So How Was The Birmingham Real Estate Market In 2018?
So 2018 is in the rearview mirror and 2019 is ahead of us. Before the Birmingham real estate market heats up I thought I would review how 2018 compared to the previous year.
Home sellers and buyers can benefit from knowing what’s happening in the market so they know what they’ll have to do in order to sell their current home and buy their next one.
It’s easy to get caught up in what is happening across the country but since real estate is local it’s important to study the local Birmingham real estate market. Being a local Birmingham appraiser I have the benefit of studying trends in all areas of Jefferson and Shelby counties so I know what is going on.
While buyers and sellers probably don’t need to have the in-depth knowledge that an appraiser has it’s good for them to know the basics so that they can make informed decisions about buying and selling a home.
The information I’m including here is broken down into Jefferson County home sales and Shelby County home sales. When selling a home it’s important to drill down even further into the specific neighborhood or subdivision that your home is located in.
For purposes of this article, it would be impractical and impossible to look at every neighborhood. My advice would be to look at the housing statistics presented here and then look at similar stats for the neighborhood or subdivision you’re interested in.
Homes Sold By Quarter
If we take a look at how many homes sold each quarter we can get a general idea of which time of year is most active. Both Jefferson County home sales and those in Shelby county follow the same trend.
Sales in the first quarter tend to be the slowest with momentum building into the summer season. Home sales start slowing in the fall and are at their lowest in October through December.
Here is a visual of what this looks like.
In Jefferson County, there was a decrease in the number of homes sold of 5% from 2017 to 2018 while Shelby County home sales increased approximately 7%.
Median Sold Price: 2018 vs 2017
When comparing Shelby County median selling price to Jefferson County the former leads by around $50,000. Here are the two so that you can compare:
Both counties saw a gradual overall increase in median sold price most likely due to the reduced inventory which has resulted in prices slowly increasing.
Active Listings: 2018 vs 2017
The trend in active listings has been an increase at the beginning of the year with a peak mid-year and then a gradual decline to year end. Jefferson County active listings saw a steeper decline over the entire two year period compared to Shelby County which was more modest. This is most likely tied to declining sales in Jefferson County during 2018 compared to 2017. Shelby County active listings were more stable for the two year period.
Cumulative Days On Market: 2018 vs 2017
The cumulative days on market (CDOM) is a measure of how long it takes to sell a home from initial listing to final sale. If a listing expires or is canceled and then relisted the previous listing is also included. Both Jefferson and Shelby County had similar CDOM’s. Both have gradually decreased from the beginning of 2017 to the end of 2018.
Housing Supply: 2018 vs 2017
Housing supply, also known as months of supply, is a measure of how long it would take to sell off the existing inventory if no other homes were put on the market and taking into consideration the current rate of sales. A housing supply between 0 to 3 months is considered a seller’s market, from 4-6 months is a balanced market and over 7 months is a buyers market.
Due to decreased sales at the beginning of the year, this number is typically higher in January. It usually dips in Spring and Summer season and then creeps back up towards the end of the year.
Both Jefferson and Shelby counties show similar trends in housing supply over 2017 and 208 with an overall declining trend. Here are the visuals:
How Can Buyers And Sellers Use This Information?
Home buyers in Jefferson and Shelby counties can use these trend statistics when buying or selling a home. A gradual decline in supply certainly puts sellers in the driver’s seat. Of course, each subdivision or neighborhood is different and the activity for the specific area you are in will dictate your approach.
Things To Keep In Mind When Pricing Your Home For Sale
- If there is limited supply, and demand is good, price at the upper end of the market
- If there is an oversupply of homes price at the lower end of the market
- If your home has been updated you can be more aggressive in your pricing
- Homes with no updating should be priced lower since most homes currently for sale in today’s market are updated and move in ready
- Know your market and price accordingly or your home will not sell, which will signal to buyers that something is wrong with it
Conclusion
I hope this information was helpful to you for learning about the Birmingham real estate market. If you have any questions feel free to contact me and as always, thanks for reading.
Nice Tom. I enjoy seeing your market visually. Thanks for putting together the graphs. It looks like this year was fairly normal. Nothing too crazy. Is that a good non-technical way to put it?
That is a perfect way to put it, Ryan. The Birmingham market is pretty stable so we do not see wide swings like in other parts of the country. There were no big surprises in the larger Birmingham market.
Hey Tom! Great post! I love your market updates. Very clear and concise. I also love your charts. They look great and really tell the story.
Thanks, Jamie. I hope that agents, buyers, and sellers in the Birmingham area find it helpful when making decisions.