Editor’s Note: All information in this article reflects data provided to the Alabama Center for Real Estate for the time period February 1 – 29, 2020. Thus, the performance represented is historical and should not be used as an indicator of future results, particularly considering the upcoming impact of COVID-19 on the housing market.
Sales: February home sales in the Birmingham area increased 4.8% year-over-year from 1,074 to 1,126 closed transactions. Following seasonal trends, sales were up 15.7% from the prior month. Sales are now up 14.2% year-to-date, but are likely to moderate amid growing uncertainty surrounding the spread of COVID-19. Two more resources to review: Quarterly Report and Annual Report.
For all Birmingham-area housing data, click here.
Inventory: Homes listed for sale decreased 10.2% from 4,778 listings one year ago to 4,290 in February. Months of supply dropped from 4.4 to 4.2, reflecting an continued seller’s market in the area.
Pricing: The median sales price in February was $222,950, an increase of 14% from one year ago and an increase of 4.2% from the prior month. This indicator can fluctuate from month to month because of the sampling size of data and seasonal buying patterns. Homes sold in February averaged 42 days on the market (DOM), 11 days faster than February 2019.
Forecast: February sales were 15 units, or 1.4%, above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 1,111 sales for the month, while actual sales were 1,126 units. ACRE forecast a total of 2,039 residential sales year-to-date, while there were 2,099 actual sales through February, a difference of 2.9%.
ACRE’s statewide perspective: While February sales results were very encouraging, up 7.2% year-over-year, they do not reflect the current turmoil in the stock market or the sizable hit to the global economy expected from the coronavirus and subsequent social quarantines. The statewide market is up 14.2% year-to-date, but sales are likely to moderate in the months ahead. Home price appreciation continued to climb as the median sales price increased 7.8% year-over-year, marking 28 consecutive months of gains. While properties listed for sale nationwide decreased 9.8% year-over-year, Alabama’s residential listings continued to tighten, decreasing 13.9%. Low inventory levels were a significant factor contributing to rising sales prices throughout 2019 and continued into February. With fewer listings, it is not surprising to see homes selling at a slightly quicker pace. Homes selling in Alabama during February spent an average of 93 days on the market, a decrease of 4 days from one year ago.
NAR’s national perspective: Existing home sales increased substantially in February, rising 7.7% year-over-year from approximately 311,000 closed transactions one year ago to 335,000 currently. Sales are up 9.4% year-to-date. The nationwide median existing-home price increased 8% in February, marking 96 consecutive months of year-over-year gains. Lawrence Yun, chief economist for the National Association of Realtors, said, “ February’s sales of over 5 million homes were the strongest since February 2007. I would attribute that to the incredibly low mortgage rates and the steady release of a sizable pent-up housing demand that was built over recent years. These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic and it is difficult to predict what short-term effects the pandemic will have on future sales.”