Overlooked U.S. Housing Markets Now Thriving Amid Widespread Declines

Over the past five years, the Southwest Florida housing market and parts of the Northeast and California have dominated the news, boasting double digit appreciation rates and meteoric property value growth.

Meanwhile, other markets held steady or grew modestly from 2001-2005. It is these markets that are now bucking the trend of rising inventory, stagnant home sales and even declines in median prices of housing. Case in point: Birmingham, Alabama.

Even declining Florida mortgage rates have failed to dramatically spark Sunshine State sales, but to the North, Alabama area real estate agents continued their string of rising sales in August, once sales of single-family homes, condominiums and town houses were counted.

• Agents in August sold 1,803 units overall, up 10 percent from 1,642 in August 2005, according to the Birmingham Association of Realtors.
• Birmingham sales surged in the face of a national trend in which new and existing home sales fell in August, the eighth such decline over the past 10 months across the U.S.
• Factoring out sales of condos and townhouses, which the group began including to more accurately reflect home sales, the number of area homes sold by agents fell 1 percent to 1,622 in August.

The only other time this year when area sales (excluding condos and town houses) declined was April, when the association reported sales of 1,364, compared to 1,505 in April 2005.

“Considering what’s going on nationally, a 1 percent drop is pretty good,” said Mickey Green, president of Coldwell Banker Green & Co. in Hoover, Al. “We’ve had a bit of a lull as the market adjusts from a buyer’s market to a seller’s market. We don’t get as many calls as we used to, but those who do look are serious buyers now.”

Existing-home sales nationally are forecast to fall 7.6 percent to 6.54 million in 2006, still the third-best year after consecutive records in 2004 and 2005. New-home sales should drop 16.1 percent this year to 1.08 million, the fourth-highest on record. Meanwhile, housing starts are projected to decline 9.6 percent to 1.87 million in 2006.

Tom Ponder, of the Keller Williams office in Trussville, Al., said many agents in other cities where Keller Williams has offices are amazed at how well the Birmingham housing market is faring when you consider the market slowdown nationally and how Florida home prices are looking. Many Floridians, weary of hurricanes, housing costs, taxes and insurance, are considering moves out of state, and nearby Alabama is a prime destination.

“I’ve been in the business here 35 years and we’ve never had the big booms and busts of other cities, just steady growth; In a lot of areas like California, Florida and the west coast, they had 30-40 percent housing inflation, which wasn’t sustainable,” Ponder said.

Cynthia Ragland, a broker with Abana Realty’s Trussville office, said her company continues to experience robust sales, setting a record in August.

“It’s a good time to buy a house because there are a lot on the market,” Ragland said.

There are 13,000 homes listed in metro Birmingham compared to 8,900 a year ago, she said. From January-August, metro Birmingham sales climbed 12 percent to 12,623, compared to 11,199 a year earlier. The city is on pace to break last year’s record sales tally of 16,715.

The average price of an area home sold in August fell to $203,731, compared to $206,734 a year earlier. The median price fell to $164,000 from $165,000 in August 2005. The average selling price year-to-date is $200,892, up 4 percent from $192,288.