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What you need to know about the Gulf Coast real estate market
Sometimes no amount of planning would have improved a situation. We've all been there. Life happens, and sometimes you must roll with the punches. But buying or selling a home shouldn't ever feel like one of those times. While the circumstances surrounding why you need to buy or sell a property may be out of your control, with the help of a REALTOR®, you have the ability to make a plan with expert advice and experience on your side.
The job of a REALTOR®, a member of the National Association of REALTORS® who is held to a Code of Ethics and Standards of Practice, centers on providing you with the information needed to make decisions for your unique situation. Your best bet when considering anything real estate related is to reach out. Even if you're not in the market, a REALTOR® will be able to answer your questions.
With that in mind, the shifting marketing along Alabama's Gulf Coast has raised several important questions whether you're a buyer or a seller. From interest rates to whether bidding wars are still as common as they were during the pandemic, see below for answers you may need to make your next move.
Can you afford a new home?
Ultimately if you need a mortgage to purchase a home, only you and your mortgage lender would be able to definitively answer that question, but you do have options to consider. How long would you be planning to stay in your new home? The answer to that question can help you determine the breakeven point to consider whether buying down your mortgage rate might make purchasing a home more affordable long term. Other considerations include how much you would need to borrow and whether mortgage insurance, typically required for down payments less than 20 percent of the home's purchase price, would be necessary as well as how quickly you may be able to have it removed. Reaching a certain loan-to value ratio on your mortgage balance or when you reach a certain amount of home equity may qualify you to have it removed, saving you hundreds of dollars a month.
Is this a buyers' or a sellers' market?
Real estate markets are hyperlocal, which is why, we breakdown the market by area and price point in Vital Signs. Overall, Alabama's Gulf Coast is still technically a sellers' market with a majority of markets experiencing less than a six months' supply of inventory, but you'll notice more balanced and buyers' markets appearing than you saw at the beginning of this year and even the beginning of the summer, which means your particular market might not be a sellers' market.
The type of market is determined by the absorption rate, the number of months it would take to sell every home on the market in a particular price range if no others were added. In a sellers' market, the absorption rate will fall below six months of supply, and in a buyers' market, it will jump above six months of supply. The market is shifting back to pre-pandemic levels, so it's actively fluctuating. A real estate agent can provide you with more updated, specific information to your property.
Do you have the ability to negotiate terms?
Regardless of whether your area is technically a buyers' or sellers' market, absorption rates are much closer to balanced than we've seen in previous years, meaning no party has a clear advantage. This allows for the desirability of the property and situations of the parties involved to have more of an impact on negotiations than perhaps in previous years. If the bidding wars and frenzied pace of the real estate market these past few years kept you from a making a move, this might be the market for you.
