Statewide Summary: Home sales in the state declined in November as rising mortgage rates softened buyer demand. Sales declined for the sixth consecutive month, falling 28.4% year-over-year. Home sales are down 10.5% year-to-date. Buyer demand has pulled back to below pre-covid levels with November sales down 13.2% 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 November with the statewide median sales price rising 6.8% Y/Y, down from an average of 14.3% from January-October 2022 and reaching single digits for the first time since September 2021. The statewide median sales price decreased 4.9% from the record high reached in October 2022. 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 decreased 2.3% from October but is up significantly (45.1%) from November 2021 when elevated demand drove inventory down to a near record low. However, inventory is still relatively scarce as the 14,533 properties listed for sale is 19.5% below the 5-year average. Unsold inventory was at 3.3 months of supply, below the equilibrium point of 4-5 months of supply.
Sales: According to the Alabama Association of REALTORS, November home sales in the state decreased 28.4% year-over-year (Y/Y) from 6,161 to 4,410 closed transactions. Following seasonal trends, sales decreased 9.3% from October. Sales are down 10.5% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
For all statewide housing data, click here.
Inventory: November listings (14,533) decreased 2.3% from October and increased 45.1% from one year ago. At the current sales pace, all the active inventory on the market would sell in 3.3 months, up from 3.1 in October and up from 1.6 in November 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 November was $235,064, a decrease of 4.9% from October but an increase of 6.8% 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 November averaged 46 days on the market (DOM), 8 days faster than one year ago.
Forecast: November sales were 1,234 units, or 21.9%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 5,644 sales for the month while actual sales were 4,410 units. ACRE forecast a total of 70,206 sales in the state year-to-date, while there were 65,775 actual sales through November, a difference of 6.3%.
New Construction: The 646 new homes sold represent 14.6% of all residential sales in the state in November. Total sales decreased 5.0% from October and decreased 17.6% from one year ago. The median sales price of $351,473 increased 3.8% from October and increased 13.6% year-over-year. New homes sold in an average of 45 days, 18 days slower than November 2021.
National Summary: According to the National Association of Realtors (NAR), existing home sales declined 7.7% from October (seasonally adjusted annual rate), marking the tenth consecutive month of slowing sales activity. All four regions reported year-over-year declines and home sales slowed 35.4% from November 2021’s pace.
The median sales price for all housing types increased 3.5% Y/Y to $370,700, the 129th consecutive Y/Y gain. However, home prices retreated somewhat over the last four months from a record high of $413,800 in June.
Properties sold in an average of 24 days, 6 days slower than one year ago. After trending up slightly for several months, inventory declined 6.6% from October but the 1,140,000 properties listed for sale increased 2.7% from November 2021. November’s 3.3 months of supply (MOS) was unchanged from October and up from 2.4 one year ago.
Lawrence Yun, chief economist for NAR said, “In essence, the residential real estate market was frozen in November, resembling the sales activity seen during the COVID-19 economic lockdowns in 2020. The principal factor was the rapid increase in mortgage rates, which hurt housing affordability and reduced incentives for homeowners to list their homes. Plus, available housing inventory remains near historic lows.”
Yun added that mortgage rates have dropped slightly saying, “The market may be thawing since mortgage rates have fallen for five straight weeks. The average monthly mortgage payment is now almost $200 less than it was several weeks ago when interest rates reached their peak for this year.”
All-cash sales represented 26% of all closed sales in November, unchanged from October and up from 24% one year ago. Second-home buyers and individual investors purchased 14% of November home sales, down from 16% in October and 15% one year ago.
Foreclosures and short sales accounted for approximately 2% of November transactions, essentially unchanged from the prior month and one year ago.
Click here to view the entire monthly report.
The Alabama Residential Monthly Report is developed in connection with the Alabama Association of Realtors.
