The following is from an article that appeared in Over the Mountain Journal on March 11, 2021
In what ways has the pandemic affected the OTM real estate market?
The biggest impact from the pandemic is that it exacerbated the problem with low inventory. More sellers have been hesitant to list. So, prices in Mountain Brook, Homewood and Vestavia have increased at a faster pace than they would have otherwise. Those markets are so competitive that listings price appropriately and in good shape are getting multiple offers. Often, winning bids are significantly above asking price and some buyers are even waiving their contingencies on financing and inspections.
Over the past 12 months, have you seen any changes in what buyers are looking for?
With rates at historic lows, buyers have significantly more buying power. Not surprisingly, the biggest trend we've seen in the last 12 months results from the favorable rate environment. Buyers have a stronger preference for updated, move-in ready houses because it's easier to borrow more up front and get an updated home than it is to find a fixer-upper that requires additional out-of-pocket investments after closing. So, we're seeing more multiple offer situations with the listings that are move-in ready.
Which OTM neighborhoods are hot right now?
The perennial neighborhood favorites are continuing to attract more buyers and see bigger price increases. Pretty much everything in Mountain Brook, Vestavia and Homewood is hot. The neighborhoods of Crestline, Hollywood, Edgewood, and the area around Vestavia Country Club continue to outperform.
Are there any up-and-coming areas where a buyer can find a good deal?
There are several up-and-coming neighborhoods over-the-mountain. Vestavia homes, in general, appear to be the best all-around value. The neighborhoods that are zoned for Brookwood Forest Elementary are undervalued relative to the rest of Mountain Brook. Since Mountain Brook is landlocked geographically (as are Homewood and Vestavia), the supply of homes is pretty much set. So, increasing demand for Mountain Brook homes will likely drive more buyers to the more affordable neighborhoods zoned for Brookwood Forest. The neighborhoods south of I-459, between Highway 280 and I-65, and north of Highway 119 are also likely to see increasing demand in the next several years. The area offers good schools zoned for either Spain Park or Oak Mountain High School. The area is also in the path of progress for families moving south from Vestavia, Mountain Brook and Homewood in search of more affordable housing.
What advice are you giving sellers getting ready to list in this market?
Even though we're in one of the strongest sellers' markets in years, buyers still flock to the houses that are priced appropriately and in move-in condition. So, we offer our clients the services of a stager/designer to help them prepare their listing to go on the market. We also share our market knowledge with our clients to help them price their listing to attract the right buyers.
One of the issues contributing to the lack of inventory is that most sellers are waiting to list their house until they find the perfect house to buy. They would rather stay in the home they're in, than have to move twice. But contingent offers aren't as competitive as noncontingent offers.
One strategy we're suggesting to our buyers who have a house to sell it to go ahead and list their property. Then, if they don't have a house in mind when they receive an offer on their listing, they can negotiate a later closing to give them more time to find a house to buy. Not all buyers will agree to give a seller more than the typical 30 days to close. But there's really nothing to lose. If they don't list their house, there's almost no chance they're going to sell at the highest possible price. If more sellers are willing to try this strategy, we'll see an increase in inventory.
The most important advice we can offer our sellers is to NOT sell their house "off the market." We're experiencing one of the best sellers' markets in our lifetimes. Numerous listings are getting multiple offers and selling for more than list price. The only way to find out what a house is really worth is to let the market compete. So, the worst thing a seller can do is negotiate with just one buyer. It might seem convenient to sell without going on the market, but the convenience likely will come at a high cost in this market.Posted by Mike Wald on
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