HIgh Demand in Alabama's Housing Market
In the state of Alabama, June listings (9,954) increased 6.3% from May, the first month-over-month inventory gain since the onset of the pandemic in April 2020. However, housing inventory in the state still remains tight, with listings down 39.4% from one year ago and the last 9 year-over-year inventory gain in February 2015.
Months of supply also decreased from 2.3 months to 1.2, a record low and reflecting a market where sellers generally have elevated bargaining power.
The statewide median sales price in June was $216,580, a record high and an increase of 11.7% from one year ago and 4.9% from May. The differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood. Homes sold in June averaged 48 days on the market, a record low and 36 days fewer than one year ago.
June sales were 693 units, or 9.2%, above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 7,541 sales for the month, while actual sales were 8,234 units. ACRE forecast a total of 38,895 sales in the state year-to-date, while there were 39,288 actual sales through June, a difference of 1.01%.
The 1,001 new homes sold represent 12.2% of all residential sales in the area in June. Total sales increased 11% from May and decreased 0.9% from one year ago. The median sales price in June was $265,046, a decrease of 8.2% month-over-month and an increase of 6.3% year-over-year. New homes sold in an average of 37 days, a record low and 26 days faster than in June 2020.
According to the National Association of Realtors (NAR), existing home sales nationwide increased in June, rising 1.4% from May. The gain ends four consecutive months of declining sales. June sales were up 22.9% from one year ago. The median sales price for existing homes hit another historic high ($363,300), rising 23.4% year-over-year and marking 112 consecutive months of year-over-year gains. Rising home prices are largely a result of low housing inventory amid significantly elevated demand. Supply did improve somewhat, rising 3.3% from May, but is still down 18.8% from June 2020. Months of supply (2.6 months) increased modestly from May but is still well below June 2020 (3.9 months).
Lawrence Yun, chief economist for NAR, said, “Supply has modestly improved in recent months due to more housing starts and existing homeowners listing their homes, all of which has resulted in an uptick in sales. Home sales continue to run at a pace above the rate seen before the pandemic.”
Yun added that home prices are unlikely to decline, saying, “At a broad level, home prices are in no danger of a decline due to tight inventory conditions, but I do expect prices to appreciate at a slower pace by the end of the year. Ideally, the costs for a home would rise roughly in line with income growth, which is likely to happen in 2022 as more listings and new construction become available.”
Content collected from alabamanewscenter.com