Tuscaloosa-area homes continue to sell fast even as demand slows

Sales: According to the Tuscaloosa Association of Realtors, September home sales in the area decreased 11.3% year-over-year (Y/Y) from 309 to 274 closed transactions. Following seasonal trends, sales increased 2.2% from August. Sales are down 3.3% year-to-date. Two more resources to review: Quarterly Report and Annual Report.

For all Tuscaloosa-area housing data, click here.

Inventory: September listings (507) decreased 9.3% from August and increased 15.8% from one year ago. At the current sales pace, all the active inventory on the market would sell in 1.9 months, down from 2.1 months in August and up from 1.4 months in September 2021. The equilibrium point where buyers and sellers have roughly equal bargaining power is 4-5 months of supply.

Pricing: The median sales price in September was $238,950, an increase of 3.9% from one year ago and a decrease of 1.0% from August. 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 September averaged 41 days on the market (DOM), 6 days slower than September 2021. 

Forecast: September sales were 42 units, or 13.4%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 316 sales for the month, while actual sales were 274 units. ACRE forecast a total of 2,896 residential sales year-to-date, while there were 2,689 actual sales through September, a difference of 7.2%. 

New Construction: The 40 new homes sold represented 14.6% of all residential sales in the area in September. Total sales decreased 4.8% year-over-year. The median sales price was $304,535, an increase of 6.9% from one year ago and a decrease of 0.1% from August.  

Statewide Summary: Home sales in the state declined in September as escalating mortgage rates softened buyer demand. Sales declined 15.0% year-over-year and are down 7.4% year-to-date. Buyer demand has pulled back to pre-covid levels with September sales up slightly (2.3%) from the 5-year average. Additional declines are likely in the months ahead, with a 10-15% slowdown expected from last year’s pace. 

Home sales price growth moderated in September with the statewide median sales price rising 10.5% Y/Y, down from an average of 15.2% from January-August 2022. The statewide median sales price increased 0.4% from August. Going forward, slowing sales and rising inventory are likely to result in home price growth moderating to the 8-10% range by year end. 

Inventory increased slightly from August but is up significantly (30.1%) from September 2021 when elevated demand drove inventory down to a near record low. However, inventory is still relatively scarce as the 14,370 properties listed for sale is 25.5% below the 5-year average. Unsold inventory was at 2.4 months of supply, well below the equilibrium point of 4-5 months of supply.  

National Summary: According to the National Association of Realtors (NAR), existing home sales declined 1.5% from August (seasonally adjusted annual rate), marking the eighth consecutive month of slowing sales activity. Three of four regions reported year-over-year declines and home sales slowed 23.8% from September 2021’s pace. 

The median sales price for all housing types increased 8.4% Y/Y to $384,800, the 127th consecutive Y/Y gain. However, home prices retreated somewhat over the last two months from a record high of $413,800 in June. 

Properties sold in an average of 19 days, 2 days faster than one year ago. Inventory is slowly trending upwards from the lows seen during the post-pandemic housing boom. The 1,250,000 listings at the end of September represent a decrease of 2.3% from August and up slightly (0.8%) from September 2021. September’s 3.2 months of supply (MOS) was unchanged from August and up from 2.4 one year ago.

Lawrence Yun, chief economist for NAR said, “The housing sector continues to undergo an adjustment due to the continuous rise in interest rates, which eclipsed 6% for 30-year fixed mortgages in September and are now approaching 7%. Expensive regions of the country are especially feeling the pinch and seeing larger declines in sales.”

Click here to view the entire monthly report. 

The Tuscaloosa Residential Monthly Report is developed in connection with the Tuscaloosa Association of Realtors.