Modern Home Subdivision in Mount Olive, AL?

Question

Good Evening Everyone,

I am interested in getting some opinions about the potential market modern homes in the Mount Olive/Gardendale submarket in Alabama.

I have the opportunity to develop a modern home subdivision on a 17-acre pice of land in Mount Olive as part of a joint venture with another developer who has extensive experience building these homes and subdivisions in other parts of the US.  Attached is a rough overlay of what the subdivision might look like and the ad for the land.

However, as most of you know, there are not many modern homes in the Birmingham metro, so this would be a very bold move.

I am interested to hear what input people have about the viability of this project.

Setting aside cost and all of the other challenges inherent in a project like this, do you think people would buy modern homes in this area?

Thanks for your input!

-Maura

Jason Cory · Answer

Mt. Olive doesn't have zoning to the best of my knowledge.

It's the north of Birmingham country folk area.

You want Homewood, Mtn. Brook, Vestavia, or Hoover for what you are describing.

Gardendale just lost a lawsuit to form a city school system to break away from the county school system. Civil rights, i.e., attempted segregation, was the stated reason for Gardendale being sued however, every city I mentioned above has a city school system, plus some other cities in Jefferson County, that were never challenged when they broke away from the county school system. Gardendale is the last predominantly white city left in the county system.

Simply put the county system would go under financially if Gardendale formed their own school system but the county played the race card & won somehow.

I can't say developing in Mt. Olive is a good idea right now. If you do, keep the houses under $175,000.

Jason Cory · Answer

What is your definition of Modern homes?

I used to do subdivision analysis before they started as an appraiser but I'm honestly not following the modern part.

As far as will houses sell? Yes but as a slower pace than Gardendale. Mt. Olive is unincorporated. Land tax assessments are higher than normal on lots with existing houses. The assessment usually runs 30-50% for the land portion of the tax assessment when they shouldn't exceed 20% like every other city.

Your approval would come from Jefferson County not Mt. Olive, Gardendale, or Birmingham.

Maura McGraw · Answer

Yes--I read about the lawsuit, that is some good insight.

My inclination was always that Vestavia or Hoover would be a better fit for these types of homes anyways.

Thanks so much for the feedback.

Maura McGraw · Answer

@Jason Hollon thanks for your feedback!

Are you concerned about this school issue at all? https://www.al.com/news/birmingham/index.ssf/2018/...

Jason Hollon · Answer

I can't speak to new construction in Mount Olive specifically -- but from a rehabbing standpoint (in established neighborhoods), I have recently had good success in Mount Olive.

These houses were in the $160,000-$170,000 price range, and they sold quickly.  I would recommend staying below $200,000 for sure, as Jason Cory mentioned.

I'm just about to put on one the market in Warrior (even further north) in the $130,000's range, which has several good comps to go on as well.

It is a generally a desirable area, and I believe at the right price point and construction style (sorry, can't help you with that question) there is certainly potential there.

Maura McGraw · Answer

@Jason Cory, good question--I should have specified.  When I said that we are thinking about building a "modern home subdivision" I was referring to the style of homes we plan to build.  The style will be contemporary/mid-century modern/modern.

My concern is that I have not seen many modern style homes in the Gardendale/Mount Olive area or in the Birmingham metro in general.  My developer partner on this project has built many modern homes and subdivisions in Palm Springs, CA and some other markets and I am trying to weigh the potential demand for this style of home in Birmingham.

Most of the new houses being built seem to have a South African Dutch, Colonial, Farmhouse, or Tudor style (depending on the area) are combination thereof.

Apart from the style issue, we are conducting our own analysis of the site.  There are many potential issues with the site, but those are probably issues for another forum post once some of our initial tests come back.  However, your info about the tax assessment was helpful and I'll make sure that we include that in our site analysis.

I would love to hear your opinion on whether you think people would be interested in buying a contemporary/modern style home in this area.

-Maura

Modern Home Subdivision in Mount Olive, AL?

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