ALABAMA REAL ESTATE JOURNAL

Home sales in Lee County increase significantly in June 2020

Sales: According to the Lee County Association of Realtors, June residential sales in the Auburn-Opelika area increased 42.9% year-over-year from 182 to 260 closed transactions. Likely a result of pent-up demand, sales increased 37.6% from May. After the sizable gain in June, sales are now up 3.6% year-to-date. Two more resources to review: Quarterly Report and Annual Report.

For all of the Lee County area’s housing data, click here.

Inventory: Total homes listed for sale in June decreased 1.6% year-over-year from 625 to 615 listings. Months of supply decreased from 3.4 to 2.4, reflecting a market where sellers generally have elevated bargaining power.

Pricing: The area’s median sales price in June was $266,270, a decrease of 0.7% from one year ago and an increase of 1.7% 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 64 days on the market (DOM), 3 days faster than June 2019.

Forecast: June sales were 14 units, or 5.1%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 274 sales for the month, while actual sales were 260 units. ACRE forecast a total of 1,225 residential sales in the area year-to-date, while actual sales were 1,087 units, a difference of 11.3%.

Click here to view the entire monthly report.

NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide rebounded at a record pace in June (seasonally adjusted annual rate), suggesting signs of a turnaround after three months of declines. Sales prices continued to rise as the nationwide median sales price increased 3.5% Y/Y, extending the streak of year-over-year price gains to 100 consecutive months.

When addressing the turnaround in sales activity, Lawrence Yun, NAR chief economist said: “The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown. This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”

Yun also noted the impact of low inventory conditions, saying, “Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”

ACRE commentary: Closed sales data from June shows that total residential sales increased 18.7% year-over-year, ending two consecutive months of declines. On the supply side, inventory (properties listed for sale) was tight before the pandemic, and continues to be constrained as listings declined 24.7% Y/Y. Limited inventory has played a significant role in supporting sales prices, which continue to trend upwards. The median sales price of $193,977 reflects an increase of 7.1% from one year ago and 4.8% from May. Pricing dynamics are driven by the law of supply and demand, always at work moving toward or away from market equilibrium (6 months of supply) – where buyer and seller have equal bargaining power. In June months of supply was at 2.3.

The Lee County Residential Monthly Report is developed in conjunction with the Lee County Association of Realtors to better serve area consumers.

Editor’s Note: All information in this article reflects data provided to the Alabama Center for Real Estate for the time period June 1 – 30, 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. 

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