Sales: According to the Northeast Alabama Association of Realtors, December residential sales in the Gadsden area decreased 5.9% year-over-year from 85 to 80 closed transactions. Following seasonal trends, sales increased 17.7% from November. Sales are now down 4.4% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
For all of the Gadsden area’s housing data, click here.
Inventory: December listings (193) decreased 19.3% from November and increased 48.5% from one year ago. At the current sales pace, all the active inventory on the market would sell in 2.4 months, down from 3.5 months in November and up from 1.5 months in December 2021. The equilibrium point where buyers and sellers have roughly equal bargaining power is 4-5 months of supply.
Pricing: The area’s median sales price in December was $176,200, a decrease of 1.3% from one year ago and an increase of 15.6% from November. 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 December averaged 50 days on market, 15 days slower than December 2021.
Forecast: December sales were 12 units, or 12.8%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 92 sales for the month, while actual sales were 80 units. ACRE forecast a total of 1,221 sales in the area year-to-date, while there were 1,091 actual sales through December, a difference of 10.6%.
Statewide Summary: Home sales in the state posted year-over-year declines for the seventh consecutive month in December, falling 35.5% from one year ago. Annual sales declined 12.6% from 2021 when low interest rates and shifting buyer preferences contributed to the pandemic housing boom. Buyer demand has pulled back to below pre-covid levels with December sales down 20.0% from the 5-year average.
Home sales price growth moderated in December with the statewide median sales price rising 1.7% Y/Y, down from an average of 13.6% from January-November 2022 and falling below 5% for the first time since December 2019. The statewide median sales price decreased 0.1% from the prior month, the second consecutive month-over-month decline. Going forward, slowing sales activity is expected to slow price growth to the 2-4% range during 2023.
Following seasonal trends, inventory decreased 4.9% from November but is up significantly (58.5%) from December 2021 when elevated demand drove inventory down to a near record low. However, inventory is still relatively scarce as the 13,824 properties listed for sale is 17.5% below the 5-year average. Unsold inventory was at 3.2 months of supply, 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 November (seasonally adjusted annual rate), marking the eleventh consecutive month of slowing sales activity. All four regions reported year-over-year declines and home sales slowed 34.0% from December 2021’s pace.
The median sales price for all housing types increased 2.3% Y/Y to $366,900, the 130th consecutive Y/Y gain. However, home prices retreated somewhat over the last five months from a record high of $413,800 in June.
Properties sold in an average of 26 days, 7 days slower than one year ago. Inventory declined 13.4% from November but the 970,000 properties listed for sale represents an increase of 10.2% from one year ago. December’s 2.9 months of supply (MOS) was down from 3.3 in November and up from 1.7 one year ago.
Lawrence Yun, chief economist for NAR said, “December was another difficult month for buyers, who continue to face limited inventory and high mortgage rates. However, expect sales to pick up again soon since mortgage rates have markedly declined after peaking late last year.”
Yun added that price growth has slowed, saying, “Home prices nationwide are still positive, though mildly. Markets in roughly half of the country are likely to offer potential buyers discounted prices compared to last year.”
All-cash sales represented 28% of all closed sales in December, up from 26% in November and 23% one year ago. Second-home buyers and individual investors purchased 16% of December home sales, up from 14% in November but down from 17% one year ago.
Foreclosures and short sales accounted for approximately 1% of December transactions, essentially unchanged from the prior month and one year ago.
Click here to view the entire monthly report.
The Gadsden Residential Monthly Report is developed in conjunction with the Northeast Alabama Association of Realtors to better serve area consumers.