Is there a shift in the Birmingham, Alabama real estate market?

I want to share with you an observation I had this past week while working on an appraisal assignment. I first want to preface this post by saying that one neighborhood does not make a market, and just because one subdivision is acting a certain way does not mean that the whole Birmingham area will be the same. With that being said I thought I would pass along some positive information that could give us a hint of things to come.

While working in this neighborhood on a home appraisal my research indicated that within the past 12 months of the date of my assignment there were NO foreclosure sales within this particular subdivision. That’s right folks, I said NO foreclosure sales. You may wonder why this is such a big deal to me, so I will tell you. I can’t remember the last time I was in a neighborhood working on an assignment and not found at least one foreclosure sale. They have been so prevalent that they could not be ignored. It’s not that appraisers try to avoid these sales, because they don’t.

People ask me all the time if I have to use distress sales, including foreclosures and short sales, and I tell them that as long as they reflect the actions of the market I must use them because they are influencing home values, however I have seen a gradual decline in the number of foreclosures. [Tweet “If foreclosures continue to decline this could result in a shift in the Birmingham, Alabama real estate market because average prices will begin to rise because they are influenced less by the foreclosures.”]

I thought I would look at total sales in the Birmingham market area since 2010 and see how the percentage of foreclosures have changed.[visualizer id=”5519″]

Sales for 2013 are only through July and the total number of sales is lower, however we are more concerned with looking at the percentage of foreclosure sales to total sales.

Non Distress salesDistress salesTotal salesPercentage
20106303
3289
9592
34.29%
20116520
3288
9808
33.52%
20127488
3282
10770
30.47%
20135379
1640
7019
23.37%

As you can see there has been a steady decline in the percentage of foreclosure sales to non-foreclosure sales in the overall Birmingham, Alabama market. We have heard this in the news, but the data provided by the Birmingham Multiple Listing Service seems to back up this claim. Only time will tell if this trend continues. What are your thoughts on this. Have you seen the same? Different?

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

 

 

 

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