As professional Alabama property managers, we like to keep dibs on local real estate. So, it was with interest that we read a report from Realtor.com detailing how housing prices have risen throughout the country. Scanning the list reveals that Birmingham is number 69 on the list. The median listing for the area right now stands at $177,950, which is an increase of 2.9 percent from April 2014 to May and 4.7 percent from May 2013, one year ago. The reason behind the rise? Besides the general trend of rising home prices throughout the nation as a result of an improving economy, lagging inventory seems to be the prime culprit. There just aren’t as many homes up for sale as there were years ago, when a glut of homes precipitated a strong buyers’ market. Case in point: In May, there were 7,908 homes for sale in active inventory in the area, which was 11 percent lower than May 2013’s level, and 0.5 percent lower than April 2014. The median time homes in Birmingham spend on the market is 82 days, which is down by nearly 11 percent from a year ago. Fewer homes on the market means lower supply, which ultimately drives up prices. And as we discussed previously, lagging inventory and higher prices have a noticeable correlation with rental rates and vacancy rates. This is good news for our property owners, who appreciate lower vacancy rates and the ability to find tenants who have been priced out of buying homes – or think buying has become too expensive to bother with. We’ll continue to keep an eye on Birmingham real estate. But we anticipate that a strong summer season will only serve to send prices higher. Down the road, perhaps we’ll see more homes enter the market as more homeowners will see the promise of getting more for their homes, but for now, low inventory is the norm.
Matthew is the CEO of Evernest. He is a student of the book Good to Great and is passionate about building the best property management company on the planet (and maybe even the universe if Elon Musk will hurry up). You can usually find Matthew at the baseball field with his son, at a dance recital with his daughter, or at his favorite restaurant with his wife, when he’s not in the office. And if you can’t find him in any of those places, it probably means he’s traveling.