Statewide Summary: Home sales in the state declined in June as rising mortgage rates pushed more buyers from the market. Sales declined 13.1% year-over-year and are down 3.2% year-to-date. However, housing demand remains above pre-covid levels with June sales 6.6% above the 5-year average. Additional declines are likely in the months ahead, with a 5-10% slowdown expected from last year’s pace.
Home sales price growth moderated in June with the statewide median sales price rising 11.7% Y/Y, down from 17.5% in May and 16.2% in March. The statewide median sales price declined slightly (-0.3%) from the record high reached in May 2022. Going forward, slowing sales and rising inventory are likely to result in home price growth moderating to the 8-10% range.
Much-needed inventory arrived in June with statewide listings rising 15.4% from May and 29.0% from one year ago. Inventory is still relatively tight as the 12,843 properties listed for sale is 35.5% below the 5-year average of 19,915. Unsold inventory was at 1.8 months of supply, up from 1.2 one year ago.
Sales: According to the Alabama Association of REALTORS, June home sales in the state decreased 13.1% year-over-year (Y/Y) from 8,234 to 7,159 closed transactions. Following seasonal trends, sales increased 1.3% from May. Sales are down 3.2% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
For all statewide housing data, click here.
Inventory: June listings (12,843) increased 15.4% from May and increased 29.0% from one year ago. At the current sales pace, all the active inventory on the market would sell in 1.8 months, up from 1.6 in May and up from 1.2 in June 2021. The equilibrium point where buyers and sellers have roughly equal bargaining power is 4-5 months of supply.
Pricing: The statewide median sales price in June was $241,982, a decrease of 0.3% from May and an increase of 11.7% from one year ago. 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 June averaged 38 days on the market (DOM), a record low and 10 days faster than one year ago.
Forecast: June sales were 413 units, or 5.5%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 7,572 sales for the month while actual sales were 7,159 units. ACRE forecast a total of 37,624 sales in the state year-to-date, while there were 38,014 actual sales through June, a difference of 1.0%.
New Construction: The 1,003 new homes sold represent 14.0% of all residential sales in the state in June. Total sales increased 4.4% from May and were equal to one year ago. The median sales price increased 4.9% from May to a record high of 344,800, an increase of 28.5% year-over-year. New homes sold in an average of 29 days, 8 days faster than June 2021.
National Summary: According to the National Association of Realtors (NAR), existing home sales declined for the fifth consecutive month in June, falling 5.4% from May (seasonally adjusted annual rate). Three of four regions of the country reported month-over-month declines while sales were down year-over-year in all regions, falling 14.2% from June 2021.
The median sales price for all housing types increased 13.4% Y/Y to a record high of $416,000, the 124th consecutive Y/Y gain. Properties sold in an average of just 14 days, the fastest pace on record. Inventory is slowly trending upwards from the lows seen during the post-pandemic housing boom. The 1,260,000 listings at the end of June increased 9.6% from May and 2.4% from one year ago. June’s 3.0 months of supply (MOS) increased from 2.6 during May and 2.5 one year ago.
Lawrence Yun, chief economist for NAR said, “falling housing affordability continues to take a toll on potential home buyers. Both mortgage rates and home prices have risen too sharply in a short span of time.”
Yun also commented on rising inventory saying, “Finally, there are more homes on the market. Interestingly though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”
All-cash sales represented 25% of all closed sales in June, the same as the prior month and up from 23% one year ago. Second-home buyers and individual investors purchased 16% of June home sales, unchanged from May and up slightly from 14% one year ago.
Foreclosures and short sales accounted for less than 1% of June transactions, unchanged from May 2022 and June 2021.
Click here to view the entire monthly report.
The Alabama Residential Monthly Report is developed in connection with the Alabama Association of Realtors.
