Birmingham-area home sales hit record low DOM averages in June

Sales: According to the Greater Alabama MLS, June home sales in the Birmingham area increased 13.7% year-over-year (Y/Y) from 1,741 to 1,980 closed transactions, marking 13 consecutive months of Y/Y gains. Following seasonal trends, sales increased 14.8% from May. Sales are now up 22.9% year-to-date. Two more resources to review: Quarterly Report and Annual Report.

For all Birmingham-area housing data, click here.

Inventory: June listings (3110) increased 2.8% from May but declined 34.3% from one year ago. Months of supply (inventory to sales ratio) also decreased from 2.7 to 1.6, reflecting a market where seller’s generally have elevated bargaining power.

Pricing: The median sales price in June was $275,000, an increase of 12.2% from one year ago and an increase of 1.9% 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 11 days on the market (DOM), a record low and 19 days faster than June 2020.

Forecast: June sales were 6 units, or 0.3%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 1,986 sales for the month, while actual sales were 1,980 units. ACRE forecast a total of 9,882 sales year-to-date, while there were 9,607 actual sales through June, a difference of 2.8%.

New Construction: The 199 new homes sold represent 10.1% of all residential sales in the Birmingham area in June. Total sales decreased 19.4% year-over-year. The median sales price in June was $307,890, a decrease of 4.5% from May and an increase of 25.7% from one year ago.

NAR Commentary: According to the National Association of Realtors (NAR), existing home sales nationwide increased in June rising 1.4% from May (seasonally adjusted annual rate). 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 2021 but is still down 18.8% from June 2020. Months of supply (2.6) increased modestly from May but is still well below June 2020 (3.9).

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.”

ACRE Commentary: Home sales in Alabama increased year-over-year (Y/Y) for the 13th consecutive month in June, rising 14.4%. Demand remains significantly elevated as home sales are now up 21.8% year-to-date. The statewide median sales price hit another record high of  $216,580, with sales price growth rates moderating somewhat, rising 11.7% Y/Y. The state’s housing supply received a small measure of relief as listings increased 6.3% from May, but is still down 39.4% from one year ago. June’s 1.2 months of supply also represents a record low, with properties selling an average of 34 days faster than June 2020.

Click here to view the entire monthly report.

The Birmingham Area Residential Monthly Report is developed in connection with the Birmingham Association of Realtors.

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, 2021. Thus, the performance represented is historical and should not be used as an indicator of future results.

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