Alabama home sales rebound in June 2020
Sales: According to the Alabama Association of Realtors, June home sales in the state increased 18.7% year-over-year from 6,063 to 7,198 closed transactions. Mainly as a result of pent-up demand, sales increased 32.5% from May. With the sizable gain in June, sales are now up 3.5% year-to-date. As the COVID-19 pandemic continues to unfold, however, declining sales activity remains a possibility in the months ahead. Two more resources to review: Quarterly Report and Annual Report.
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Inventory: Homes listed for sale decreased 24.7% from 21,804 listings one year ago to 16,421 in June. Months of supply dropped from 3.6 to 2.3, reflecting a market where sellers generally have elevated bargaining power.
Pricing: The statewide median sales price in June was $193,977, an increase of 9.6% from one year ago and an increase of 4.8% from May. 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 June averaged 84 days on the market (DOM), 2 days faster than one year ago.
Forecast: June sales were 618 units or 9.4% above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 6,580 sales for the month, while actual sales were 7,198 units. ACRE forecast a total of 32,541 residential sales year-to-date, while there were 32,267 actual sales through June, a difference of 0.8%.
NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide rebounded at a record pace in June (seasonally adjusted annual rate), suggesting signs of a turnaround after three months of declines. Sales prices continued to rise as the nationwide median sales price increased 3.5% Y/Y, extending the streak of year-over-year price gains to 100 consecutive months.
When addressing the turnaround in sales activity, Lawrence Yun, NAR chief economist said: “The sales recovery is strong, as buyers were eager to purchase homes and properties that they had been eyeing during the shutdown. This revitalization looks to be sustainable for many months ahead as long as mortgage rates remain low and job gains continue.”
Yun also noted the impact of low inventory conditions, saying, “Home prices rose during the lockdown and could rise even further due to heavy buyer competition and a significant shortage of supply.”
ACRE commentary: Closed sales data from June shows that total residential sales increased 18.7% year-over-year, ending two consecutive months of declines. On the supply side, inventory (properties listed for sale) was tight before the pandemic, and continues to be constrained as listings declined 24.7% Y/Y. Limited inventory has played a significant role in supporting sales prices, which continue to trend upwards. The median sales price of $193,977 reflects an increase of 7.1% from one year ago and 4.8% from May. Pricing dynamics are driven by the law of supply and demand, always at work moving toward or away from market equilibrium (6 months of supply) - where buyer and seller have equal bargaining power. In June months of supply was at 2.3.
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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 the time period June 1 - 30, 2020. Thus, the performance represented is historical and should not be used as an indicator of future results, particularly considering the upcoming impact of COVID-19 on the housing market.