2018 has been a prosperous year for the real estate market all throughout the country. Most states have seen promising results with the combination of a better economy and higher wages allowing buyers to purchase a home without shopping around for the least expensive deal.
Most of the U.S. is dealing with a shortage of affordable housing for sale, or simply a shortage of homes for sale period. While this may be bad news for the buyers, it is excellent news for sellers who wish to have more than one potential buyer competing for the best price.
Currently, we are in a buyers’ market, but that could all change as interest rates are expected to rise by the end of the year. Some sellers may feel that they need to sell their home for a lower amount to attract buyers wary of the high mortgage rates.
Birmingham is the Best Place to Buy a Home in Alabama
The city of Birmingham is located in the foothills of the majestic Appalachian Mountains It is the most populous city in the state and the county seat of Jefferson County.
The city gained most of its population during the height of America’s manufacturing age. It was the only city in the world that had three major ingredients needed to make steel, which is limestone, coal and iron ore. These raw ingredients all occur naturally in Birmingham within a 10-mile radius.
In the past 40 years, Birmingham has become a major hub for today’s most important industries such as construction, banking, service-based companies, publishing, and medical research. It is no wonder that the city earned the name of The Magic City with so many employment opportunities available for people of all walks of life.
There are many other reasons why Birmingham is the best place to live in the state of Alabama. It has a vibrant downtown area that appeals to young and old, a growing loft community, and world-class locally-owned restaurants that offer exceptional dining experiences for residents and tourists alike.
If you are still not convinced that Birmingham is a great place to buy a new home, you should consider their low-risk and stable housing market. Most properties available are priced between $80,000 and $100,000.
This price range makes it a popular location for real estate investors with all levels of experience. Whether you would like to purchase a home of your own or invest in rental property, there is an opportunity for you in Birmingham.
The Low Housing Inventory in Tuscaloosa Affects the Alabama Housing Market
The housing inventory for Tuscaloosa in January totaled 839 units, which is a decrease of 15% from January 2017. The inventory, however, has increased by 3.5% since December 2017. Now available homes are on the decline in the area creating a major demand for available homes at this time.
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In Tuscaloosa, houses currently stay on the market for an average of 58 days. That is great news for sellers, but not for buyers who are shopping around looking for the best possible deal. Throughout the past five years, the average for days on the market in January is 113 days.
How Higher Interest Rates Will Affect the Alabama Housing Market
Recent news in the real estate industry across the country focuses on the expected rise in interest rates, which are predicted to occur during the second half of 2018. The current average interest rate for a 30-year fixed-rate mortgage is at 4.38%. This is up 4.18% from January 10th.
While the stock market is on the rebound, real estate investors are working to adjust from the monetary policies to an economy with inflation and higher interest rates. The recent decline in the market in February shows that the economy is returned to normal with higher debt costs.
Rising interest rates do not always cause the housing market to slow down, the same way that an increase of rates does not cause issues with the employment market. While we may see one or more shifts from a seller’s market to a buyer’s market due to this change, the overall status of the real estate market is expected to stay the same.
The Alabama Housing Market for 2018
According to statistics from the real estate website Zillow, Alabama has an average home value of $125,306. The home values have been on the rise over the past year with an increase of 5.5%. Zillow predicts that the value of homes in Alabama will continue to rise throughout 2018 as much as 3.9%.
The median price per square foot in Alabama is $97. That is an increase from the average in May 2012 which was at $83.
Zillow has rated Alabama’s overall housing market health at 2.3 out of 10. Homes stay on the market at an average of 114 days before they sell. Yet with the increase of demand for available homes, that number could gradually decrease throughout the year.