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Answers to 3 common questions about the Gulf Coast's historic sellers' market
Have you read an article about real estate lately? Hopefully, the answer is yes because you've been reading this blog. Even if that isn't the case, you probably have seen real estate making headlines. Why? The market is hot.
A culmination of record-low interest rates and delayed sales due to COVID-19 created a strong demand for homes. As the laws of supply and demand dictate, an increase in demand for homes to purchase without an immediate increase in supply caused home prices to increase.
In Baldwin County, the average sales price has risen by more than $110,000 from January 2019 to December 2021. Same is true in Mobile County. The average sales price has also risen by more than $68,000 from January 2019 to December 2021, according to stats from the Alabama Center for Real Estate.
Even with interest rates on the rise and experts varying on the actual percentage home prices will appreciate, swinging anywhere from 16.2 percent to 2.9 percent, according to Market Watch, they all agree homes will continue to appreciate, just more modestly than we've seen in the past couple of years.
The historic sellers' market has understandably created questions. Here are answers to a few of the most common ones.
Is there a housing bubble that's going to pop soon?
Of course, no one has a crystal ball, but the factors that influenced the housing crisis in the mid-2000s don't appear to be at play now. Fewer distressed home sales, fewer adjustable rate mortgages (ARMs) and fewer people cashing out their home equity all point to something much different than we saw in 2008. While ARMs might rise in popularity as interest rates rise, the market isn't being artificially inflated by unqualified borrowers as it was prior to the last bubble bursting.
Can I list my house at whatever price I want because the market is so good?
Even with an increase in prices, you need an expert to help you price your home effectively. Overpricing your listing is definitely possible and will cause it to sit on the market longer by deterring potential buyers at lower price points. Remember, multiple offer situations are common in today's market and will likely drive up the price above asking. Pricing your home effectively gives your listing the best chance at attracting the most potential buyers — and selling for top dollar.
Can I actually find a new home along the Gulf Coast if I decide to sell mine?
The market is undeniably tight right now. As we just said, many houses that go on the market have multiple offers within a few days of being listed. However, that doesn't mean there aren't houses available. In fact, in Baldwin County, 11,267 listings were sold compared to 7,981 in 2020 and 7,994 in 2019, according to data interpreted from Baldwin REALTORS®. Mobile also saw more homes sold last year than in the previous two. In 2021, 7,165 listings were sold compared to 6,231 in 2020 and 5,509 in 2019, according to data interpreted from the Gulf Coast MLS. More listings are being placed on the market than prior to the pandemic. Yes, there is an increase in the number of people looking for homes, but there are homes out there. Thousands of people found theirs in Baldwin and Mobile counties last year. You can find yours, too.
Each home and each person's situation is different though, which is why it's important to consult a real estate expert. A licensed REALTOR® will be able to help you determine if making a move is in your best financial interests and give you a realistic idea of what entering today's real estate market will entail.
