Sales: According to the Alabama Realtors, new home sales in July decreased 18.6% year-over-year (Y/Y) from 1,047 to 852 closed transactions, the second consecutive Y/Y decline. New home sales in June and July 2020, however, were significantly elevated due to shifting consumer preferences amid the pandemic. Following seasonal trends, sales decreased 15.1% from June. New homes represented 11.2% of all residential sales in Alabama during July, down from 13.6% one year ago.
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Inventory: New homes listed for sale decreased 47.2% year-over-year from 2,540 listings one year ago to 1,341 in July. New builds represented 12% of all homes listed for sale in the state.
At the current sales pace, all the active inventory on the market would sell in 1.6 months, up from 1.1 months in June and down from 2.4 months in July 2020. The equilibrium point where buyers and sellers have roughly equal bargaining power is 6 months of supply.
Pricing: The median sales price for new construction in July was $301,052, an increase of 20.5% from one year ago and an increase of 12.2% from June. 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.
New homes sold in July averaged 30 days on the market (DOM), a record low and 28 days faster than one year ago.
National Overview: According to the U.S. Census Bureau, new home sales nationwide (seasonally adjusted annual rate) decreased 27.2% year-over-year from approximately 972,000 one year ago to 708,000 in July. Mirroring trends in the resale market, new home inventory increased 26.1% Y/Y. With slowing sales and rising inventory, months of supply (inventory to sales ratio) increased from 3.6 in July 2020 to 6.2 in July 2021.
The median sales price for new homes increased 18.4% Y/Y from $329,800 to $390,500.
Monthly new construction sales data is available for the following markets: Athens, Baldwin County, Birmingham, Calhoun County, Gadsden, Huntsville, Lee County, Marshall County, Mobile, Montgomery, Morgan County, Tuscaloosa, and the Wiregrass region.
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The Alabama New Construction Monthly Report is developed in connection with the Alabama 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 July 1 – 31, 2021. Thus, the performance represented is historical and should not be used as an indicator of future results.