Birmingham Real Estate Market Update: First Quarter 2024 vs 2023
The first quarter of 2024 is now under our belts so this week I’ll be taking a look at how Q1 of 2024 compared to Q1 of 2023. The big story for 2024 is interest rates, and as of the writing of this post, rates have been in the 6-7% range for approximately 20 weeks.
Most believed that going into 2024 we would have seen rate drops before now, however, this has not happened. As you might expect this has had a noticeable impact on home sales. Of course, real estate is location specific and certain areas may be doing better than others.
Historically speaking, an interest rate in the 6% range is not too bad, however, when you compare it to what we had 2-3 years ago they have almost doubled. Buyers got used to the lower-than-normal rates and when they compare them to what we have now it causes them to pause because the increase has cut into their buying power.
Today we’re going to be taking a look at the Birmingham Metro area, including Jefferson and Shelby County. We’ll take a look a what the impact of current interest rates has been on home sales for the local market in the first quarter of 2024.
Jefferson County Insights: Q1-2024
Let’s kick off our analysis by delving into the housing statistics for Jefferson County in the first quarter of 2024. Here’s a snapshot of the key trends:
1. Price Dynamics: Median Sold Price: We observed a notable uptick of 5.05% in the median sold price, climbing from $247,500 in Q1-2023 to $260,000 in Q1-2024.
Average Sold Price: Similarly, the average sold price experienced a robust increase of 11.05%, soaring from $302,778 to $336,237 during the same period.
2. Price per Square Foot: The price per square foot metrics also showed healthy growth, with the average price per square foot rising by 7.14% and the median price per square foot increasing by 3.65%.
3. Sales Activity: Despite the positive price trends, Jefferson County witnessed a slight decline of -6.68% in the number of sales, indicating a modest decrease in market activity compared to the previous year. As I noted previously interest rates could be the culprit here.
4. Days on Market: Properties took a tad longer to sell, with the average days on market increasing by 8.70% and the median days on the market rising by 13.64%.
5. Sale Price Negotiation: Sellers maintained a stable position in negotiations, with the average sale price to list price ratio (SP/LP) remaining constant at 97%.
6. Cash Sales Percentage: Notably, the percentage of cash sales saw a significant increase of 10.71%, signaling potential shifts in financing dynamics within the market.
Shelby County Insights: Q1-2024
Now, let’s turn our attention to Shelby County and dissect the housing trends for the first quarter of 2024:
1. Price Dynamics: Shelby County experienced moderate growth in both median and average sold prices, with increases of 2.90% and 6.42%, respectively. The average stat is typically higher because it is influenced more by the highs and lows compared to the median price.
2. Price per Square Foot: Positive trends were observed in the price per square foot metrics, with both the average and median price per square foot registering gains at 4.24% and 5% respectively.
3. Sales Activity: Shelby County saw a modest uptick of 1.85% in the number of sales, indicating continued activity and demand in the market.
4. Days on Market: Properties in Shelby County spent slightly more time on the market, with increases in both average and median days on market. Average days on market increased by 14.55% and median by 24%
5. Sale Price Negotiation: Sellers experienced favorable negotiations, with the average sale price to list price ratio remaining steady at 99%.
6. Cash Sales Percentage: Interestingly, Shelby County witnessed a slight decrease in the percentage of cash sales of 4.76%.
A Closer Look at March’s Numbers
Jefferson County
In March 2024, the median sold price in Jefferson County experienced a notable increase of 7.84%, climbing from $255,000 to $275,000 compared to the same period last year. This upward trajectory was mirrored in the average selling price, which saw a significant rise of 14.88%, jumping from $317,646 to $364,919.
Diving into the price per square foot metrics, positive movements were evident. The average price per square foot surged by 11.89%, from $143 to $160, while the median price per square foot also saw a healthy gain of 7.91%, rising from $139 to $150.
However, amidst these favorable price trends, there was a decline in sales activity. The number of sales in Jefferson County decreased by 15.80%, from 747 transactions in March 2023 to 629 transactions in March 2024.
Properties also spent slightly more time on the market, with the average days on market increasing by 6.67%, from 45 to 48 days. Interestingly, the median days on market remained steady at 18 days, indicating a stable timeframe that properties were available for sale.
Despite these shifts, sellers maintained a consistent position in negotiations, with the average sale price to list price ratio (SP/LP) remaining unchanged at 98%. Similarly, the percentage of cash sales held steady at 27%.
Shelby County
In March 2024, Shelby County witnessed a slight decrease in the median sold price, dipping by 2.78% from $359,900 to $349,900 compared to the same period last year. Despite this, the average sold price saw a modest increase of 1.78%, rising from $418,646 to $426,107.
Looking at the price per square foot metrics, positive movements were observed. The average price per square foot saw a rise of 3.59%, climbing from $167 to $173, while the median price per square foot experienced a larger increase of 4.97%, reaching $169 from $161.
Like Jefferson County, there was a slight downturn in sales activity, with the number of sales decreasing by 3.32% from 301 transactions in March 2023 to 291 transactions in March 2024.
Properties in Shelby County spent slightly more time on the market, with both the average and median days on market increasing by 5.45% and 5.00%, respectively. Despite this, the average sale price to list price ratio (SP/LP) saw a positive shift, increasing by 1.01% to reach 100%.
Interestingly, the percentage of cash sales in Shelby County experienced a slight increase of 5.56%, rising from 18% to 19%.
These statistics show that while the Jefferson and Shelby County markets are considered one and the same, there are slight variations between the two. This reinforces the idea that markets are location specific and in order to gain a solid understanding of what is happening you must drill down to your specific area.
We may read about what the housing market is doing on a national, state, or city level, however, in order to make more accurate pricing decisions for individual properties we need to drill down and analyze the numbers on a neighborhood level. We only gain an accurate understanding of the market when we undertake this process.
Conclusion:
As we navigate through the uncertainties of 2024, one thing remains certain: the Birmingham real estate market is dynamic and ever-evolving. By closely monitoring key indicators and trends, both buyers and sellers can make informed decisions.
Got questions about the current state of the Birmingham real estate market? Don’t hesitate to reach out! As always, thanks for reading!
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Love seeing the stats. My market in Sacramento is similar in terms of prices being up, but days on market went down for us this year. Also, very slightly more sales during the first quarter. Thanks Tom.
Thanks, Ryan. It is interesting to see the similarities between different areas of the country. Appreciate seeing your housing reports as well for the Sacramento market.