New home sales slow down in January

Sales: According to the Alabama Realtors, new home sales in January decreased 10.2% year-over-year (Y/Y) from 748 to 671 closed transactions, the seventh consecutive month of Y/Y declines in new home sales. Following seasonal trends, sales decreased 40.7% from December. New homes represented 10.1% of all residential sales in Alabama during January, down from 15.5% one year ago. 

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Inventory: New homes listed for sale decreased 39.7% year-over-year from 1,997 listings one year ago to 1,204 in January. New builds represented 16.0% of all homes listed for sale in the state. 

At the current sales pace, all the active inventory on the market would sell in 1.5 months, up from 1.3 months in December and down from 2.2 months in January 2021. 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 January was $319,487, an increase of 18.9% from one year ago and a decrease of 0.5% from December. 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 January averaged 33 days on the market (DOM), 16 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 801,000 in January. This represents a 4.5% decrease from the revised December rate of 839,000 and is 19.3% below the January 2021 estimate of 993,000 

The median sales price for new homes increased 13.4% Y/Y from $373,200 to $423,300.

Supply of new homes was estimated at 406,000 listings (seasonally adjusted) in January. Months of supply increased from 3.6 one year ago to 6.1 in January 2021. 

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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 January 1 – 31, 2022. Thus, the performance represented is historical and should not be used as an indicator of future results.