New home sales down slightly in September

Sales: According to the Alabama Realtors, new home sales in September decreased 2.4% year-over-year (Y/Y) from 958 to 935 closed transactions, the fourth consecutive Y/Y decline. New home sales in August and September 2020, however, were significantly elevated due to shifting consumer preferences amid the pandemic. Following seasonal trends, sales increased 10.6% from August. New home sales are up 3% year to date. New homes represented 13.4% of all residential sales in Alabama during September, down from 14.3% one year ago. 

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Inventory: New homes listed for sale decreased 28.5% year-over-year from 2,304 listings one year ago to 1,676 in September. New builds represented 14.4% of all homes listed for sale in the state. 

At the current sales pace, all the active inventory on the market would sell in 1.8 months, up from 1.6 months in August and down from 2.4 months in September 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 September was $296,359, an increase of 14% from one year ago and a decrease of 0.3% from August. 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 September averaged 31 days on the market (DOM), 28 days faster than one year ago.

National Overview: According to the U.S. Census Bureau, new home sales nationwide were at a seasonally adjusted annual rate of 800,000 in September. This represents a 14% increase from the revised August rate of 702,000 but is 17.6% below the September 2020 estimate of 971,000 

The median sales price for new homes increased 18.7% Y/Y from $344,400 to $408,800.

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.  

Click here to view the entire monthly report.

The Alabama New Construction Monthly Report is developed in connection with the Alabama Association of Realtors.   

Additional Resources: Database of building permits and housing starts for all Alabama Counties and MSAs

Editor’s Note: All information in this article reflects data provided to the Alabama Center for Real Estate for the time period September 1 – 30, 2021. Thus, the performance represented is historical and should not be used as an indicator of future results.

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