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CEO OF HUNTSVILLE´S ASSOCIATION OF REALTORS ANSWERS 10 PRIME QUESTIONS ABOUT REAL ESTATE IN HUNTSVILLE & MADISON ALABAMA
Found this inside the Huntsville Times Newspaper. Check out what this guy has to say about the development in Huntsville Madison.
HUNTSVILLE, Alabama – When Oscar Gonzales was named the CEO of the Huntsville Area Association of Realtors in 2008, he called Huntsville a “diamond in the rough” and “probably one of the bright spots in the country.”
In the following three years, Gonzales has helped lead Huntsville´s real estate market through the uncertain economic times, adding to the belief that Huntsville is one of the nation´s foremost cities of its size.
Gonzales is considered an “industry icon,” in the words of Broker Agent magazine. Realtor magazine has called him one of the 25 most influential people in real estate nationally.
He´s the founder of Gonzales Group, a Houston-based business consulting firm focusing on multicultural marketing and business strategies for housing and related industries. His comments about the housing market have been published in USA Today, The Wall Street Journal, The New York Times and other national publications.
Recently, Gonzales addressed some questions about the local real-estate market for BusinessFirst.
During the last couple of years, the housing market has not been as robust as we are used to in Huntsville and Madison County. How does it look for the spring and summer?
For spring and summer home sales looks promising. We have seen a consistent increase in home sales over the past year. Pending home sales are also on the rise which is a strong indicator of what actual sales will be in the next 30 to 60 days. We have experienced some months where the numbers appear to have fallen significantly by comparison. Those were the months where the home buying tax credit from the previous year influenced sales and skewed the numbers.
There was an early overbuild of high-end housing based on the BRAC decision in 2005. Is there still a surplus of homes on the market?
I wouldn´t say there is currently an over built high-end housing inventory. When you look at the pricing strata in any market, the higher-end segment tends to experience longer days on market by comparison. The key to managing housing inventory is knowing what the consumer wants, needs and expects in a home and keeping those dynamics in check before you build. The builders and Realtors in our area have done well in monitoring this.
Are sales of existing homes improving now that buyers may be looking for bargains?
Sales of existing home sales have been consistently improving but it´s not being driven by bargain house hunting: that doesn´t really drive our market. We have a sound housing market that doesn´t accommodate the “bargain market” dynamic like you see in some markets where foreclosures and short sales make up a majority of sales. Homes in Huntsville/Madison County have always been a bargain. You can get a lot of house for your money here and my colleagues around the country agree that´s the case in Huntsville … they´re just a little jealous.
As new residents move here to take BRAC jobs, what effect is this having on the housing prices?
Home prices are market driven. A home will sell for what the market will bear regardless of the inward or outward migration patterns you see in a community. In Huntsville/ Madison County our median home prices fluctuate seasonally rather than in reaction to the market changes. Our median home price growth has been steady and has not fluctuated wildly as we saw in markets like California, Nevada or Arizona.
What is the average number of days on the market for a house? How has that changed in the last couple of years?
We tend to hover around the 90-day mark but that changes based on time of year and demand. Within the city and county we see areas that experience shorter days on market than others which is influenced by multiple variables such as proximity to work and commute times, lifestyle, etc.
What price range of homes are the most active?
The $300,000 and below home pricing strata are the most active. Many families are astute enough to not live beyond their means. Many qualify for a higher-priced home but elect to not push the high end limit for several reasons such as maintaining a lifestyle and the overall uncertainty of the nation´s economic recovery.
Has the tightening of credit affected home sales?
Lending has become one of the bigger challenges of home buying. Data from Freddie Mac and Fannie Mae show requirements to obtain conventional mortgages have been tightened, with the average credit score rising to about 760 in the current market from nearly 720 in 2007. For FHA loans the average credit score is around 700, up from just over 630 in 2007. Sales would be stronger if mortgage lending would return to the normal, safe standards that were in place a decade ago before the lax lending standards became the norm.
What kind of new trends are you seeing in home construction in our area?
Without a doubt homebuyers want a home that is energy efficient and earth friendly.
Perhaps the most exciting and most important trend in home design is the increased sensitivity to the environment. I commend the builders in our area; they are in tune to this consumer expectation and for the most part exceed the minimum requirement for eco-friendly housing. Other trends we see are flexible floor plans, outdoor living space and accessible home design.
We hear more people, especially young professionals, talking about wanting to live in or near downtown? Are there signs that point to new or existing areas being revitalized or redeveloped for those buyers?
Absolutely. Community revitalization and redevelopment is one of the most exciting things to watch transpire in a community and I get to watch it unfold down the street from my office. The Five Points area and Blossomwood are two communities that immediately come to mind. They are undergoing revitalization which is being driven by young professionals and families who are creating a community that fits their lifestyle. They are accommodating “smart growth” which concentrates growth in compact walkable urban centers and advocates compact, transit-oriented, walkable, bicycle-friendly land use with a range of housing choices. Their actions can contribute significantly to the future economic well being of Huntsville´s downtown.
In your opinion, what is the five-year outlook for housing in Huntsville?
Our overall economy is bench marked against the housing industry both locally and nationally. Our market will continue to experience steady and solid growth and our median home prices will grow at a 1-2 percent increase per year, which is good for new arrivals to our area and for those folks that currently own a home. When home values grow steadily, new arrivals don´t experience over-inflated housing markets and current home owners preserve the equity they have in their homes: this helps to protect our most valuable investment.
By Curtis Coghlan, The Huntsville Times
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