By Dawn Suiter

A Conversation with Kellie Andrews

Sit Down With Success is a feature of the Huntsville Business Journal on entrepreneurs and their keys to success. To read the full story, please visit the Huntsville Business Journal Website.

Prior to launching the Huntsville Hub, owner Kellie Andrews tried out a variety of business roles while seeking her niche. The breakthrough came with a book entitled “101 Best Businesses to Start”: one of the case studies, ‘Shared Tenant Services,’ featured a secretary who launched her own secretarial business in a couple of rented rooms and, after finding that her income from renting unused office space surpassed that of her original business, she expanded her space further to create an executive suite.

Grasping the business potential of this venture, Andrews and her husband began seeking their own space, ultimately settling on Building 600 at Office Park South due to its affordability and attractiveness. The property owner at the time, the late Jerome Averbush, helped them negotiate the acquisition of the facility in 1994.

During our conversation in the conference room of The Hub, Andrews noted that while she doesn’t own the property, she has a master lease that gives her the right to sublease. “I bought all of his pieces and parts, I bought all of the contents of the business, and just picked it up where it was.” The Hub encompasses roughly 18,000 square feet of office space, including the building’s entire first floor and about a third of the third floor.

How long have you lived in the Huntsville area?

I moved here in 1986 to go to UAH. I came from Birmingham…I wanted to get an MIS degree and at the time it was UAH or Tuscaloosa. It was one of those two schools and I didn’t want to move somewhere that I’d move from again shortly thereafter, ‘cause people don’t usually stay in Tuscaloosa. I moved here so I could stay.

What would you consider to be the greatest challenge of owning a business?

Knowing what you don’t know. It’s easy to manage what you’re aware of but when there are big holes and you don’t know they’re there, they can break you. This is just a teeny, tiny little example, but we had some misconceptions about how payroll tax went, and so for some long period of time we weren’t paying separate payroll taxes.

The tax man didn’t like that, but we didn’t know we were doing it wrong. So it came out of nowhere when we figured it out…it’s making sure that you’re connected to the right people that are going to help you make sure you’ve got all the pieces covered. To me that’s the biggest challenge–every time I turn around it’s like we have to learn something new or I have to go find someone else to teach me something new.

What’s your favorite thing about being a business owner?

I am responsible for my own success or failure.

How do you balance your personal and professional life?

I don’t think there’s any difference… it might have been different at one time. My kids are grown and gone. They’re not actually gone–one of them is at the front desk there, she met you when you came in. She’s our first born…she grew up in these hallways. I’ve had to repaper her crayon on the wall. At one point there was a difference but now it’s a lifestyle. I don’t necessarily work 8-5 but I am very likely to have a call with a client at 6 AM or 8 PM. Not often, I don’t have to anymore, and I’m mixing up what I’m doing personally and what I’m doing [for] work. It all flows together.

What advice would you give to someone considering starting their own business?

Ask a million questions. Find people, hang around people that are successful and learn everything you can from them. Get ALL the advice–don’t assume that you know.

What would you say is the secret to your success?

[Laughs] I’m a redhead…I’m very stubborn.

People have said ‘you’ve been in business so long,’ because we’re in the middle of our 28th year now…I’m like ‘I’m just super stubborn–I have not failed because I have not quit yet.’ So that’s kind of it. There’s always a way out, there’s always a way forward if you just don’t give up. w

By Dawn Suiter / Photo by Steve Babin

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Real Estate Update: A Conversation with HAAR on Interest and Inflation

By Marie Johnson

We’ve all been watching as inflation has risen and interest rates have grown as well. To better understand what this means for the Huntsville real estate market, the Huntsville Business Journal sat down with Chris Hulser. Mr. Hulser, who has been a realtor since 2008, is the incoming President-Elect of the Huntsville Area Association of Realtors, and will be assuming the Presidency in January.

“Interest rates are tied to inflation,” explained Hulser. “As inflation goes up, the interest rates rise. This tends to slow the market a bit. Some of that is because of people being a bit more hesitant to buy. Some buyers no longer qualify, because as the interest rate rises, their income-to-debt ratio changes. It also affects the pricing of homes - we’ve seen some prices come down a little bit.”

Hulser stressed that this was no reason for alarm. “It’s a part of the normalization process, a trend that was bound to happen.”

He confirmed this reporter’s longheld perspective that the particular nature of Huntsville as a hub for Federal and Defense spending provides some degree of “insulation” from the worst effects of economic downturn.

“With the Fortune 500 companies and the Army here, it keeps demand up. A lot of people who come to work on a temporary basis end up making Hunsville their long-term home, so we’re still seeing a lot of demand. On the good side of that, we’re starting to see a lot of homes come onto the market, so while in the past, we saw buyers scrambling to find a house, it’s now easier, with the slowdown, to match buyers with houses. It isn’t that crazy, inflation of prices. Where other places in the country, their inventory is becoming stagnant, with few people looking to buy, we’re not seeing that here in Huntsville.”

With the natural high demand for housing in Huntsville, Mr. Hulser had a word of advice for realtors looking to educate clients on what interest rates mean for those looking to buy: “The saying is, ‘you want to marry the house, but date the rate,’” he said. “Some buyers will want to wait for the rates to come back down, but we are still seeing those prices continue to rise, even if it’s more gradual. So someone could try to wait it out, but then end up paying more for a house, instead of buying now, then, when interest rates begin to go back down in maybe six months to a year, just refinance.”

As the President-Elect of the HAAR, Hulser sees communicating with, and educating, clients about the real estate market as one of the key functions of a realtor. “It’s important for clients to know that they need to speak to their lender, to keep in touch with them over the process, so they know the rates and whether or not they will continue to qualify if rates change. We’re looking to educate the public and stabilize the market, so they don’t panic when they see fear-tactic headlines like ‘The Real Estate Market is Dead!’”

This seems like a good place to mention that we here at the Huntsville Business Journal are committed to the principle of responsible journalism, not only as a business model, but as a service to the general public. Real Estate Update exists to keep the public apprised of developments in the market, so that those in the business of buying and selling properties might make informed decisions. Those developments may be positive, or they may be negative, but we will always strive to report on them in a calm, reasonable fashion. Sensationalist hysterics have no place in our newsroom.

“The housing market is not dead,” asserted Hulser. “It’s adjusting, it’s normalizing, it’s doing what it’s meant to do. We couldn’t sustain the market that we had in 2021. We didn’t have any inventory, prices were going through the roof, and housing affordability was basically non-existent. That sort of price increase was never going to be able to last.”

Finally, Mr. Hulser had a word of advice for anyone looking to buy or sell a home: “Hire a realtor. We’re the experts. This is what we’re trained to do. Trying to do it on your own would be like trying to do your own dental work.”

According to statistics from the National Association of Realtors, the median agent-assisted property sold for $318,000 in 2021, while the median For-Sale-By-Owner-Only property sold for only $260,000.

“We use accountants for our taxes, and we use lawyers when we have legal trouble. Realtors are professionals; we do this every day, and we know the pitfalls and the roadblocks that can come that the general public just doesn’t understand. Hire a realtor, and let us do the heavy lifting.”

In short, don’t panic, consult the professionals, and recognize when the market is undergoing natural processes of correction. All good advice from the incoming PresidentElect of the HAAR. We here at the Huntsville Business Journal will continue to keep our readers informed of market developments. w

Real Estate Update: Madison County Weekly Update

By Marie Johnson / Infographic courtesy of Valley MLS

The Huntsville Business Journal, in partnership with ValleyMLS, is pleased to present a new feature to the Real Estate Update column; weekly updates on the state of the Huntsville/Madison County residential real estate market.

With reports coming in with greater frequency, and in greater detail, the column will be better able to keep our readership informed of the conditions of the Huntsville market.

This first installment covers the state of the market for the week ending on October 8, 2022.

The sharp rise in interest rates have led to a decline in mortgage and refinance activity. According to the Mortgage Bankers Association, mortgage activity has plummeted to the lowest levels seen in 25 years, with mortgage applications to purchase dropping 39% compared to the same week in 2021.

The market for single-family homes demonstrated increases in listings and inventory coupled with decreases in pending sales. While the new listings saw a modest increase of 0.6% to a total of 161, the number of residences in the monthly inventory jumped 86.7%, to a total of 1,121. The pending sales listed for that week dropped sharply, a 30% decline down to 114.

However, townhouses and condominium units actually saw an increase in pending sales; 12 units were listed that week, and with 10 units sold, the pace was just shy of replacement. With that said, an additional 84 units were added to the inventory that week.

Townhouses, of course, are more affordable than their single-family counterparts, as illustrated by the housing affordability indexes for both types of unit.

The housing affordability index compares the median household income in an area to the median price of a housing unit in an area. A higher number means greater affordability; for example, an affordability index of 120 means that the median household income covers 120% of the median price of a housing unit, under the prevailing interest rates.

For both townhouses and single-family homes, the affordability index took a hit from September of 2021 to September of this year. Townhouses saw a 36% decrease in affordability, showing an index of 103 - meaning that the average townhouse, with a median sales price of $266,500, is affordable to the average income, but only just.

In contrast, single-family homes in Madison County now have an affordability index of 83 - that is to say, the average household income only covers 83% of the cost to qualify for a single-family home, which lists for a median of $337,750.

All of this together has caused something of a slowdown in the pace of selling homes in Madison County: single-family homes stayed on the market for an average of 14 days, up from 8 the previous year. Townhouse units spent an average of 18 days on the market, but that tracks more with previous years’ figures, whereas such units sold much more rapidly in April of this year, where they spent a mere 5 days on the market, on average.

High interest rates do not simply appear out of the aether; they are intended to lower the rate of inflation. The combination of high interest rates slowing sales, and the introduction of inventory into the market should deflate the cost of housing a bit. This can be seen in the minor dips - 1.7% and 2.3%, respectively - of the percent of list price received for both single-family and townhouse units. This figure is found by dividing the price actually re-

ceived by a sold property by the latest list price before sale, then deriving the average for properties sold in a market over a given period. In September 2020, the percent of list price received was at or near 100% for both types of units - what they listed was almost exactly what they sold for - before swelling a point or two in September 2021, and then dipping below 100% in September 2022.

While the high interest rates are certainly painful, in the long run, the correction should help in making homes more affordable for the young professionals looking to move to Huntsville. Demand for housing remains high, so the rate of sales should eventually pick back up - it’s also important to note that autumn is generally a slower time for real estate sales anyway - but at a more reasonable rate than the uncontrolled explosive growth of the pandemic years.

As always, the Huntsville Business Journal will continue to bring its readers the information they need to succeed. w