A. Booming house and condo sales in Alabama
Real estate markets around the country are on fire. Housing prices in Birmingham, Alabama, have been hitting new highs month after month. According to the Birmingham Association of Realtors (BAR), the listing life for MLS homes on the market is only twenty-four days on average. There’s no getting away from the fact that Birmingham’s property markets are motoring along on all cylinders.
BAR also underlines that year-on-year sales are up by close to 32%, with capital appreciation of sold homes around 14%. Selling prices are even higher at 15.5% annual growth. Inventory is down by an eye-popping 27%, consolidating into a sellers’ market if ever there was one. In Shelby (also Coosa and Randolph), it’s not unusual to see bidding wars pushing the numbers higher than sellers’ expectations. Any which way you look at it, Birmingham residents are enjoying the warmth of growing wealth in their homes as promised by the American dream.
B. Home cash buyers in a sellers’ market
Professional home cash buyers and home sellers are essentially on the same page as far as expectations go, namely:
- Getting an offer within forty-eight hours and closing inside of a week
- Cash on the nail. No lender’s appraisers are involved in disrupting the agreed price.
- Home inspections before offer submission, thus removing contingencies.
- No commissions are payable.
- Cash offers unaffected by sub-standard curb appeal and internal aesthetics.
- Erasing the sometimes stressful inconvenience of staging and showings.
- Avoiding droves of buying prospects moving through your home
- Savings on some closing costs.
- A discount on fair market value (i.e., the odd one out – not a benefit)
The questions that arise are these:
- Is there room for a home cash buyer like Home Buyers Birmingham in a market situation where sellers have the upper hand?
- Are the advantages of selling a home for cash (described above) worth taking a lower than fair market value price when buyers are tripping over themselves (in cases) to submit a traditional offer?
C. Here’s the other side of the coin in Birmingham Al
Not everything about residential real estate is a bed of roses in Birmingham. People’s lives don’t always go according to plan. It creates exceptions – a lot of them – just as most are getting used to the better times. According to Zillow, there are sixty-three foreclosed houses on the market currently in the region. Other authoritative sources show short sales sitting at twenty-five. There were 1480 bankruptcy filings in 2020 and over 2000 in 2019. That’s only touching the surface. Think about the following:
- Fixer-uppers: Numerous homes suffered damage (e.g., mold, flood, fire) during the COVID-19 crisis – not unlike the rest of the country. Many homeowners and landlords, short on cash, don’t have the resources to remedy the disrepair.
- The divorce rate in Alabama state is close to 10 per 1000 families in 2018 – and COVID-19 home confinement probably didn’t assist this statistic in any way.
- The CARES Act has been holding the floodgates back on evictions and foreclosures. It gave renters a massive break at the expense of landlords by allowing them more or less to squat instead of pay rent. With it coming to an end in March 2021, there will probably be wholesale tenant abandonment of the premises, often in a state of neglect. As a result, many new asset calamities are likely to emerge. Mortgage companies, now unfettered by COVID-19 regulations, will probably go after faltering borrowers pretty aggressively.
- Contested wills and probate hearings take up space and time in the Birmingham courts. It’s an indication that assets – primarily real estate – are in a state of flux and turmoil in many families.
- Property wholesalers throughout Birmingham with huge portfolios frequently have “bad apples,” threatening to spoil the entire barrel. This, by definition, has pressured landlord’s cash flows and inhibited buying more properties in a hot market. Owners just want to see these anchors around their necks gone as fast as possible.
- In 2020, Jefferson County, home to Birmingham, reflected approximately 2,100 people moving in, but more than that number transferring out.
So what are the implications of the trends and observations above? Well, divorce and inheritances generally accompany social turmoil. Disagreements between families and couples obstruct one’s ability to take advantage of a “seller’s market.” Lawyers invariably get involved, and securing cash in the bank becomes more of an issue than going for the best price. Frequently, too, the involved parties are out-of-state – not controlling the situation or not talking to one another.
When your employer wants you somewhere else to take on a job, the time lag in selling a residence isn’t ideal. Sometimes, companies make up the shortfall for high-level employees to get them into a new location.
The sweeping away of tenant protections and loan forbearance spells trouble for the next nine months of 2021 and beyond. It points to:
- Many homeowners under lender pressure may be looking for a quick resolution to their dilemmas. Property investors with less-than-flush bank accounts may welcome cash buyers to release the strain on their finances – a speedy closing being the main attraction.
- No matter how strong a real estate market is, homes that don’t show well bring up the rear-end and attract the least attention. Renovating and remodeling are not in the cards for folk coming out of the coronavirus era short on resources and patience.
- Realtors, also, go for the low-hanging fruit – ones that earn them the most commission the fastest. Houses in poor condition take longer to sell and may not meet their expectations.
D. What’s the takeaway of “the other side of the coin?”
There’s a productive and valuable role for home cash buyers in Birmingham Al, even in steaming hot real estate markets. Section C above tells the story like it is. Statistics are helpful, but when you dig down, there are notable gaps. Home cash buyers like Home Buyers Birmingham have spotted them. They have chosen to serve individuals and families all over the city who find themselves in unconventional situations. Also, remember that home cash buying is an intensely competitive activity in any market. Home Buyers Birmingham is aware of that and strives to offer you the best prices available inside this channel. Contact them today. There’s nothing to lose except a surprisingly good offer and a hassle-free, fast closing.
Home Buyers Birmingham
1821 11th Avenue South Suite #55331
Birmingham, Alabama 35205