In a recent CoreLogic study of the housing market between 2012 and 2017, they wanted to investigate the state of the market since the end of the recession.
Chief Economist, Frank Nothaft, said “Greater demand and lower supply - as well as booming job market - have given some of the hardest-hit housing markets a boost in prices. Yet, many are still not back to pre-crash levels.”
As shown on the map, Alabama home price appreciation over the past 5 years has gone up between 20% to 39%. From my experience, I can tell you that houses are in high demand in the Birmingham market and some areas, houses do not go their first week on the market without getting an offer. In 2018, the average days on market for the Birmingham suburbs is 23 days, per MLS data.
So what does this mean for expected home prices? Pulsenomics has been working on the Home Price Expectation Survey (HPES) every quarter, and they are predicting between 27.4% and 8.3% appreciation in the next 5 years.
It’s not just housing prices that are rising right now, Freddie Mac is already predicting that the interest rates could increase to 5.1% in the next year, which could add tens of thousands of dollars to the eventual cost of the purchase of your home. With the current historically low-interest rates, locking yourself into a fixed rate mortgage will make that dream home, much more of a reality than it could be in 5 years.
If you have more questions about the current housing market in Birmingham, give me a call or make an appointment!
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