Homes for sale huntsville Huntsville Alabama Real Estate

Brad,

I concur with your assessment of Huntsville’s local economy. We had a recent dinner party with a gentleman who oversees the several construction projects on Redstone Arsenal related to the Base Realignment and Closure (BRAC). He indicated that regardless of administration, that BRAC is on schedule and will proceed. There are several commands moving to Huntsville with primary positions estimates from 2,500 to 3,200.

The BRAC is partially due to post 9 /11 security concerns. Facilities in the D.C. area are less defensible than campuses located on a secured military facility. In addition to the Department of Defense positions, there will be many related and unrelated positions as Huntsville’s population grows.

While Huntsville’s economy does have a strong defense sector the fear of the realtor quoted by Mr. Brice is overstated.

While courting Toyota to build in Huntsville was a major achievement, Toyota is not a major employer and the positions for most workers are not lucrative.

Huntsville has an aggressively growing biogenetics industry. We have sold homes to two clients moving to the area to work in the new Hudson-Alpha Institute’s building in Research Park. This building is the first of ten planed by the institute.

The slowing of sales is not a result of a slow local economy. Our local and state Chambers of Commerce are predicting shortages of workers in Huntsville over the next several years. Two Department of Defense surveys have shown that only 25% to 30% of the personnel associated with the BRAC command moves will relocate to Huntsville. The new positions must be filled from other pools. The DOD is already recruiting in southern universities.

The over correction in lax loan underwriting has affected Huntsville’s real estate market to a degree. Clients who could have easily qualified for home loans 14 months ago no longer can. There are signs of local and regional lenders loosening their standards over the past several weeks. National banks and lenders still haven’t loosened their requirements much, especially in the case of investors.

Starting in 2007 our market had a bubble caused by out of area realtors and investment groups whose local market and livelihoods had dried up due to soft markets in their areas. We had several investment groups and out of state realtors who formed confederations with less that honest local realtors to sell to out of area investors.

The investors were shown questionable sales, appreciation and rent roll data for properties that were in areas where we would never allow our investor clients to purchase. The homes were in areas much too far from the city, in areas without shopping and with long commutes to the city. Some of the properties were on very busy roads or had other fatal location flaws. Many investors never saw the properties and from a lack of personal due diligence, have experienced financial catastrophe.

Many of these investors came to our firm for management of their properties after their purchase. Many became quite angry with us when we provided accurate information on rental amounts, flat sales and depreciation of the properties they had purchased. I saw these same investors move from property manager to property manager seeking those that said what they wanted to hear. Meanwhile the properties remained vacant or worse, the property managers installed unqualified tenants who did not pay rent and abused the properties.

We have been able to keep a number of these investors afloat by marketing their properties and finding qualified tenants but their properties have still not appreciated to the point that they could sell without a substantial loss.

Protocol prevents me from naming the local realtors that were involved but they all have extremely poor reputations in the local realtor community. I have brought two of them to the local board of realtors for their actions but local and state enforcement is quite lax.

I had seen cases of unscrupulous lenders falsifying loan documents to beat their competitors’ rates.  Two years ago I sold an upscale home to a young couple that had moved to the area. At closing the wife was signing the last document (resigning the loan application). The seller had left with their money and the listing agent with hers. The wife got a funny look on her face and said, “ This isn’t right”. Someone at the lender had falsified the loan application, stating the wife had income that didn’t exist.

We called the lender who responded by pulling the funding and not returning our calls. I reported the fraud to the state, but no action was ever taken. I follow the career of the loan originator who falsified the application and let his new employer know of his actions each time he moves.  Multiply this dishonesty by hundreds and thousands and the result is the current national financial crisis seeded in the housing crisis.

For the past three years builders in Huntsville have been putting up homes without regard for supply and demand or site selection. Even the large production builders who have the resources to research and understand the market were slow respond. There are upscale neighborhoods in areas that are too far from the city and in areas with mobile homes, inadequate roads and poor schools.

I have shaken my head in disbelief over some of the subdivisions. Builders, investors and lenders who did not use even the most basic logic caused the local bubble and subsequent slowdown. The flame was fanned by a handful of greedy (often promanite) realtors whose only ethic is that of doing whatever it takes to get the next commission check.

On the positive side, our firm’s sales were off only 12% last year and our personal sales remained constant. Activity in the past several weeks had been at pre-crash levels. Most builders have finally reacted.  We expect the local market to correct this summer.

The realtors associated with the investor debacle are still in business however. Let the buyer beware.

Philip Winburn