TUSCALOOSA, Ala. — Alabamians are continuing to purchase homes at a rate last seen in 2017, according to a recent report from the Alabama Center for Real Estate (ACRE). The Alabama Residential Sales Report for August 2024 recorded 5,328 closed transactions for the month, reflecting a 3% decrease compared to July. These sales numbers are similar to those recorded in August 2017, reporting roughly 5,500 closed transactions throughout the state.
Despite the decrease, home sales across the state have increased nearly 1% compared to last August. Among Alabama’s four major metro areas, three (Birmingham, Huntsville and Montgomery) reported increases in total home sales, while Mobile saw a slight decrease of 2%.
“Inventory has trended up for nearly two years as demand was softened by rising rates, allowing inventory to catch up somewhat,” Stuart Norton, Associate Director of ACRE said. “However, the market remains undersupplies with 3.9 months of supply statewide in August.“
Out of the ten midsize metro areas, five areas reported increases in homes sold with Athens leading by an increase of 18.2%. Tuscaloosa reported the lowest increase of 3.5%.
In addition to home sales, major metro areas across Alabama saw an increase in median sales prices, with Montgomery leading the way at $239,350, reflecting an 8.2% increase compared to last year. In midsize metro areas, Calhoun County followed closely, reporting a 7.5% increase, with median sales prices increasing from $183,181 to $196,925 year-over-year.
Price fluctuation can be partly attributed to the varying number of sales each month. Given the variations in local markets, ACRE advises potential buyers and sellers to consult with local real estate professionals for more accurate insights into neighborhood-specific trends.
Inventory levels across Alabama also showed notable changes. August listings (20,922) increased 2.7% from July and 41.8% from one year ago. At the current sales pace, all active inventory on the market would sell in 3.9 months, an indication of a sellers’ market. The equilibrium point where buyers and sellers have roughly equal bargaining power is 6 months of supply.
“It’s still a seller’s market with less than six months of supply in most markets. Going forward, home prices are expected to grow in the 2 to 4 percent range year-over-year in late 2024 and the first half of 2025,“ Norton said. “Further rate cuts will provide a significant boost to demand, and it’s likely that home sales will grow 6 to 8 percent in the coming year.”
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