Sales: According to the Alabama Association of Realtors, October home sales in the state decreased 7.8% year-over-year (Y/Y) from 6,889 to 6,350 closed transactions. Following seasonal trends, sales decreased 8.8% from September. Sales are up 11.4% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
For all statewide housing data, click here.
Inventory: October listings (10,548) decreased 4.5% from September and 24.8% from one year ago. At the current sales pace, all the active inventory on the market would sell in 1.7 months, up from 1.6 in September and down from 2 months in October 2020. The equilibrium point where buyers and sellers have roughly equal bargaining power is 6 months of supply.
Pricing: The statewide median sales price in October was $221,909, an increase of 11.3% from one year ago and 0.9% from September. 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 October averaged 45 days on the market, selling 26 days faster than one year ago.
Forecast: October sales were 121 units, or 1.9%, above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 6,229 sales for the month, while actual sales were 6,350 units. ACRE forecast a total of 66,372 sales in the state year-to-date, while there were 67,356 actual sales through October, a difference of 1.5%.
New construction: The 856 new homes sold represent 13.5% of all residential sales in the state in October. Total sales decreased 8.5% from September and decreased 6.5% from one year ago. The median sales price was $303,478, an increase of 2.4% month-over-month and an increase of 15.8% Y/Y. New homes sold in an average of 27 days, 27 days faster than in October 2020.
NAR commentary: According to the National Association of Realtors (NAR), existing home sales increased 0.8% month-over-month in October, marking the second consecutive month of gains (seasonally adjusted annual rate). However, October sales decreased 5.8% from one year ago. The median sales price for all housing types was $353,900, rising 13.1% year-over-year and marking 116 consecutive months of year-over-year gains. Rising home prices are largely a result of low housing inventory amid sustained demand. Supply retreated slightly in October, down 0.8% from September and 12% from one year ago. October’s 2.4 months of supply (MOS) was unchanged from September and down from 2.5 MOS in October 2020.
Lawrence Yun, chief economist for NAR, said, “Home sales remain resilient, despite low inventory and increasing affordability challenges. Inflationary pressures, such as fast-rising rents and increasing consumer prices, may have some prospective buyers seeking the protection of a fixed, consistent mortgage payment.”
Yun added that the rising stock market and high home prices have added to consumer wealth. “Among some of the workforce, there is an ongoing trend of flexibility to work anywhere, and this has contributed to an increase in sales in some parts of the country. Record-high stock markets and all-time high home prices have worked to significantly raise total consumer wealth and, when coupled with extended remote work flexibility, elevated housing demand in vacation regions.”
Second-home buyers and individual investors accounted for 17% of October sales, up from 14% one year ago. Nearly one-quarter (24%) were all-cash sales, up from 19% in October 2020.
ACRE commentary: Home sales in Alabama slowed in October, declining 8.8% from September and 7.8% from one year ago. However, sales are up 11.4% year-to-date, with another record year for home sales likely in 2021.
The statewide median sales price gained 11.3% Y/Y in October, up from 9.5% in September and 6.6% in August. Price growth has accelerated as supply trended downward in recent months. Properties listed for sale declined 4.5% from September and 24.8% from one year ago. Unsold inventory is at 1.7 months of supply, up from 1.6 in September and down from 2 months in October 2020.
Click here to view the entire monthly report.
The Alabama Residential Monthly Report is developed in connection with the Alabama Association of Realtors.
Editor’s note: All information in this article reflects data provided to the Alabama Center for Real Estate for Oct. 1-31. Thus, the performance represented is historical and should not be used as an indicator of future results.