New home sales down 6% in October

Sales: According to the Alabama Realtors, new home sales in October decreased 6.4% year-over-year (Y/Y) from 916 to 857 closed transactions, the fifth consecutive Y/Y decline. New home sales in the second half of 2020, however, were significantly elevated due to shifting consumer preferences amid the pandemic. Following seasonal trends, sales decreased 8.4% from September. New home sales are up 2.1% year to date. New homes represented 13.5% of all residential sales in Alabama during October, up from 13.3% one year ago. 

For more homebuilding news, click here.

Inventory: New homes listed for sale decreased 26.2% year-over-year from 2,266 listings one year ago to 1,672 in October. New builds represented 15.9% of all homes listed for sale in the state. 

At the current sales pace, all the active inventory on the market would sell in 2.0 months, up from 1.8 months in September and down from 2.5 months in October 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 October was $293,364, an increase of 12.0% from one year ago and a decrease of 1.0% from September. 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 October averaged 25 days on the market (DOM), 29 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 745,000 in October. This represents a 0.4% increase from the revised September rate of 742,000 but is 21.3% below the October 2020 estimate of 969,000 

The median sales price for new homes increased 17.5% Y/Y from $346,900 to $407,700.

Supply of new homes was estimated at 389,000 (seasonally adjusted) in October. Months of supply increased from 3.7 one year ago to 6.6 in October 2021. 

Click here to view the entire monthly report.

Monthly New Home Sales Data: Athens, Baldwin County, Birmingham, Calhoun County, Gadsden, Huntsville, Lee County, Marshall County, Mobile, Montgomery, Morgan County, Tuscaloosa, and the Wiregrass region.  

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 October 1 – 31, 2021. Thus, the performance represented is historical and should not be used as an indicator of future results.

Share on facebook
Share on twitter
Share on linkedin
Share on email