BIDDING WARS: Birmingham real estate market rises from the ashes
Like a phoenix rising from the ashes, Birmingham is making a comeback.
In the wake of the 2008 real estate crash, Birmingham lost more than 50,000 jobs. The 30 publicly traded companies that once called Birmingham home has dwindled down to 12. And five years ago, Jefferson County filed for bankruptcy.
But as anyone who has visited downtown or the surrounding suburbs recently can attest, Birmingham is reinventing itself. Downtown has slowly started to develop its luxury “rooftop residential” market – currently building 2,000 new lofts and high-end condos in the city. Other buildings like the old Pizitz department store are being renovated, and a Publix – the first full-scale grocery store since the 1960s – is set to open in December.
The growth of downtown has had a major effect on the rest of the city. For the real estate market, this means bidding wars, longer searches, and higher prices. Luxury houses like many of those in Mountain Brook, and homes in other perimeter neighborhoods like Homewood and Redmont Park are especially sought after.
“I’ve got far more buyers on hand than sellers right now,” Brian Boehm, a RealtySouth agent, told the Wall St. Journal. “It’s not uncommon in this market to see multiple offers pushing a sale above list price.”
But many new homebuyers aren’t always looking for the biggest or newest house. The Conroys, a family from Brooklyn, New York, moved to Birmingham in 2013 when Mr. Conroy took a job here. The family lost three houses due to bidding wars, but soon found a house built in the 1940s that had recently been renovated. The house was significantly smaller than others they had seen, but the Conroys were quite happy with their new three-bedroom, 2 ½-bath home.
“Younger buyers aren’t really interested in buying the biggest house their money can buy,” said Boehm. “They want economical living that’s not overblown.”
Of course that means some of the bigger luxury homes stay on the market longer. One such house is a 2-acre, four-bedroom, 5 ½-bath estate in Mountain Brook that has been on and off the market since 2012. The house is currently listed for $2.695 million, which the owner believes is at least $1 million short of what he could have sold it for before the market crash.
The average listing for Birmingham homes in the $800,000+ category was $1.1 million in 2015. That same group was averaged at $1.2 million in 2007, according to the Greater Alabama Multiple Listing Service. That gap might be bigger if the current inventory was not so small. There were 639 listings in this category in 2007 compared to 450 in 2015.
Regardless of price, many new homeowners today want to be close to the action.
“The trend of today is that everyone seems to want to be close in,” said Stephanie Robinson, a RealtySouth agent. “They want to walk to coffee, walk to dinner. They also want to be able to move their clothes and their furniture in and be done. There’s only a certain amount of real estate that falls into that category.”
This is good news for neighborhoods within walking distance to popular areas like English Village, Crestline Village, and Mountain Brook Village. But that also makes higher prices and intense bidding wars more likely in those areas. Those who are willing to venture out and live farther away can usually find better deals. Families that pay less for a house farther away from downtown can have more money to spend on renovations.
The housing market and financial crash of 2008 was damaging to Birmingham. But those who have lived here for a long time and those that are just now moving to town can see that Birmingham is in the middle of a renaissance and the magic is returning to the Magic City.