Homes overbuilt in Huntsville? (Madison, Athens: real estate, apartments, rent)

[HB2HSV]

In a recent thread (tell me about Athens), I was impressed with number of subdivisions being built from Madison to Athens. I forget the exact number but someone mentioned as many as 70! This does not include Meridianville/ Hazel Green all the way to Tennessee border.

This reminded me the oversupply of houses back in 2008 when I first arrived in Huntsville. At the time, BRAC (base realignment and closures) has consolidated other base closures and relocated to Arsenal including the Missile Defense Agency (MDA) from Washington D.C. The builders back then clearly overestimated the number of people who was willing to relocate and built accordingly and, as result, had a glut of homes on the market. It was good for us as buyer since builders was offering incentives after incentives just so they could unload the inventory.

So this new building trend leads me to wonder if the history will repeat itself? Did the builder overestimate the number of buyers, the rising of interest rate, and the number of job growth in Huntsville?

According to the National Association of Realtors (NAR) who publishes real estate data, the City of Huntsville building permit in 2021 was 4,490 units, representing a 62.4% above the long-term average. It generally takes 6 -18 months to finish construction of a SFH. If this statistic is correct, do we see an increased supply, therefore a leveling off or a decrease in home prices by late 2022/ early 2023?

If you're in the market to buy homes, what is your plan? Do you wait for another 1 - 1.5 years for the price to come down, or do you buy now? Obviously if you're relocating to Huntsville for a job you need to settle down and that may involve in buying a home, or rent for now and buy later?

What's your opinion?

[RocketDawg]

Originally Posted by HB2HSV

In a recent thread (tell me about Athens), I was impressed with number of subdivisions being built from Madison to Athens. I forget the exact number but someone mentioned as many as 70! This does not include Meridianville/ Hazel Green all the way to Tennessee border.

This reminded me the oversupply of houses back in 2008 when I first arrived in Huntsville. At the time, BRAC (base realignment and closures) has consolidated other base closures and relocated to Arsenal including the Missile Defense Agency (MDA) from Washington D.C. The builders back then clearly overestimated the number of people who was willing to relocate and built accordingly and, as result, had a glut of homes on the market. It was good for us as buyer since builders was offering incentives after incentives just so they could unload the inventory.

So this new building trend leads me to wonder if the history will repeat itself? Did the builder overestimate the number of buyers, the rising of interest rate, and the number of job growth in Huntsville?

According to the National Association of Realtors (NAR) who publishes real estate data, the City of Huntsville building permit in 2021 was 4,490 units, representing a 62.4% above the long-term average. It generally takes 6 -18 months to finish construction of a SFH. If this statistic is correct, do we see an increased supply, therefore a leveling off or a decrease in home prices by late 2022/ early 2023?

If you're in the market to buy homes, what is your plan? Do you wait for another 1 - 1.5 years for the price to come down, or do you buy now? Obviously if you're relocating to Huntsville for a job you need to settle down and that may involve in buying a home, or rent for now and buy later?

What's your opinion?

Single family permits dropped off a lot for January (December 2021 was still at a reasonably high rate) inside Huntsville city limits, but it looks like the apartment boom is still happening. Given how many were permitted and built just last year, the number has to fall or we'll have nothing but apartments covering the countryside. But in general, I think single family homes may be dropping. You can keep up with things just in the city of Huntsville here: https://maps.huntsvilleal.gov/permitstats/ There's at least as much happening in the rest of Madison County, both in towns and unincorporated areas.

The rate of building doesn't match what's being done in larger cities that are growing rapidly, such as Austin and Nashville, but certainly outpaces any other place in Alabama or Mississippi.

[HB2HSV]

Originally Posted by RocketDawg

Single family permits dropped off a lot for January (December 2021 was still at a reasonably high rate) inside Huntsville city limits, but it looks like the apartment boom is still happening. Given how many were permitted and built just last year, the number has to fall or we'll have nothing but apartments covering the countryside. But in general, I think single family homes may be dropping. You can keep up with things just in the city of Huntsville here: https://maps.huntsvilleal.gov/permitstats/ There's at least as much happening in the rest of Madison County, both in towns and unincorporated areas.

The rate of building doesn't match what's being done in larger cities that are growing rapidly, such as Austin and Nashville, but certainly outpaces any other place in Alabama or Mississippi.

Thanks for the link. The one I quoted was Huntsville MSA from the NAR

https://cdn.nar.realtor/sites/defaul...01-14-2022.pdf

From your link, it's impressive how many multi-family residences are being built, plus there's no telling how many units in each building.

[Dennis462]

From the original post in this thread - "Do you wait for another 1 - 1.5 years for the price to come down, or do you buy now?"

Someone in the real estate investment business can certainly provide a more educated answer to that question than I can. But my thoughts, FWIW, is that while home prices are likely to continue to rise in 2022 by 6% to 8%, the expected rise in mortgage rates may thin the lines of buyers.....or not?