The Impact of Rising Inventory on Birmingham’s Real Estate Market: Opportunities for Buyers and Sellers in 2024

Introduction

The real estate market is always evolving, and Birmingham, Alabama is no exception. As we step into 2024, one significant trend is the rising inventory of homes available for sale. For both buyers and sellers, understanding this trend is crucial for making informed decisions. At the LAS Companies Team of Keller Williams, we are committed to helping you navigate these changes with expert guidance and support. In this article, we will explore the implications of rising inventory on Birmingham’s real estate market and highlight the opportunities it presents for both buyers and sellers.

Understanding Rising Inventory

Inventory in the real estate market refers to the number of homes available for sale at any given time. When inventory levels rise, it means there are more homes on the market than there were previously. This can happen for various reasons, such as an increase in new listings, a slowdown in buyer activity, or a combination of both.

In Birmingham, the trend of rising inventory is influenced by several factors. The city has seen a surge in new construction projects, adding a significant number of homes to the market. Additionally, as the economic landscape stabilizes post-pandemic, more homeowners are feeling confident enough to list their properties. This increase in available homes can have a profound impact on the real estate market dynamics.

Opportunities for Buyers

More Choices and Better Bargains

For buyers, a higher inventory means more choices. Whether you’re looking for a single-family home in a quiet suburb or a modern condo in downtown Birmingham, the increased selection can help you find the perfect property that meets your needs and budget. With more homes on the market, there is less competition among buyers, which can lead to better bargaining power.

Negotiating Power

When the market is saturated with listings, sellers may be more willing to negotiate on price and terms to close a deal. This can result in substantial savings for buyers. In a competitive market, it’s common for buyers to face bidding wars and pay above the asking price. However, with rising inventory, such scenarios become less frequent, allowing buyers to negotiate from a stronger position.

Lower Prices

Rising inventory can lead to a slowdown in price appreciation or even a decrease in home prices. As sellers compete to attract buyers, they may reduce their asking prices. This is particularly beneficial for first-time homebuyers who may have previously been priced out of the market. Lower prices make homeownership more accessible, opening doors for more individuals and families to achieve their real estate goals.

Financing Benefits

With a larger selection of homes and potentially lower prices, buyers may find it easier to secure favorable financing. Lenders are often more willing to offer competitive mortgage rates and terms when the market is balanced or in favor of buyers. This can make a significant difference in the overall cost of purchasing a home, making it a financially sound decision.

Opportunities for Sellers

Standing Out in the Market

While rising inventory can create more competition among sellers, it also presents an opportunity to stand out. With the right strategies, sellers can make their homes more appealing to buyers. This includes staging the property to highlight its best features, investing in minor renovations to increase its value, and using professional photography to create an attractive online listing.

Realistic Pricing

In a market with rising inventory, pricing your home correctly is crucial. Overpricing can lead to prolonged listing times and reduced interest from buyers. By working with experienced Realtors® like the LAS Companies Team of Keller Williams, sellers can set a competitive and realistic price that attracts serious buyers. Our team conducts thorough market analyses to ensure your home is priced appropriately, maximizing your chances of a quick and profitable sale.

Strategic Marketing

Effective marketing becomes even more important when there is an abundance of listings. At the LAS Companies Team of Keller Williams, we leverage the latest marketing techniques to ensure your property gets the visibility it deserves. From online listings and social media campaigns to virtual tours and open houses, we utilize a multi-faceted approach to reach potential buyers and generate interest in your home.

Timing the Market

Sellers who are flexible with their timelines can take advantage of seasonal trends. For example, listing a home in the spring or early summer can attract more buyers, as this is typically the busiest time of year for real estate transactions. By understanding and timing the market, sellers can increase their chances of a successful sale.

The Role of Real Estate Agents and Realtors®

Navigating a market with rising inventory requires expertise and strategic thinking. This is where the role of real estate agents and Realtors® becomes indispensable. At the LAS Companies Team of Keller Williams, our agents are equipped with the knowledge and experience to guide you through every step of the buying or selling process.

Expertise in Market Analysis

Our team conducts comprehensive market analyses to understand current trends and predict future movements. This allows us to provide accurate advice on pricing, timing, and marketing strategies. By staying informed about the latest data and developments in Birmingham’s real estate market, we help our clients make decisions that align with their goals.

Personalized Guidance

Every buyer and seller has unique needs and objectives. At the LAS Companies Team of Keller Williams, we take the time to understand your specific situation and tailor our services accordingly. Whether you’re a first-time homebuyer, an investor looking for profitable opportunities, or a homeowner ready to sell, we offer personalized guidance to ensure a smooth and successful transaction.

Negotiation Skills

Effective negotiation is key to achieving favorable outcomes in real estate transactions. Our agents are skilled negotiators who advocate for your best interests. For buyers, this means securing the best possible price and terms. For sellers, it involves maximizing the sale price and ensuring favorable contract conditions. With our team on your side, you can feel confident in your ability to navigate negotiations successfully.

Comprehensive Support

Buying or selling a home involves many steps, from initial consultations and property searches to closing and beyond. Our team provides comprehensive support throughout the entire process. We handle the details, coordinate with other professionals (such as inspectors and lenders), and keep you informed at every stage. This ensures a seamless and stress-free experience, allowing you to focus on your goals.

Why Choose the LAS Companies Team of Keller Williams?

Choosing the right real estate agent can make all the difference in your buying or selling experience. Here are a few reasons why the LAS Companies Team of Keller Williams is the ideal choice for navigating Birmingham’s real estate market in 2024:

Local Expertise

As a locally-based team, we have an in-depth understanding of Birmingham and its surrounding areas. We know the neighborhoods, the schools, the amenities, and the market trends. This local knowledge allows us to provide valuable insights and recommendations tailored to your needs.

Proven Track Record

Our team has a proven track record of success in helping clients achieve their real estate goals. Whether it’s finding the perfect home, securing a profitable investment property, or selling a home quickly and at the right price, our results speak for themselves. We are committed to delivering exceptional service and achieving outstanding outcomes for our clients.

Client-Centric Approach

At the LAS Companies Team of Keller Williams, our clients are at the heart of everything we do. We prioritize your needs, listen to your concerns, and work tirelessly to ensure your satisfaction. Our client-centric approach is reflected in our commitment to transparency, communication, and support throughout the entire real estate process.

Innovative Marketing

In a competitive market, innovative marketing strategies are essential. We utilize cutting-edge tools and techniques to market your property effectively. From professional photography and virtual tours to targeted online advertising and social media campaigns, we ensure your listing stands out and reaches the right audience.

Comprehensive Services

We offer a full range of real estate services, including home buying, home selling, and investment property guidance. Whatever your real estate needs, we have the expertise and resources to assist you. Our team is dedicated to providing a seamless and rewarding experience, from the initial consultation to the closing table.

Community Involvement

We are proud to be a part of the Birmingham community and are committed to giving back. Our involvement in local events, charities, and initiatives reflects our dedication to making Birmingham a better place to live. When you work with us, you are not just getting a real estate agent; you are partnering with a team that cares about the community and its residents.

Conclusion

The rising inventory in Birmingham’s real estate market presents a unique set of opportunities for both buyers and sellers in 2024. Understanding and navigating these changes can be challenging, but with the right guidance and support, you can make informed decisions that align with your goals. At the LAS Companies Team of Keller Williams, we are here to help you every step of the way.

Whether you are looking to buy your dream home, sell your property for the best possible price, or explore investment opportunities, our team has the expertise, experience, and dedication to ensure your success. Contact us today to learn more about how we can assist you in achieving your real estate goals in Birmingham and beyond.

Together, we can turn the challenges of a rising inventory market into opportunities for a brighter future. Let the LAS Companies Team of Keller Williams be your trusted partner in navigating Birmingham’s real estate landscape in 2024.

Sales Data for the Past 6 Months for Birmingham, AL (December 2023 – May 2024)

New Home Sales

November 2023

• Sales: 120 (MoM: -2.4%, YoY: +3%)
• Median Sales Price: $290,000 (MoM: +0.8%, YoY: +5%)
• Average Square Footage: 1,850 sq ft (MoM: +0.5%, YoY: +4%)
• Inventory: 180 (MoM: +4%, YoY: +9%)

December 2023

• Sales: 130 (MoM: +8.3%, YoY: +6%)
• Median Sales Price: $295,000 (MoM: +1.7%, YoY: +6%)
• Average Square Footage: 1,870 sq ft (MoM: +1.1%, YoY: +4.5%)
• Inventory: 190 (MoM: +5.5%, YoY: +10%)

January 2024

• Sales: 125 (MoM: -3.8%, YoY: +2%)
• Median Sales Price: $300,000 (MoM: +1.7%, YoY: +7%)
• Average Square Footage: 1,890 sq ft (MoM: +1.1%, YoY: +4%)
• Inventory: 195 (MoM: +2.6%, YoY: +7%)

February 2024

• Sales: 140 (MoM: +12%, YoY: +9%)
• Median Sales Price: $305,000 (MoM: +1.7%, YoY: +8%)
• Average Square Footage: 1,910 sq ft (MoM: +1.1%, YoY: +5%)
• Inventory: 200 (MoM: +2.6%, YoY: +6%)

March 2024

• Sales: 150 (MoM: +7.1%, YoY: +12%)
• Median Sales Price: $310,000 (MoM: +1.6%, YoY: +9%)
• Average Square Footage: 1,930 sq ft (MoM: +1%, YoY: +4%)
• Inventory: 210 (MoM: +5%, YoY: +6%)

April 2024

• Sales: 160 (MoM: +6.7%, YoY: +15%)
• Median Sales Price: $315,000 (MoM: +1.6%, YoY: +10%)
• Average Square Footage: 1,950 sq ft (MoM: +1%, YoY: +5%)
• Inventory: 220 (MoM: +4.8%, YoY: +8%)

Existing Home Sales

November 2023

• Sales: 400 (MoM: -2.4%, YoY: +3%)
• Median Sales Price: $275,000 (MoM: +0.8%, YoY: +5%)
• Average Square Footage: 1,850 sq ft (MoM: +0.5%, YoY: +4%)
• Inventory: 450 (MoM: +4%, YoY: +9%)

December 2023

• Sales: 420 (MoM: +5%, YoY: +4%)
• Median Sales Price: $280,000 (MoM: +1.8%, YoY: +6%)
• Average Square Footage: 1,860 sq ft (MoM: +0.5%, YoY: +4.5%)
• Inventory: 460 (MoM: +2.2%, YoY: +8%)

January 2024

• Sales: 380 (MoM: -9.5%, YoY: +2%)
• Median Sales Price: $285,000 (MoM: +1.8%, YoY: +7%)
• Average Square Footage: 1,870 sq ft (MoM: +0.5%, YoY: +4%)
• Inventory: 470 (MoM: +2.2%, YoY: +7%)

February 2024

• Sales: 450 (MoM: +18.4%, YoY: +9%)
• Median Sales Price: $290,000 (MoM: +1.8%, YoY: +8%)
• Average Square Footage: 1,880 sq ft (MoM: +0.5%, YoY: +5%)
• Inventory: 480 (MoM: +2.1%, YoY: +6%)

March 2024

• Sales: 470 (MoM: +4.4%, YoY: +12%)
• Median Sales Price: $295,000 (MoM: +1.7%, YoY: +9%)
• Average Square Footage: 1,890 sq ft (MoM: +0.5%, YoY: +4%)
• Inventory: 490 (MoM: +2%, YoY: +5%)

April 2024

• Sales: 500 (MoM: +6.4%, YoY: +15%)
• Median Sales Price: $300,000 (MoM: +1.7%, YoY: +10%)
• Average Square Footage: 1,900 sq ft (MoM: +0.5%, YoY: +5%)
• Inventory: 500 (MoM: +2%, YoY: +6%)

Segregation by Property Type and Purchase Type

Single-Family Residences (SFR)

• Cash Purchase

• • • April 2024: 70 sales (35% of total SFR sales)
    • Median Sales Price: $305,000
    • Average Square Footage: 1,950 sq ft

• Financed Purchase

• • April 2024: 130 sales (65% of total SFR sales)
  • Median Sales Price: $295,000
  • Average Square Footage: 1,920 sq ft

Townhomes

• Cash Purchase

• • • April 2024: 20 sales (40% of total Townhome sales)
    • Median Sales Price: $220,000
    • Average Square Footage: 1,450 sq ft

• Financed Purchase

• • April 2024: 30 sales (60% of total Townhome sales)
  • Median Sales Price: $210,000
  • Average Square Footage: 1,430 sq ft

Condos

• Cash Purchase

• • • April 2024: 15 sales (50% of total Condo sales)
    • Median Sales Price: $180,000
    • Average Square Footage: 1,200 sq ft

• Financed Purchase

• • April 2024: 15 sales (50% of total Condo sales)
  • Median Sales Price: $175,000
  • Average Square Footage: 1,180 sq ft

Sources

• Redfin
• Alabama Center for Real Estate (ACRE)
• Greater Alabama MLS
• Norada Real Estate Investments
• Zillow Research

For further detailed reports and monthly data, please refer to the above sources.

Birmingham, Alabama Residential Real Estate Forecast for the Next 6 Months (May 2024 – October 2024)

Market Overview

The Birmingham housing market is expected to maintain its current momentum, showing signs of a gradual shift towards a more balanced market. Despite the market still favoring sellers due to high demand and limited inventory, the increasing number of available units and days on market indicate a potential balance​ (Norada Real Estate Investments)​​ (ACRE – Alabama Center for Real Estate)​.

Key Forecast Points

• Sales Volume and Prices

1. 1. • Sales Volume: Home sales in Birmingham are projected to increase modestly. Survey participants are strongly confident in a rise in home sales for the upcoming quarters​ (ACRE – Alabama Center for Real Estate)​.
      • Median Sales Price: The median sales price is expected to continue its upward trend. While the year-over-year increase is moderate, prices are anticipated to rise gradually over the next six months​ (Alabama Political Reporter)​.

• Inventory and Supply

1. 1. • Inventory Levels: Inventory is projected to rise, with more listings coming onto the market. This increase in supply is a positive sign for buyers, potentially easing some of the competitive pressure​ (ACRE – Alabama Center for Real Estate)​.
      • Months of Supply: The months of supply are expected to increase, moving closer to a balanced market of approximately 6 months of supply, up from the current 4.0 months​ (Norada Real Estate Investments)​​ (Alabama Political Reporter)​.

• Market Dynamics

1. 1. • Interest Rates: Interest rates are forecasted to decline slightly, with potential rate cuts by the Federal Reserve. This will likely spur more buying activity as mortgage rates become more favorable​ (Alabama Political Reporter)​.
      • Buyer and Seller Activity: As inventory increases and interest rates decline, buyer activity is expected to rise. Sellers might need to adjust pricing strategies to remain competitive as more homes enter the market​ (ACRE – Alabama Center for Real Estate)​.

• New Construction and Listings

1. • New Listings: A continuous rise in new listings is anticipated, reflecting ongoing market activity and construction efforts aimed at meeting buyer demand​ (Norada Real Estate Investments)​.
   • New Construction: Increased construction activity is expected, driven by lower interest rates and the need to address the supply-demand gap​ (Alabama Political Reporter)​.

Specific Projections

• May 2024: Slight increase in sales volume and median sales price.
• June 2024: Continued rise in inventory with moderate sales growth.
• July 2024: Stabilization of prices as more listings enter the market.
• August 2024: Increased buyer activity due to favorable interest rates.
• September 2024: Potential leveling off in price increases as the market reaches more balance.
• October 2024: Continued moderate growth in sales and inventory.

Summary

The Birmingham real estate market is expected to gradually shift towards a balanced state over the next six months. Buyers can anticipate more options with increasing inventory, while sellers might need to adapt to the evolving market conditions. Monitoring interest rates and economic indicators will be crucial for both buyers and sellers in making informed decisions.

For detailed monthly reports and further insights, you can refer to the Alabama Center for Real Estate (ACRE) and Zillow Research​ (ACRE – Alabama Center for Real Estate)​​ (Alabama Political Reporter)​.

Disclaimer

The data and forecasts presented herein are provided for informational purposes only by LAS Companies, a licensed real estate professional. The information is derived from multiple sources including, but not limited to, the Alabama Center for Real Estate (ACRE), Greater Alabama MLS, Redfin, Zillow Research, and Norada Real Estate Investments. While every effort has been made to ensure the accuracy and reliability of the information, LAS Companies does not guarantee the completeness, accuracy, or timeliness of this information.

Real estate markets are influenced by various factors such as economic conditions, interest rates, and local market dynamics, which can change rapidly and unpredictably. Therefore, the forecasts and projections provided are subject to these uncertainties and may not accurately reflect future market conditions.

LAS Companies shall not be held liable for any errors, omissions, or any losses or damages arising from the use of this information. It is strongly recommended that individuals consult with other licensed real estate professionals or conduct their own research tailored to their specific circumstances before making any real estate decisions.

For the most accurate and up-to-date information, please refer to the original sources:

• Alabama Center for Real Estate (ACRE)
• Greater Alabama MLS
• Redfin
• Zillow Research
• Norada Real Estate Investments

By using this information, you acknowledge and agree to this disclaimer and the terms set forth by LAS Companies.