Alabama Real Estate Market: When will My Home Value Return?

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Alabama Real Estate Market: When will Home Values Return?

The state of the Alabama real estate market keeps pleasantly surprising many economists, but the impact of the oil spill has made many real estate experts uncertain about the remainder of 2010.

If you are questioning the value of your property, thus far, 2010 has looked strong in terms of real estate values and sales. In fact, home sales increased 6.5 percent in April and 23 percent in May when compared to last year’s numbers, according to the Alabama Center for Real Estate. As consumer confidence continues to rise and unemployment continues to fall, Alabama is expected to see gains in both sales and home values.

Home Vales Returning

According to the Case-Shiller price index, Alabama is expected to return to its 2007-2008 peak levels by 2013-2014, although Coastal Alabama homes sales and values will likely see negative fallout from the oil spill. The coastal area, which saw modest increases earlier this year, has thus far seen negative sales from the April 20 explosion and subsequent oil spill.

However, economists are quick to point out that, although the coastal area will experience a lull in home sales due to the oil spill, it is still too early to make long-term predictions. Statewide, residents can expect steady, albeit slow, improvements for the rest of 2010.

A 2010 forecast in year-over-year sales has Alabama seeing an increase of 3.5 to 5 percent.

Record-Low Foreclosures

There is still an inventory abundance in Alabama, and there are still plenty of foreclosed homes, both of which are adding to price declines. Overall, about 9.3 percent of Alabama mortgages are currently underwater, thereby presenting a problem for future foreclosures. It is important to point out, however, that this number is the lowest in the Southeast and far below the national average of 23.8 percent.

The low number of foreclosures indicates that home values in Alabama have not depreciated as much as the rest of the country, and that many residents in Alabama did not take out subprime mortgages. These numbers are a strong testament to Alabama’s strong housing market.

Historically, Alabama has always been a stable housing market, as it did not see a huge increase in prices like Florida, Arizona, Nevada and California, during the peak of the housing market in 2007-2008. In other words, when other housing bubbles burst, Alabama homeowners did not get pulled in with the rest of the country.

Overall, if you own an Alabama home, its value is expected to return to peak levels by 2013-2014. This swift return to home values can be attributed to a strong economy and low unemployment rates.


10 Largest Cities in Alabama

1. Birmingham 242,820   6. Hoover 62,742
2. Montgomery 201,568 7. Dothan 57,737
3. Mobile 198,915 8. Decatur 53,929
4. Huntsville 158,216 9. Auburn 42,987
5. Tuscaloosa 77,906 10. Gadsden 38,978

 

 

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