Will Alabama’s real estate market improve this fall?

Some Alabama real estate markets have seen historic lows in available housing this year.

At the same time, high-end housing is experiencing high prices.

How long can these conditions last? Fall may see some changes.

According to figures from the Alabama Center for Real Estate at the University of Alabama, a few conditions have changed over the summer.

In August, home sales in Alabama were up 3.9% year-over-year. However, sales were down 5.9% month over month, which is typical for this time of year.

But the monthly chart masks the fact that sales in 2021 are up 15.3% from the previous year.

This means this year will likely be a banner year for transactions as housing demand and low interest rates combine to heat the market.

You can see it in some statistics. Alabama homes spent an average of 39 days on the market in August, a record.

But explore the individual markets and you will see other signs of a rabid market. Homes were foreclosed on an average of seven days after listing in the Birmingham area and 13 days in Huntsville. Mobile was a bit more relaxed at 17 days. Montgomery lasted for 51 virtually quiet days, but that was a 57% drop from the previous year.

New homes are also being bought, selling on average 25 days, a record 43 days faster than August 2020.

Home price growth is showing signs of slowing. The statewide median selling price rose 6.6% year-on-year in August, compared to an average of 12.3% year-on-year in the first six months of the year.

As some analysts had predicted, the state’s housing supply edged up from July, to 0.2%. But if you look back to 2020, you’ll find that the ads are down 24.7% from a year ago. Earlier this year in May, the level of available housing was below 9,400 units, the lowest on record.

But the supply gradually increases, as continuous demand and prices push sellers into the market.

The center, in its monthly report, expects listings to increase gradually over the next few months as rising home prices will attract more potential sellers to the market. Prices are on average 10.3% higher than in 2020, with the median selling price standing at $ 297,381.

Nationally, the average interest rate on 30-year fixed-rate mortgages jumped last week, from 2.88% to 3.01%, the largest weekly increase since mid-February. The average rate on 15-year fixed-rate mortgages also edged up from 2.15% to 2.28%.

Mortgage applications to buy a home fell 1% last week, according to CNBC. But analysts say weak buying demand is less related to rising interest rates and more to soaring house prices.

About Robert Valdivia

Robert Valdivia

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