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Photo by Erin Nelson.
New homes under construction on Broadway Street in Homewood on Feb. 8.
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Photos by Erin Nelson.
New homes under construction on Edgewood Boulevard in Homewood on Feb. 8.
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Photos by Erin Nelson.
New homes under construction on Broadway Street in Homewood on Feb. 8.
Home sales decreased last year in the city of Homewood, according to data from the Greater Alabama Multiple Listing Service.
There were 374 existing homes sold, with seven new homes sold. That’s down from 464 existing homes and 13 new homes sold in 2021, according to the data.
The total number of homes sold was at its lowest point in at least five years. Homewood had between 450 and 495 homes sold from 2018 to 2021.
With a lower number of homes came another increase in average home prices. The average home price for the city was about $535,000, with existing homes averaging $523,000 and the seven new homes averaging $1.1 million.
The average price of a home in Homewood has increased each year since at least 2018, when it was about $394,000.
While the price has gone up, square footage has remained about the same. In 2018, the average square footage of a home in Homewood was about 1,990 square feet. 2020 was the highest average of square footage, reaching just under 2,100 square feet. Last year, the average home sold was just under 2,000 square feet.
However, new homes being built have averaged more than 3,000 square feet since at least 2018, according to MLS data.
MLS data also measures the monthly supply of homes in each city, and Homewood has no supply of new homes, with so few built last year. There is just under a month’s supply of existing homes, with 26 homes on the market as of Jan. 10. Eleven homes were pending.
William Siegel with Twin Construction said he is seeing “zero slow down” in any part of the market. The Edgewood neighborhood, in which Siegel lives, has been especially popular, he said.
“It’s a great spot to live,” Siegel said.
While there is much thought that there is a market-wide slow down, Siegel said he isn’t seeing that. Most new construction in the city involves teardowns and rebuilds rather than empty lots, he said. His group has also seen a lot of major renovations, he said.
Mortgage rates have not been a problem in Homewood, despite their upward trend since the COVID-19 pandemic, Siegel said.
The average interest rate for a 30-year fixed mortgage had fallen below 3% after the COVID-19 pandemic hit, dropping as low as 2.65% in January 2021. That was the lowest rate in history and encouraged many people to move or build because they could borrow money at a lesser price and afford a bigger house.
But the Federal Reserve steadily raised short-term interest rates throughout 2022 in an effort to control inflation. The result was that the average 30-year mortgage rate edged up from 2.75% in December 2021 to 4% in March, 5.25% in May and 7% in October, according to Freddie Mac. The Federal Reserve lists the current interest rate in the U.S. at 4.5%.
Siegel said most people are able to get what they want as far as layout. In Homewood, that typically means four bedrooms with 3.5 baths, Siegel said.
The market is still a seller’s market with low inventory, Siegel said, with a majority of sales coming from Edgewood, though he is hopeful that West Homewood can see more sales as well.
Realtor Julie White echoed Siegel’s comments that inventory is indeed low. Because of that, homes are selling “pretty quickly,” White said, and she expects to see more of the same in the coming months.
Realtors Katie and Gusty Gulas said they are seeing homes flying off the market once they are posted. The median time a home has spent on the market was three days, Gusty Gulas said.
The overall market is healthy, Katie Gulas said.
“I believe our interest rates are continuing to come down from November highs,” she said.
White added that out of the 11 homes she sold in January, only one went for under the asking price.
Housing costs have gone up, White said, pricing some people out of the market. Those looking for homes under $400,000 have begun to look to Shelby County or other areas in Jefferson County, such as Irondale.
It is definitely a seller’s market, White said. She said there has not been a better time in recent memory for those looking to sell their home.
However, with mortgage rates increasing, those who do not have to move may not move, including those who refinanced several years ago when mortgage rates were lower, White said. With higher mortgage rates comes lower buying power, she said.
Those looking to upgrade their homes may have to choose between making renovations or moving, White said.
“You want your home to be your home and be reflective of you and your lifestyle,” White said.
West Homewood is growing, though the homes in that area are smaller, White said. Edgewood remains very popular, she said.
“Homewood’s just a place that everyone wants,” White said.
Katie Gulas said living in Edgewood, she understands the reason people want to live there and in Homewood in general. There is close proximity to downtown Birmingham, a nice atmosphere, coffee shops, bookstores and an ability to “entertain kids without a car.”
“That’s what a lot of the buyers are looking for,” she said.
– Community Editor Leah Eagle contributed to this story.
