Sales: According to the Greater Alabama MLS, February home sales in the Birmingham area decreased 9.1% year-over-year (Y/Y) from 1,251 to 1,137 closed transactions. Following seasonal trends, sales increased 6.2% from January. Sales are now down 9.6% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
For all Birmingham-area housing data, click here.
Inventory: February listings (1,551) increased 17.1% from January and declined 49.0% from one year ago. At the current sales pace, all the active inventory on the market would sell in 1.4 months, up from 1.2 months in January and down from 2.4 months in February 2021. The equilibrium point where buyers and sellers have roughly equal bargaining power is 6 months of supply
Pricing: The median sales price in February was $278,650, an increase of 11.5% from one year ago and an increase of 6.0% 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 20 days on the market (DOM), 8 days faster than February 2021.
Forecast: February sales were 103 units, or 8.3%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 1,240 sales for the month, while actual sales were 1,137 units. ACRE forecast a total of 2,333 sales year-to-date, while there were 2,208 actual sales through February, a difference of 5.3%.
New Construction: The 140 new homes sold represent 12.3% of all residential sales in the Birmingham area in February. Total sales decreased 31.4% year-over-year. The median sales price in February was $334,800, a decrease of 16.7% from January and an increase of 12.4% from one year ago.
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 Birmingham Metro Area Residential Monthly Report is developed in connection with the Birmingham 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.