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Bidding Wars Are Back
In primary resident areas like Birmingham, Nashville or Atlanta bidding wars have been a thing again for a little while now. In the second home market on 30A we are still seeing days on market, but less. A multimillion dollar second home is not a need quite like a primary residence. Also assets are appreciating and often paid off in the second home market, so there is not the same urgency to sell. Another point is many of the second homes are income producing, so again days on market are okay.
When I graduated college shortly after the worst of the depression around 80 percent of my graduating class was moving back home with their parents. A restricted economy with housing and banking at the center left a void that would eventually need to be filled. As the economy ramped back up supply was down and demand started creeping up. Simple economics say prices go up. Much of the builders and labor force had found new jobs, other than building, out of necessity which left supply down with labor force issues. Large national home builders weathered the storm better than your local builders in many cases and were the ones who filled the void. Especially in the sand states that were hit the hardest. Publicly traded companies who could issue stock and paper did, while banks were still restrictive on acquisition and development loans in the private market. In many areas and many cases national home builders pulled the bulk of the vacant lots off the market for less than what they originally cost to develop.
Interest rates are still historically low but increasing. This increase is pushing buyers who were on the fence to go ahead and purchase. Money is easy again and unemployment is down. People who have been renting are now first time home buyers. The people in starter homes are moving up. Companies are relocating employees. Also some people are downsizing, and the cycle goes on.
Lets take a quick look at some of the current statistics on 30A. Inventory is lower, prices are up and days on market are trending down in appropriately priced homes. Again some homes are paid off, getting income, and appreciating and sellers are okay being priced wrong and seeing days on market.
Information is deemed to be reliable but not guaranteed, or something like that. So you can see in these neighborhoods over the past year, over 100 days on market is the average. Also still seeing closings at a price negotiated to about 5% of the listing price looking at the averages. Thats not to say if you pick out a home you have 150 days to put in an offer or that it could be had for 5% less than list. These are just averages and every home is its own unique case. Anyways to search homes you can click any of the links above or go to J30A.com.
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Jonathan grew up in Birmingham, Alabama and vacationed from 30A to Destin every time he got a chance while growing up. He attended The University of Alabama where he double majored in finance and busi....