Statewide residential sales fall 8.9% in April 2020
Sales: April home sales in Alabama decreased 8.9% year-over-year from 5,820 to 5,300 closed transactions. Going against seasonal trends, sales were down 6.9% from March. Sales are now up 4.9% year-to-date, but are likely to decline in the months ahead due to the growing economic impact of the COVID-19 pandemic. Two more resources to review: Quarterly Report and Annual Report.
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Inventory: Homes listed for sale decreased 16.4% from 21,481 listings one year ago to 17,956 in April. Months of supply dropped from 3.7 to 3.4, reflecting a seller’s market at the statewide level.
Pricing: The statewide median sales price in April was $182,485, an increase of 13.9% from one year ago and an increase of 3.7% from March. This indicator can fluctuate from month to month because of the sampling size of data and seasonal buying patterns. Homes sold in April averaged 89 days on the market (DOM), 3 days faster than one year ago.
Forecast: April sales were 410 units or 7.2% below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 5,710 sales for the month, while actual sales were 5,300 units. ACRE forecast a total of 19,539 residential sales year-to-date, while there were 19,635 actual sales through April, a difference of 0.5%.
NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide fell 17.8% during April (seasonally adjusted annual rate). This represents the second month of declining sales activity due to the pandemic, and the largest month-over-month drop since July 2010. Sales prices, however, remained somewhat stable. The nationwide median sales price for existing homes increased 7.4% Y/Y, extending the streak of year-over-year price gains to 98 straight months.
When addressing slowing economic activity, Lawrence Yun, NAR chief economist said: “The economic lockdowns – occurring from mid-March through April in most states – have temporarily disrupted home sales. But the listings that are on the market are still attracting buyers and boosting home prices.”
Yun added that “Record-low mortgage rates are likely to remain in place for the rest of the year, and will be the key factor driving housing demand as state economies steadily reopen. Still, more listings and increased home construction will be needed to tame price growth.”
ACRE commentary: Closed sales data from April shows that total residential sales declined 8.9% year-over-year. Sales prices, however, increased 13.9% Y/Y in April, a sizable gain. Inventory (properties listed for sale) was tight before the pandemic, and inventory continues to be constrained as listings declined 16% from one year ago. As expected, sales activity for the foreseeable future when compared to the prior year is likely to decline due to the growing economic impact of the pandemic. For additional context, April sales are up 5.2% when compared to the month's 5-year average. Sales prices are likely to remain stable or decline slightly later in the year if demand continues to soften. Pricing dynamics driven by the law of supply and demand are always at work moving toward or away from market equilibrium (6 months of supply) - where buyer and seller have equal bargaining power. In April months of supply was at 3.4.
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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 April 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.