Category Archives: Real Estate for Everyone

“Alabama 3rd quarter home sales highest since 2007″

Click here to view or print the full quarterly report compliments of the Alabama Housing Finance Authority.

Alabama residential sales during the third quarter while sluggish continued to gradually improve, up 3.3 percent compared to the same period a year earlier. This is an improvement over the 2.3 percent growth experienced in the second quarter of the year. Total sales of 12,469 units represent the best third quarter since 2007 (15,051 units). With that said, third quarter sales are still 25.2 percent (was 25.0 percent last quarter) below the quarterly peak established in 2005 when 16,674 units were sold.

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View full sizeAlabama housing inventory down .9% from 3rd Quarter 2013. Infograph courtesy of ACRE. All rights reserved.

Supply: The statewide housing inventory average during the third quarter was 33,538 units, a decrease of .9 percent from the same period in 2013 and 17.7 percent below the third quarter peak in 2010 (40,745 units). There was 8.1 months of housing supply (7 months considered equilibrium during 3rd quarter) in the third quarter 2014, the same as last year (3Q). Historical data indicates that the third quarter inventory-to-sales ratio in 2014 decreased 23.6 percent from the 5-year average (10.6 months) and decreased 14.7 percent from the 3-year average.

Demand: Historical data indicates that third quarter sales in 2014 increased by 12.1 percent from the most recent 3-year average (’11-’13) and 18.3 percent from the 5-year quarterly average (’09-’13).

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View full sizeAlabama median sales price up 1.8% from 3rd Quarter 2013. Infograph courtesy of ACRE. All rights reserved.

Pricing: The statewide median sales price during the third quarter was $130,284, an increase of 1.8 percent from the same quarter in 2013. Historical data indicates that third quarter median price in 2014 increased by 3.6 percent from the most recent 3-year average and 3.2 percent from the 5-year quarterly average (’09-’13).

The Alabama Residential Quarterly Report is provided compliments of the Alabama Housing Finance Authority.

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ACRE was founded by legislative act in 1996 due to the efforts of the Alabama Real Estate Commissionthe Alabama Association of REALTORS and the Office of the Dean, UA Culverhouse College of Commerce to serve the State of Alabama real estate industry and the consumers it serves. ACRE is not a state-funded entity, rather its operates in part because of the goodwill & generosity of the ACRE Corporate Cabinet and our statewide ACRE Partners. Follow us @uaacre

Alabama Residential Quarterly Report: “3rd quarter sales highest since 2007″ | AL.com.

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Why Real Estate Should Be A Part Of Your Retirement Strategy

Financial Samurai Rental Property

WHY YOU SHOULD OWN REAL ESTATE

Although the 2008-2009 financial crisis rocked the country’s real estate market and practically every other investable asset class, I believe there are incredible benefits to investing in real estate to ensure a healthier retirement. As soon as you find a place you can envision yourself living for at least five years, it’s probably a good time to start your property search.

1) Inflationary asset. I remember thinking to myself back in 1994 how ridiculous it was to pay $1,000 a month for a one bedroom in Boston when I was paying $350 a month to rent a room in a townhouse with my buddy in Virginia. Today, a similar one bedroom is over $3,000 a month. Inflation is a powerful economic force that’s difficult to stop. You want to own inflating assets rather than always be a price taker. Eventually your income will stop growing, decline, or eventually disappear, making survival that much harder if you must continue renting.

2) A hedge against conflict. Whenever there is geopolitical risk, a major natural disaster, or a terrorist attack, notice how US Treasury yields go down due to a flight to safer assets. Housing is a direct beneficiary of lower interest rates due to the common practice of borrowing to own. When interest rates go down, refinancing activity also picks up, increasing the cash flow of homeowners everywhere. I have personally refinanced five times with various properties and am paying $3,500 less in interest a month than 11 years ago.

3) A leveraged play in a bull market. When times are good, assets tend to inflate quicker due to higher employment, rising wages, and rising corporate profits. Real estate tends to be a major beneficiary during a bull market. Earning a 32% equity return in 2013 was fantastic. But earning a 75% cash on cash return on your 20% equity thanks to a 15% rise in home prices is even better.

4) Tax benefits. The US government has deemed real estate part of the American dream with mortgage interest deduction, the 1031 exchange program to defer taxes, and a generous $250,000 tax free gain for singles and $500,000 tax free gain for married couples. It takes a $714,000 return at a 30% effective tax rate to clear $500,000 in profits. Based on my research, I’ve found that the ideal mortgage amount and income combo is $1 million and $250,000 a year based on today’s rates.

5) Much easier for a regular person to understand and manage. Real estate is a relatively easy business to understand compared to investing in stocks. Good location, good tenants, manageable maintenance, and rental growth are all it basically takes to make for a solid real estate investment. Stocks have so many more variables to deal with, including: management credibility, industry growth, competition, politics, regulation, tax policies, inventory turns, margin analysis, operating profit growth, and more. It’s no wonder you’ll find plenty of first generation immigrants focus on accumulating property.

6) Less temptation to sell out too soon. Thanks to still stubbornly high selling commissions, the ability to sell is much more difficult than selling a stock when the markets are crashing. I know plenty of people who just had to get out of the stock market in 2008-2010 because they were scared out of their minds. It’s so easy to pay a $8 commission and press click. But when you’ve got to pay a 5% commission and go through the entire process of marketing a property, you tend to just sit tight and see what happens.

7) Paying back debt with inflated dollars. For people with fixed rate mortgages, their payments never change. 10 years from now you’ll get to pay off the same amount of debt with dollars that aren’t worth as much as when you first took out the mortgage. As your net worth grows, the mortgage liability becomes a smaller part of your overall net worth, thereby reducing any feelings of stress associated with the loan.

8) Never have to move again (so long as you pay your mortgage). Moving is a painful process. What’s more painful is having to move when you don’t want to. Many long-time renters are being displaced in cities such as San Francisco because the property owners want to capitalize on the demand. I was speaking to one renter who is being asked to move after 18 years. He has no job, a daughter who is entering high school, and a wife who no longer wants to be with him. He pays $1,990 a month for a place that could easily rent out for $3,800 a month.

9) Passive income machine. Although real estate takes ongoing maintenance, rental income is one of the best passive income sources around along with dividend investing. After the hard work of finding the perfect tenant is done, one should usually expect to collect income for at least 12 months before another tenant may need to be found. The rental income is also partially or completely shielded by non-cash depreciation expense as well thanks to the government.

10) An asset to pass on to your heirs. Everybody has heard a story of some grandparent buying a home for $20,000 that is now worth hundreds of thousands or even millions of dollars. If you can buy a property to live and enjoy, and then pass it down the family to give your children a heads start, what an amazing gift you’ll provide. It’s very difficult for Millennials to buy their own property nowadays. But besides working hard, a massive generational wealth transfer should help support future generations.

 Why Real Estate Should Be A Part Of Your Retirement Strategy.

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Awesome in MidTowne!

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Enjoy carefree living with direct access to Indian Creek Greenway, literally minutes from work/dining/shopping, resort pool, lakes and a park. Better than new, this gorgeous Harrison plan by Mark Harris features beautiful hand scraped hardwood floors, isolated master suite on the main floor, open floor plan, granite countertops and custom cabinets in the gourmet kitchen and a huge loft with two additional bedrooms up. A large covered veranda and a privacy fenced back yard provide a great space for outdoor events. 6437 Lincoln Park Place

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Alabama residential sales in September increase 11%

Click here to view or print the entire September report compliments of the ACRE Corporate Cabinet.

Total Sales.jpgView full sizeAlabama home sales in September improved 11.1 percent compared to last September. YTD sales up 2.4%. September sales are now up 42% from its September bottom in 2010. Infograph courtesy of ACRE. All rights reserved.

Alabama residential sales totaled 3,957 units in September, an increase in sales growth of 11.1 percent from the same period a year earlier and 201 units above of our monthly forecast. September joins June and July as the only months in 2014 where sales have eclipsed last year. Nationally, sales were off 1.7 percent in September from the prior year. See more details of how Alabama compares to the broader US market here.

The YTD Alabama sales forecast through September projected 35,170 closed transactions while the actual sales were 34,169 units, a 2.8 percent cumulative variance. YTD sales through September have been sluggish in most markets across the State but remain 2.4 percent above the 2013. Sales were up 3.3 percent in the third quarter compared to 2013.

Across Alabama, 76 percent of local markets reported positive sales growth compared to last September. In comparison, this figure was 64 in August and 48 percent in July. This figure also remains at 54 percent when taking into account total YTD sales compared to 2013.

Pricing: While the return of more consistent year-over-year sales gains is encouraging news, the lead story in 2014 relates to pricing. The Center shared in earlier reports that pricing represents the primary indicator that still had the greatest upside in the future. At least through September, this has come to fruition as the YTD median sales price is up in 19 of 25 or 76 percent of local markets. While this is good news for the market, as prices increase, sales (the typical lead story) attributable to investors bargain hunting will diminish the ability of this “buyer profile” to push the sales needle in the future. Distressed sales continue to significantly diminish as a percentage of total sales across the US, a trend most market watchers content will continue in the future.

Median Price.jpgView full sizeAlabama median home sales price in September 2014 improved 4.5% from prior year and now up 18% from the month of September price bottom in 2004. Infoigraph courtesy of ACRE. All rights reserved.

The median sales price improved by approximately 4.5 percent over last September and 6.1 percent when comparing the year-to-date (Jan-September) average for a broader perspective. Still, Alabama remains below the nation’s recent pace of appreciation but the Center prefers gradual increases in pricing over spikes seen in many parts of the country (typically in markets hardest hit by the recession). Keep in mind that pricing can fluctuate from month-to-month due to sampling size of data and seasonal buying patterns. The median price decreased 8.7 percent from the prior month. This direction is consistent with historical data (09-13) that reflects that the September median sales price traditionally decrease from the month of August by 2.6 percent.

Supply: The statewide housing inventory in September was 32,992 units, a decrease of 2.5 percent from September 2013 and 22.1 percent below the month of September peak in 2007 (42,329 units). There was 8.3 months of housing supply (7.5 months considered equilibrium during month of September) in September 2014 versus 9.5 months of supply in September 2013, a 12.2 percent favorable decrease. September inventory also decreased by 1.7 percent from the prior month. This direction is consistent with historical data that indicates September inventory on average (09-13) traditionally decreases from the month of August by 5.6 percent.

Demand: As anticipated, September statewide residential sales declined 4.4 percent from the prior month. This direction is consistent with seasonal trends & recent historical data that indicates September sales, on average (09-13), decrease from the month of August by 9.9 percent.

The fact that there are fewer distressed properties (attracting bargain hunting investors – typically cash buyers) changing hands when compared to last year has also narrowed the favorable percentage change associated with sales growth.

Seeking Balance: Ten or 42 percent of local markets are considered near or in balance where buyer and seller enjoy equal bargaining power. More markets are inching closer so this is encouraging news.

In contrast to reports of lack of inventory at the national level, Alabama still has above the needed levels of supply in most local markets (13 of 25 markets or 52 percent still have 10+ months of supply) but the supply of “quality” inventory is limiting sales according to local professionals with boots on the ground.

Industry Perspective: “The September National Housing Survey shows a slight recovery in consumer housing sentiment after a two-month setback, bringing us back to the modestly positive trend we’ve seen over the last year,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “It might be too late to save this year’s home sales from posting the first decline in five years. However, the return to an upward trend in housing sentiment, combined with this month’s positive news on the jobs front, suggests that a broad-based, albeit measured, housing recovery is on track to resume in 2015. The results of the past few months show that consumer optimism remains cautious and somewhat volatile, and we’ll likely continue to see bumps on the housing recovery path reflected in our survey results.” For full report, go HERE.

This monthly report is provided compliments of the ACRE Corporate Cabinet. 

Alabama residential sales in September increase 11%; 76% of local markets experience YOY sales gain | AL.com.

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Alabama residential median sales price continues to improve in August

Click here to view or print the entire August report compliments of the ACRE Corporate Cabinet.

Total Sales.jpg
View full size Alabama home sales in August slipped 2.1 percent compared to last August. YTD sales up 1.2%. August sales are now up 38% from its August bottom in 2010. Infograph courtesy of ACRE. All rights reserved.

Alabama residential sales totaled 4,139 units in August, a decrease in sales growth of 2.1 percent from the same period a year earlier and 210 units shy of our monthly forecast. Nationally, sales were off 5.3 percent in August from the prior year. See more details of how Alabama compares to the broader US market here.

The YTD Alabama sales forecast through August projected 31,414 closed transactions while the actual sales were 30,212 units, a 3.8 percent cumulative variance. YTD sales through August have been sluggish in most markets across the State but remain 1.3 percent above the 2013. Sales were up 2.3 percent in the second quarter compared to 2013.

Across Alabama, 64 percent of local markets reported positive sales growth compared to last August. It was 48 percent in July. This figure also remains at 64 percent when taking into account total YTD sales compared to 2013.

Pricing: The lead story in 2014 relates to pricing. The Center shared in earlier reports that pricing represents the primary indicator that still had the greatest upside in the future. At least through August, this has come to fruition as prices are up in 16 of 25 or 64 percent of local markets. While this is good news for the market, as prices increase, sales (the typical lead story) attributable to investors bargain hunting will diminish the ability of this “buyer profile” to push the sales growth needle in the future. Distressed sales continue to significantly diminish as a percentage of total sales across the US, a trend most market watchers content will continue in the future.

Median Price.jpg
View full size Alabama median home sales price in August 2014 improved 12.8% from prior year and now up 21% from the month of August price bottom in 2004. Infoigraph courtesy of ACRE. All rights reserved.

The median sales price improved by approximately 12.8 percent over last August and 6.3 percent when comparing the year-to-date (Jan-August) average for a broader perspective. Still, Alabama remains below the nation’s recent pace of appreciation but the Center prefers gradual increases in pricing over spikes seen in many parts of the country (typically in markets hardest hit by the recession). Keep in mind that pricing can fluctuate from month-to-month due to sampling size of data and seasonal buying patterns. The median price increased 1.7 percent from the prior month. This direction contrast with historical data (09-13) that reflects that the August sales price traditionally decrease from the month of July by 1.1 percent.

Supply: The statewide housing inventory in August was 33,561 units, a decrease of .6 percent from August 2013 and 20.4 percent below the month of August peak in 2007 (42,149 units). There was 8.1 months of housing supply (7 months considered equilibrium during month of August) in August 2014 versus 8.0 months of supply in August 2013, a 1.5 percent unfavorable increase. August inventory also decreased by 1.5 percent from the prior month. This direction contrast with historical data that indicates August inventory on average (09-13) traditionally increases from the month of July by 4.5 percent.

Demand: As anticipated, August statewide residential sales declined 5.4 percent from the prior month. This direction is consistent with seasonal trends & recent historical data that indicates August sales, on average (09-13), decrease from the month of July by 1.1 percent.

The fact that there are fewer distressed properties (attracting bargain hunting investors – typically cash buyers) changing hands when compared to last year has also narrowed the favorable percentage change associated with sales growth.

Seeking Balance: Six or 24 percent of local markets are considered near or in balance where buyer and seller enjoy equal bargaining power. More markets are inching closer so this is encouraging news.

In contrast to reports of lack of inventory at the national level, Alabama still has above the needed levels of supply in most local markets (13 of 25 markets or 52 percent still have 10+ months of supply) but the supply of “quality” inventory is limiting sales according to local professionals with boots on the ground. Only 12 of 25 or 48 percent of local markets have single-digit months of housing supply so this is an area where more reduction would be welcome news. Last month this figure stood at 44 percent. With that offered, metro markets representing 70 percent of statewide transactions, are edging closer and closer to equilibrium with 7.2 months of supply.

Industry Perspective: “The August National Housing Survey results lend support to our forecast that 2015 will likely not be a breakout year for housing,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The deterioration in consumer attitudes about the current home buying environment reflects a shift away from record home purchase affordability without enough momentum in consumer personal financial sentiment to compensate for it. To date, this year’s labor market strength has not translated into sufficient income gains to inspire confidence among consumers to purchase a home, even in the current favorable interest rate environment. Our third quarter Mortgage Lender Sentiment Survey results, to be released later this month, are expected to show whether mortgage demand from the lender perspective is in line with consumer housing sentiment.” For full report, go HERE.

This monthly report is provided compliments of the ACRE Corporate Cabinet. 

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Heritage Brook by Legacy Homes

Located on Old Railroad Bed Road just a mile north of Hwy 72 (University Drive) in Madison, Heritage Brook provides the best of both worlds. The private wooded lots, raised foundations and gently rolling topography provide an established neighborhood feel with brand new homes. This unique combination combined with the convenient proximity to Redstone Arsenal, Madison Hospital and The Shops of Madison; make Heritage Brook a natural choice for your new home.

Looking for a new home? I work with every builder in every new community and school district in Madison county.

Buy your new home with me and I’ll sell your current home for FREE!

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Kelly Cove Community by Woodland Homes

What Is Your Idea of Refuge, A Resort Or Home?
At Kelly Cove, We Say… Both!

This magnificent community features all of the amenities that have made Woodland Homes so popular with North Alabama home buyers.

Located in the heart of Monrovia, you will find the diamond we call Kelly Cove.  Part of the original Kelly Farm, Kelly Cove was master-planned to enhance the living experience from the moment you pass between the infinity waterfalls and begin to ride through the tree lined streets.  Featuring both side-sidewalks, underground utilities, public sewer and soft light lamp post, Kelly Cove “feels” like home.  Our new Amenity package featuring a Clubhouse with fireplace and full kitchen, workout facility with elliptical machines and LED TV’s on the walls, Outdoor grilling area, HUGE in-ground pool with Sprinkler Park for the children to enjoy will be opening 2nd Quarter 2015.  Kelly Cove also features a private stocked lake for our residents to enjoy a relaxing day of fishing.  Kelly Cove has it all…Great Location, Great Schools and Great Homes.  Stop by for a visit today and see why Kelly Cove is the fastest selling community in Monrovia.  Homes starting from the $290’s.

Looking for a new home? I work with every builder in every new community and school district in Madison county.

Buy your new home with me and I’ll sell your current home for FREE!

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