Sales: According to the Alabama Association of REALTORS, February home sales in the state increased 2.9% year-over-year (Y/Y) from 5,197 to 5,346 closed transactions. Following seasonal trends, sales increased 9.0% from January. Sales are up 2.3% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
For all statewide housing data, click here.
Inventory: February listings (7,403) decreased 0.7% from January and decreased 25.6% from one year ago. At the current sales pace, all the active inventory on the market would sell in 1.4 months, down from 1.5 in January and down from 1.9 months in February 2021. The equilibrium point where buyers and sellers have roughly equal bargaining power is 6 months of supply.
Pricing: The statewide median sales price in February was $225,568, an increase of 18.3% from one year ago and an increase of 1.9% from January. 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 February averaged 48 days on the market (DOM), 19 days faster than one year ago.
Forecast: February sales were 110 units, or 2.1%, above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 5,236 sales for the month while actual sales were 5,346 units. ACRE forecast a total of 9,959 sales in the state year-to-date, while there were 10,253 actual sales through February, a difference of 3.0%.
New Construction: The 832 new homes sold represent 15.6% of all residential sales in the state in February. Total sales increased 23.9% from January 2021 and increased 4.4% from one year ago. The median sales price was $317,356, a decrease of 0.7% M/M and an increase of 23.5% Y/Y. New homes sold in an average of 38 days, 8 days faster than February 2021.
NAR Commentary: According to the National Association of Realtors (NAR), existing home sales declined in February, falling 7.2% from January (seasonally adjusted annual rate). All four regions of the country reported month-over-month declines. Home sales also declined from one year ago, dropping 2.4% year-over-year. The median sales price for all housing types was $357,300, rising 15.0% year-over-year and marking 120 consecutive months of year-over-year gains. Rising home prices are largely a result of low housing inventory amid sustained demand. Existing home inventory totaled 870,000 listings at the end of February, up 2.4% from January 2021 and down 15.5% from 1.03 million listings one year ago. February’s 1.7 months of supply (MOS) increased from 1.6 during the prior month but down from 2.0 one year ago.
Lawrence Yun, chief economist for NAR said, “Housing affordability continues to be a major challenge, as buyers are getting a double whammy: rising mortgage rates and sustained price increases. Some who had previously qualified at a 3% mortgage rate are no longer able to buy at the 4% rate.”
Yun also said that he expects sales to slow down slightly because of higher mortgage rates and rising prices. “The sharp jump in mortgage rates and increasing inflation is taking a heavy toll on consumers’ savings. However, I expect the pace of price appreciation to slow as demand cools and as supply improves somewhat due to more home construction.”
ACRE Commentary: Home sales in Alabama grew slightly in February, rising 2.9% from one year ago. Sixteen of the 24 markets reporting sales data to ACRE reported year-over-year sales gains.
The statewide median sales price gained 18.3% Y/Y in February as the ongoing imbalance between supply and demand continued. Inventory declined to 7,403 listings, a record low and a decrease of 25.6% from one year ago. Unsold inventory is at 1.4 months of supply, down from 1.5 in January and down from 1.9 months in February 2021.
Click here to view the entire monthly report.
The Alabama Residential 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 February 1 – 28, 2022. Thus, the performance represented is historical and should not be used as an indicator of future results.
