Recent conversations we’ve had with several homeowners about selling their homes remind me of a fact I consider important to remember:

We may be in the age of unprecedented access to information, but there’s still a lot of misinformation out there.

Cases in point are Sellers we’ve talked with in Alabaster and Hoover.

Both have tried to sell their homes, both properties are in popular neighborhoods, but neither home sold; in fact, neither couple even got an Offer. One of the homes has been on the market twice.

Why?

According to both Sellers, the reason is pretty obvious. “Everybody knows nothing is selling,” one said, while the other told me,
“There just aren’t any Buyers.” To back that up, one of the Sellers points to a home directly across the street from hers that has
been on the market since November, 2008. Within only a few blocks of this setting are at least four more homes that never sold,
either.

I have to admit that I can’t blame these folks for thinking there are no Buyers out there. After all, the sight of real estate signs swinging in the breeze for long periods of time is pretty convincing visual proof for them.

But when you watch the market day in and day out, a different picture emerges.

With almost 1200 homes having sold across Shelby Co. since April, it’s a bit of a stretch to say there are simply no Buyers. The truth is that those Buyers are going after the best deals they find.

The real reason most homes fail to sell is because they’re overpriced. We see proof of this all the time, both in properties that draw little interest from Buyers, and others that draw almost immediate interest after going on the market.

Generally speaking, the current market is not one for putting your home up for sale to simply test the waters or “just see if it will sell.” Sellers with this perspective face slim chances at best of even getting an Offer.

The homeowner who is motivated to sell, and who is willing to meet Buyers on their price terms is the Seller who is far more likely to be successful.

David

If Sellers sometimes have an unrealistic idea of what a Buyer is willing to pay, Tom Horn brings them back to reality.

Tom is an appraiser in the Birmingham and Shelby Co. area, and owns appraisal-source.com, a company Lenders and homeowners trying to sell on their own rely upon for accurate residential market appraisals.

Colleen and I caught up with Tom and got his analysis of what’s happening with home values in the Shelby Co. and Birmingham areas. We found out pretty quickly that talking with Tom is very interesting!

From everything we learned about home price trends in the area, as well as the negative effects on home sales prices caused by government-mandated changes in the way appraisers are selected, we knew we needed Tom to share his expertise with us.

We’ve divided our interview with Tom into two segments. Click the players just below to listen to Parts 1 and 2.

Tom Horn Interview Part 1:

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Tom Horn Interview Part 2:

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…or, if you’d like to listen by downloading to your portable device:

Click here to download Part 1 (10 Mb).

Click here to download Part 2 (7 Mb).

Links to Thomas Horn’s websites:

Click for Appraisal-source website

Click for Tom’s Appraisal Blog

We hope you enjoy … and thanks, Tom, for the great information!

David Black

If you’ve been thinking about buying a home in the Birmingham or Shelby county area, be aware: the clock is ticking…

The government’s Tax Credit for first time (and many existing) Buyers ends April 30th.

Under current rules, that’s the last day you can have a Contract to buy a home in place and still be eligible for the credit.

Have you been ‘on the fence’ about buying?

Here are some of the reasons proving why buying now is such a good idea:

After taking a look at new numbers from the Birmingham MLS, it’s clear that Buyers have the upper hand when it comes to purchasing a home in the area.

Almost all across the board in the areas we checked, sales in January were down, and in some cases, half of what they were four months ago:

The message for now is clear: Buyers call the shots.

If you’re looking to buy, all sorts of factors are on your side at the moment. First, there are lots of homes available (482 in Helena and Pelham, 350 in Alabaster and 684 across the North Shelby Co. area at the moment!). Second, smart Sellers know they have competition and will do whatever they can to ‘work a deal.’

Third, interest rates are, in two words, still great. One of the Lenders we work with reports 30-year fixed rates remain below five percent, while 15-year rates (which were around 4.375% last week) have dropped a bit more.

So, if you’re a Seller, the message here is that you absolutely must meet Buyer’s expectations in terms of how nicely your home shows, and price. Fail to meet either of those requirements, and your home won’t sell.

And if you’re a Buyer, with such a good market for buying a home, one question comes to mind:

What are you waiting for?

David

Ever wished for a crystal ball so you’d know what’s ahead? That might, or might not, be a good thing, depending on what you want to know…!

On the one hand, having a crystal ball to look into the real estate market could sure help ease concerns for some folks here in the Birmingham and Shelby county areas. Or would it?

Suppose you’re thinking of selling your home. Would you be more inclined to sell sooner, if, say, the ball suggested values would continue to slide in 2010? What if the ball suggested you’d get more if you wait?

I don’t think we really need a crystal ball to know that home values will rise. Nearly every expert out there predicts they will, at some point.

It’s those last three words that are the kicker: At some point.

Hmm. Does that mean in the next three months? Ten months? Two years? This is where having a crystal ball would be pretty handy.

However, crystal balls are about as plentiful as bumper stickers in Alabama supporting the Texas Longhorns. People ask us questions frequently that would pretty much need a crystal ball to answer accurately. “What is my home going to be worth in a year?” would be one such question.

“What will my home sell for if I list it right now?”

Ahh. There’s a question that doesn’t need a crystal ball as badly to answer. We have good resources we can draw upon to come up with a figure that—more times than not—winds up being very close to actual selling price.

The fact is that if your home ’shows nicely’ as Agents like to say, and is priced where we know Buyers will bite, your odds of selling are promising. And, yes, that’s true even in the tough market affecting so many neighborhoods in the Birmingham and Shelby Co. areas as we plow into 2010.

This might sound ridiculously obvious to some, but the ’shows nicely, priced right’ concept is one we’ve seen trip up a lot of people trying to sell their homes. So, not everyone really understands how important this really is. Or put another way, not everyone really ‘gets it.’

During 2009, we represented Sellers who agreed to price their homes where we suggested. Granted, they weren’t always thrilled with the price we recommended. But they swallowed hard and said, ‘okay.’ Why? Because they needed to sell. Helping ease this frustration was their knowledge that—when they turned around to buy another home—they’d be enjoying the opposite side of the tough selling market, getting a very good deal on the home they’re buying.

We also dealt with Sellers in 2009 who disagreed with us. They felt they had a better idea than we did of what their home would would sell for. And guess what happened with their efforts to sell? Nothing. Zilch. Their homes didn’t sell, despite being on the market plenty long enough to sell. I remember several cases where other homes in the same neighborhood as our Clients’ house sold, and in the general price range we had recommended.

There were some cases where our Client’s home never even got an Offer. We always talk about how important it is to listen to what the market is telling us. Let me assure you of one thing: If a home for sale doesn’t even get an Offer, that’s the market talking. It may even be shouting.

I know one thing for sure about trying to get a home sold in this market. You either have to ‘get it,’ or you have to trust your Agent’s advice. Otherwise, your home is probably not destined to sell.

I think the real question that emerges is: How badly do you want, or need, to sell?

Clearly, there are many situations for folks where—regardless of how the market may be performing at the moment—it’s important to sell sooner, rather than later. Some Sellers who contact us tell us they need to sell as fast as possible, and are waiting for us to tell them what to do to make it so.

These are the people we feel confident we can help.

And no, we don’t have a crystal ball to predict the outcome.

But listening to the market and to your Agent go a long way right now, and will most likely mean you can start packing sooner, rather than later.

David

You can have fun and help people at the same time.

That’s what the Oak Mountain Real Estate Network’s annual Christmas Auction, held November 18th in Pelham, is all about:

Despite a tough economy, we had a lot of Agents and people working in affiliated fields participate. When it was all over, the Network had raised nearly $2,200. The Network supports two very worthy causes here in Shelby County: SafeHouse and Family Connection.

Special thanks to Auctioneers Kelly Bishop-Hicks with Allstate Insurance and John Holliman of the Holliman Law Firm, who did a great job!

David

Getting your home sold in Shelby County is taking longer in some communities and less time in others, while prices have dropped, according to October statistics from the Birmingham Multiple Listing System.

The average number of days on market increased in Alabaster and Chelsea, but fell in Helena, Pelham and Calera:

Click here to see a larger version of the Average Days On Market graphic…

Prices continued a downward trend in October, and substantially so, compared to September:

Click here to see a larger version of the Average Sales Price graphic…

How many homes are selling?

Except for Calera, the number of homes sold in October dropped from September. Chelsea saw the sharpest one month drop, while more homes sold in Calera during October than in September:

Click here to see a larger version of the Number of Homes Sold graphic…

Why the uptick in Calera?

Perhaps it’s the large inventory of low cost housing (both new and resale), making for some very attractive deals for first time home buyers, along with the fact that Calera qualifies for USDA financing (which means loans with no down payment required).

I think these statistics are giving us some important messages.

If you’re planning on buying a home, the market is continuing to work very much in your favor in the Birmingham and Shelby County area. Prices have dropped, inventory is in plentiful supply, and loans continue to be very affordable.

If you’re trying to sell, the message these numbers present is that it’s going to take a lot more than just putting a For Sale sign in the yard.

Marketing plays a more critical role than ever, and must be done in innovative ways if your home is to stand out among all the other properties for sale.

Pricing is no less important and will be a huge deciding factor in how quickly you sell, or if you sell, at all (believe me, we have seen examples of both!).

You may also benefit from an informed assessment of your property’s appearance and condition. With so many homes for sale right now, if your property doesn’t sparkle, Buyers will simply move on to another.

These are some very good reasons for trusting the sale of your home to an Agent who’s knowledgeable about the market here in the Shelby Co./Birmingham area and who knows how to achieve success in spite of challenging economic conditions.

David

The latest numbers for home sales in the Shelby county and Birmingham area confirm that 2008 saw a significant downward slide in the market.  A report by the Birmingham Association of Realtors shows home sales down by 29% for the year, compared to 2007.

Average prices slipped by 5%, and the average number of days homes stayed on the market stood at 100 for 2008, up from 96 in 2007.  Home sales for December, 2008 totaled 798, which is down by 32% compared to December, 2007.

While 2008 home sales in Birmingham and Shelby County, Alabama dropped 29% compared to the year before, inventory continues to drop, and experts say the market remains poised to make a significant improvement.

It’s interesting to compare these statistics with other markets.  While home values in Birmingham lost 5%, prices dropped closer to 11% when averaged nationally, and 32% in California.  So, as we have stated before, while our local market does wind up seeing most of the same trends that occur elsewhere in the country, the undulations in Birmingham and Shelby county home sales are typically nowhere near as extreme.  And for that, we can be thankful.

While our local market numbers aren’t what homeowners or people in the industry want to see, there is reason to be optimistic that home sales will pick back up.  As people knowledgeable about real estate market trends are well known for saying, it’s only a matter of time.

Negative news-saturated owners are facing fear about selling their homes. A good way to counter that is by obtaining expert information about what's happening with the market right here in Shelby county.

With our climate of 24-hour negative news these days, a number of homeowners who would like to think about selling are having to deal with fear.   You may be uneasy, wondering how long it will take to sell your home.  And then there’s the question of whether you might wind up with as much money in your pocket as you’ve been hoping.  And if a foreclosure pops up in your neighborhood, what then?  Would you wind up feeling even more uneasy about selling?  So, what to do?

Look carefully at homes that are selling in the area, and those that are not selling.  What’s the difference?  Price is certainly a huge consideration, but so is appearance.  A third factor—that is making more and more difference in whether a home sells these days—is how it’s marketed.  Not all homes for sale get the same exposure.

The fact that homes continue to sell—even in the middle of the constant barrage of negative news—clearly demonstrates that the local market continues to be healthier than many people realize.

Here’s another reason to feel that better times are ahead:  Inventory—the number of homes for sale—fell by 19% during 2008.  At the end of the year, there were 10,201 homes for sale, compared to 12,642 at the end of 2007.  If that trend continues, then it’s safe to conclude that the ‘Buyer’s Market’ is beginning to shift more back into balance.

If you’ve been thinking of selling your home, but are perplexed or somewhat uneasy about the current market and your prospects to sell, there’s an easy solution:  Give us a call.  We will be glad to take a close look at the history and trends of home sales, targeted to your neighborhood.  We’ll then be able to present you with a projection of how long your home might need to sell, and at what price a buyer would consider reasonable.  This could be valuable information to help you with selling during this around-the-clock negative news era.

Colleen and David

Could the “Buyer’s Market” in the Birmingham and Shelby county area be starting to shift toward becoming more balanced?  That might be happening, based on November 2008 home sales statistics released by the Birmingham Association of Realtors. And we are seeing encouraging developments about home sales in other parts of the country, too.

Locally, the number of homes for sale in November 2008 stood at 10,994, which is about 15% below one year earlier.

November, 2008 sales totaled 603, which is down about 49% from November, 2007.  November 2008 sales prices in the Birmingham and Shelby county markets dropped about 7% from a year earlier.  For year-to-date, the average price is about 4.5% behind 2007, according to BAR.

The average number of days for a home to stay on the market in November, 2008, stood at 92, compared to 103 for the same month a year earlier (this figure excludes new home sales).

When you watch TV and read the headlines, you’ll no doubt see that 49% sales drop prominently mentioned.  So, is all the news bad?  We think several of the market indications in central Alabama are actually positive, believe it or not, and there are continuing indications that other real estate markets in the country are becoming more balanced, too.

First, there are not quite as many homes for sale as there have been, and that’s a good thing for people thinking of selling.  Buyers, meanwhile, still have boatloads of choices, so it’s certainly not as if their selections are drying up.  Second, the seven percent drop in prices helps show something we’ve mentioned before about the Birmingham and Shelby county housing market:  Fluctuations in values here do not swing as wildly, and to such extremes as they do in many other cities.  So, while values have plunged much farther in some other real estate markets, our area has remained a lot more stable.

We received a message from a lender this week, advising that interest rates on 30-year fixed loans some buyers will be eligible to get have now fallen to 5.0%, and 15-year fixed loans have now fallen to below 5%.  All I can say is ‘wow,’ the close of 2008 and start of 2009 have to go down in the record books as one of the best times to buy a home in Birmingham and Shelby county in years.

Clearly, the negative economic news saturating the media has caused some buyers to hold off, despite some of the most attractive pricing and interest rates ever.  But indications are starting to suggest that continuing to wait before buying may be getting riskier.  Why? 

Nationally, home sales are starting to pick up, while inventory is declining.  That means investors and others are jumping on the really good deals, so others may miss out if they wait too long.  You can get a very interesting perspective on where real estate markets appear to be heading, by clicking below to watch the November, 2008, housing report, produced by Keller Williams Realty:

‘Tis the season to buy!

David