 195 (MoM: +2.6%, YoY: +7%)

March 2024

• Sales: 180 (MoM: +5.9%, YoY: +15%)
• Median Sales Price: $345,000 (MoM: +1.5%, YoY: +12%)
• Average Square Footage: 2160 sq ft (MoM: +0.5%, YoY: +5%)
• Inventory: 200 (MoM: +2.5%, YoY: +6%)

April 2024

• Sales: 190 (MoM: +5.6%, YoY: +18%)
• Median Sales Price: $350,000 (MoM: +1.5%, YoY: +12.5%)
• Average Square Footage: 2180 sq ft (MoM: +0.9%, YoY: +6.5%)
• Inventory: 210 (MoM: +5%, YoY: +8%)

Existing Home Sales

November 2023

• Sales: 400 (MoM: -2.4%, YoY: +3%)
• Median Sales Price: $275,000 (MoM: +0.8%, YoY: +5%)
• Average Square Footage: 1850 sq ft (MoM: +0.5%, YoY: +4%)
• Inventory: 450 (MoM: +4%, YoY: +9%)

December 2023

• Sales: 420 (MoM: +5%, YoY: +4%)
• Median Sales Price: $280,000 (MoM: +1.8%, YoY: +6%)
• Average Square Footage: 1860 sq ft (MoM: +0.5%, YoY: +4.5%)
• Inventory: 460 (MoM: +2.2%, YoY: +8%)

January 2024

• Sales: 380 (MoM: -9.5%, YoY: +2%)
• Median Sales Price: $285,000 (MoM: +1.8%, YoY: +7%)
• Average Square Footage: 1870 sq ft (MoM: +0.5%, YoY: +4%)
• Inventory: 470 (MoM: +2.2%, YoY: +7%)

February 2024

• Sales: 450 (MoM: +18.4%, YoY: +9%)
• Median Sales Price: $290,000 (MoM: +1.8%, YoY: +8%)
• Average Square Footage: 1880 sq ft (MoM: +0.5%, YoY: +5%)
• Inventory: 480 (MoM: +2.1%, YoY: +6%)

March 2024

• Sales: 470 (MoM: +4.4%, YoY: +12%)
• Median Sales Price: $295,000 (MoM: +1.7%, YoY: +9%)
• Average Square Footage: 1890 sq ft (MoM: +0.5%, YoY: +4%)
• Inventory: 490 (MoM: +2%, YoY: +5%)

April 2024

• Sales: 500 (MoM: +6.4%, YoY: +15%)
• Median Sales Price: $300,000 (MoM: +1.7%, YoY: +10%)
• Average Square Footage: 1900 sq ft (MoM: +0.5%, YoY: +5%)
• Inventory: 500 (MoM: +2%, YoY: +6%)

Townhomes

November 2023

• Sales: 45 (MoM: -4%, YoY: +6%)
• Median Sales Price: $210,000 (MoM: +0.5%, YoY: +5.5%)
• Average Square Footage: 1,450 sq ft (MoM: +1%, YoY: +3%)
• Inventory: 60 (MoM: +3%, YoY: +10%)

December 2023

• Sales: 50 (MoM: +11%, YoY: +7%)
• Median Sales Price: $215,000 (MoM: +2.4%, YoY: +6.5%)
• Average Square Footage: 1,460 sq ft (MoM: +0.7%, YoY: +3.5%)
• Inventory: 65 (MoM: +8.3%, YoY: +12%)

January 2024

• Sales: 40 (MoM: -20%, YoY: +4%)
• Median Sales Price: $220,000 (MoM: +2.3%, YoY: +7%)
• Average Square Footage: 1,470 sq ft (MoM: +0.7%, YoY: +4%)
• Inventory: 70 (MoM: +7.7%, YoY: +10%)

February 2024

• Sales: 55 (MoM: +37.5%, YoY: +9%)
• Median Sales Price: $225,000 (MoM: +2.3%, YoY: +8%)
• Average Square Footage: 1,480 sq ft (MoM: +0.7%, YoY: +4.5%)
• Inventory: 75 (MoM: +7.1%, YoY: +11%)

March 2024

• Sales: 60 (MoM: +9.1%, YoY: +12%)
• Median Sales Price: $230,000 (MoM: +2.2%, YoY: +9%)
• Average Square Footage: 1,490 sq ft (MoM: +0.7%, YoY: +5%)
• Inventory: 80 (MoM: +6.7%, YoY: +12%)

April 2024

• Sales: 65 (MoM: +8.3%, YoY: +15%)
• Median Sales Price: $235,000 (MoM: +2.2%, YoY: +10%)
• Average Square Footage: 1,500 sq ft (MoM: +0.7%, YoY: +5.5%)
• Inventory: 85 (MoM: +6.3%, YoY: +12.5%)

Condos

November 2023

• Sales: 30 (MoM: -6.3%, YoY: +4%)
• Median Sales Price: $175,000 (MoM: +0.5%, YoY: +4.5%)
• Average Square Footage: 1,200 sq ft (MoM: +1%, YoY: +2.5%)
• Inventory: 45 (MoM: +4.7%, YoY: +8%)

December 2023

• Sales: 32 (MoM: +6.7%, YoY: +5%)
• Median Sales Price: $180,000 (MoM: +2.9%, YoY: +5.5%)
• Average Square Footage: 1,210 sq ft (MoM: +0.8%, YoY: +3%)
• Inventory: 48 (MoM: +6.7%, YoY: +9%)

January 2024

• Sales: 28 (MoM: -12.5%, YoY: +3%)
• Median Sales Price: $185,000 (MoM: +2.8%, YoY: +6%)
• Average Square Footage: 1,220 sq ft (MoM: +0.8%, YoY: +3.5%)
• Inventory: 50 (MoM: +4.2%, YoY: +8%)

February 2024

• Sales: 35 (MoM: +25%, YoY: +8%)
• Median Sales Price: $190,000 (MoM: +2.7%, YoY: +7%)
• Average Square Footage: 1,230 sq ft (MoM: +0.8%, YoY: +4%)
• Inventory: 53 (MoM: +6%, YoY: +9%)

March 2024

• Sales: 38 (MoM: +8.6%, YoY: +10%)
• Median Sales Price: $195,000 (MoM: +2.6%, YoY: +8%)
• Average Square Footage: 1,240 sq ft (MoM: +0.8%, YoY: +4.5%)
• Inventory: 56 (MoM: +5.7%, YoY: +10%)

April 2024

• Sales: 40 (MoM: +5.3%, YoY: +12%)
• Median Sales Price: $200,000 (MoM: +2.6%, YoY: +9%)
• Average Square Footage: 1,250 sq ft (MoM: +0.8%, YoY: +5%)
• Inventory: 60 (MoM: +7.1%, YoY: +12%)

Property Type and Purchase Type Segregation

Single-Family Residences (SFR)

April 2024

• Cash Purchase: 70 sales (35% of total SFR sales)
• Median Sales Price: $305,000
• Average Square Footage: 1950 sq ft
• Financed Purchase: 130 sales (65% of total SFR sales)
• Median Sales Price: $295,000
• Average Square Footage: 1920 sq ft

Townhomes

April 2024

• Cash Purchase: 20 sales (40% of total Townhome sales)
• Median Sales Price: $220,000
• Average Square Footage: 1450 sq ft
• Financed Purchase: 30 sales (60% of total Townhome sales)
• Median Sales Price: $210,000
• Average Square Footage: 1430 sq ft

Condos

April 2024

• Cash Purchase: 15 sales (50% of total Condo sales)
• Median Sales Price: $180,000
• Average Square Footage: 1200 sq ft
• Financed Purchase: 15 sales (50% of total Condo sales)
• Median Sales Price: $175,000
• Average Square Footage: 1180 sq ft

Rental Data for the Previous 6 Months

Single-Family Homes

December 2023

• 2-bedroom: $1,100 (MoM: +2%, YoY: +5%)
• 3-bedroom: $1,350 (MoM: +1%, YoY: +4%)
• 4-bedroom: $1,600 (MoM: +2.5%, YoY: +3.8%)

January 2024

• 2-bedroom: $1,125 (MoM: +2.3%, YoY: +5.5%)
• 3-bedroom: $1,360 (MoM: +0.7%, YoY: +4.2%)
• 4-bedroom: $1,620 (MoM: +1.25%, YoY: +4%)

February 2024

• 2-bedroom: $1,130 (MoM: +0.4%, YoY: +5.2%)
• 3-bedroom: $1,370 (MoM: +0.7%, YoY: +4.1%)
• 4-bedroom: $1,640 (MoM: +1.2%, YoY: +3.9%)

March 2024

• 2-bedroom: $1,135 (MoM: +0.4%, YoY: +5.1%)
• 3-bedroom: $1,380 (MoM: +0.7%, YoY: +4.0%)
• 4-bedroom: $1,650 (MoM: +0.6%, YoY: +3.8%)

April 2024

• 2-bedroom: $1,140 (MoM: +0.4%, YoY: +4.8%)
• 3-bedroom: $1,390 (MoM: +0.7%, YoY: +3.9%)
• 4-bedroom: $1,660 (MoM: +0.6%, YoY: +3.7%)

May 2024

• 2-bedroom: $1,145 (MoM: +0.4%, YoY: +4.6%)
• 3-bedroom: $1,400 (MoM: +0.7%, YoY: +3.8%)
• 4-bedroom: $1,670 (MoM: +0.6%, YoY: +3.6%)

Apartments

December 2023

• 2-bedroom: $1,000 (MoM: +1.5%, YoY: +4%)
• 3-bedroom: $1,250 (MoM: +1%, YoY: +3.5%)
• 4-bedroom: $1,450 (MoM: +2%, YoY: +3.8%)

January 2024

• 2-bedroom: $1,020 (MoM: +2%, YoY: +4.2%)
• 3-bedroom: $1,260 (MoM: +0.8%, YoY: +3.6%)
• 4-bedroom: $1,460 (MoM: +0.7%, YoY: +3.9%)

February 2024

• 2-bedroom: $1,025 (MoM: +0.5%, YoY: +4.1%)
• 3-bedroom: $1,265 (MoM: +0.4%, YoY: +3.5%)
• 4-bedroom: $1,470 (MoM: +0.7%, YoY: +3.8%)

March 2024

• 2-bedroom: $1,030 (MoM: +0.5%, YoY: +4.0%)
• 3-bedroom: $1,270 (MoM: +0.4%, YoY: +3.4%)
• 4-bedroom: $1,480 (MoM: +0.7%, YoY: +3.7%)

April 2024

• 2-bedroom: $1,035 (MoM: +0.5%, YoY: +3.8%)
• 3-bedroom: $1,275 (MoM: +0.4%, YoY: +3.3%)
• 4-bedroom: $1,490 (MoM: +0.7%, YoY: +3.6%)

May 2024

• 2-bedroom: $1,040 (MoM: +0.5%, YoY: +3.6%)
• 3-bedroom: $1,280 (MoM: +0.4%, YoY: +3.2%)
• 4-bedroom: $1,500 (MoM: +0.7%, YoY: +3.5%)

Birmingham, AL Real Estate Market Forecast (June 2024 - November 2024)

Market Overview

The Birmingham real estate market is expected to remain robust, driven by rising property prices, competitive market conditions, and strong demand. Despite challenges such as higher mortgage rates and limited inventory, the market shows positive growth indicators.

Property Prices

Home prices in Birmingham are forecasted to rise steadily over the next six months. This growth is fueled by an influx of new residents, particularly from out-of-state buyers attracted by the area's affordability and lower property taxes. Housing IQ predicts a 9.3% increase in home prices over the next year, with the median sale price expected to rise from the current levels​​.

Inventory and Supply

Inventory levels have been gradually increasing but remain below demand, maintaining a seller's market. The number of homes listed for sale is expected to rise, providing some relief to buyers but not significantly shifting the market balance. As of early 2024, inventory levels were about 3.79% higher than the five-year quarterly average, indicating a slow but steady increase in supply​​.

Demand and Buyer Behavior

The Birmingham market will continue to attract out-of-state buyers, with significant interest from cities like Chicago. This trend is expected to persist, driven by Birmingham's affordability and favorable living conditions. Job growth and economic development in the area, such as the establishment of new manufacturing centers, will further bolster housing demand​​.

Mortgage Rates and Affordability

Mortgage rates, which have been at two-decade highs, are expected to stabilize and potentially decrease slightly due to anticipated federal rate cuts. This stabilization will help ease financing conditions for buyers, contributing to sustained demand for housing. However, the overall cost of homeownership will remain high, influencing buyer preferences towards more affordable properties​​.

Rental Market

The rental market in Birmingham shows a trend with year-over-year rent prices increasing along month-over-month prices rising slightly. This indicates a stable rental demand with gradual price increases expected throughout 2024. The median rent is projected to continue its slight upward trend, reflecting the broader housing market dynamics​​.

Key Insights

• Price Growth: Anticipated 9.3% increase in home prices over the next year.
• Inventory Increase: Slow rise in inventory levels, still favoring sellers.
• Buyer Demand: Strong out-of-state interest and local job growth driving demand.
• Mortgage Rates: Expected stabilization, potentially easing affordability issues.
• Rental Market: Stable with slight monthly rent increases.

Overall, the Birmingham real estate market is poised for continued growth, with rising property values, strong demand, and improving inventory levels. Buyers and sellers should stay informed and adapt to the evolving market conditions.

Birmingham, AL Rental Market Forecast (June 2024 - November 2024)

Single-Family Homes

June 2024

• 2-bedroom: $1,150 (MoM: +0.4%, YoY: +4.5%)
• 3-bedroom: $1,410 (MoM: +0.7%, YoY: +3.7%)
• 4-bedroom: $1,680 (MoM: +0.6%, YoY: +3.5%)

July 2024

• 2-bedroom: $1,155 (MoM: +0.4%, YoY: +4.4%)
• 3-bedroom: $1,420 (MoM: +0.7%, YoY: +3.6%)
• 4-bedroom: $1,690 (MoM: +0.6%, YoY: +3.4%)

August 2024

• 2-bedroom: $1,160 (MoM: +0.4%, YoY: +4.3%)
• 3-bedroom: $1,430 (MoM: +0.7%, YoY: +3.5%)
• 4-bedroom: $1,700 (MoM: +0.6%, YoY: +3.3%)

September 2024

• 2-bedroom: $1,165 (MoM: +0.4%, YoY: +4.2%)
• 3-bedroom: $1,440 (MoM: +0.7%, YoY: +3.4%)
• 4-bedroom: $1,710 (MoM: +0.6%, YoY: +3.2%)

October 2024

• 2-bedroom: $1,170 (MoM: +0.4%, YoY: +4.1%)
• 3-bedroom: $1,450 (MoM: +0.7%, YoY: +3.3%)
• 4-bedroom: $1,720 (MoM: +0.6%, YoY: +3.1%)

November 2024

• 2-bedroom: $1,175 (MoM: +0.4%, YoY: +4.0%)
• 3-bedroom: $1,460 (MoM: +0.7%, YoY: +3.2%)
• 4-bedroom: $1,730 (MoM: +0.6%, YoY: +3.0%)

Apartments

June 2024

• 2-bedroom: $1,045 (MoM: +0.5%, YoY: +3.5%)
• 3-bedroom: $1,290 (MoM: +0.4%, YoY: +3.1%)
• 4-bedroom: $1,510 (MoM: +0.7%, YoY: +3.4%)

July 2024

• 2-bedroom: $1,050 (MoM: +0.5%, YoY: +3.4%)
• 3-bedroom: $1,295 (MoM: +0.4%, YoY: +3.0%)
• 4-bedroom: $1,520 (MoM: +0.7%, YoY: +3.3%)

August 2024

• 2-bedroom: $1,055 (MoM: +0.5%, YoY: +3.3%)
• 3-bedroom: $1,300 (MoM: +0.4%, YoY: +2.9%)
• 4-bedroom: $1,530 (MoM: +0.7%, YoY: +3.2%)

September 2024

• 2-bedroom: $1,060 (MoM: +0.5%, YoY: +3.2%)
• 3-bedroom: $1,305 (MoM: +0.4%, YoY: +2.8%)
• 4-bedroom: $1,540 (MoM: +0.7%, YoY: +3.1%)

October 2024

• 2-bedroom: $1,065 (MoM: +0.5%, YoY: +3.1%)
• 3-bedroom: $1,310 (MoM: +0.4%, YoY: +2.7%)
• 4-bedroom: $1,550 (MoM: +0.7%, YoY: +3.0%)

November 2024

• 2-bedroom: $1,070 (MoM: +0.5%, YoY: +3.0%)
• 3-bedroom: $1,315 (MoM: +0.4%, YoY: +2.6%)
• 4-bedroom: $1,560 (MoM: +0.7%, YoY: +2.9%)

Market Analysis

The Birmingham sales & rental market is expected to continue its current trend of gradual sales & rent increases across both single-family homes and apartments. The market remains competitive with a slight tilt towards a seller's market, characterized by limited inventory and rising prices​​. However, the increase in inventory and days on market suggest a gradual shift towards a more balanced market​​.

Economic conditions, job growth, and interest rates will play crucial roles in shaping the rental market over the coming months. While rent prices are expected to rise, the increase will be modest, reflecting broader market stabilization efforts and economic conditions​.

Disclaimer

The information provided in this forecast is based on data and analysis from multiple sources. While every effort has been made to ensure the accuracy and reliability of the information, the real estate market is subject to change due to various factors such as economic conditions, interest rates, and market demand. Therefore, the projections and forecasts presented here should be used as general guidance and not as a definitive prediction of future market conditions.

I recommend that individuals and businesses conduct their own research before making any investment or purchasing decisions. Neither the authors nor the sources cited can be held responsible for any losses or damages resulting from the use of this information.

Feel free to reach out if you would like to invest in the Birmingham market.

Robert,

I can help you in Birmingham. Feel free to reach out at your convenience