Top 5 Markets for New Construction (September 2019)

Top 5 Markets for New Construction (September 2019)

Topics: Research, Residential Real Estate, Research

Markets: Athens (Limestone County), Baldwin County - All, Huntsville-Madison County, Lee County, Statewide

The Alabama Center for Real Estate created the following rankings based on new construction as a percentage of total residential sales during September. 

  1. 1. Athens Area: 31.8%
  2. 2. Lee County: 28%
  3. 3. Huntsville Area: 26.5%
  4. 4. Baldwin County: 24%
  5. 5. Tuscaloosa Area: 16.5%

 

September New Construction Recap

Statewide Overview: Alabama’s existing-home market had an impressive year in 2018 as total sales surpassed the high water mark set in 2005, and the state’s new construction market is trending in the same direction. Total new construction sales have grown year-over-year (Y/Y) in 43 of the past 47 months, an impressive streak going back to November 2015. September’s new construction sales increased 17.4% from 680 closed transactions in September 2018 to 798 in September 2019. After 7 consecutive months of inventory declines in the new construction market, listings were essentially flat in September as they declined one unit compared to September 2018’s 2,990 units for sale. Median sales price for new construction in the state, however, increased 7.3% from one year ago. Stay tuned to see if the state’s new construction and resale markets continue to match or surpass last year’s impressive results. 

Athens:  After falling to number two last month, Athens has climbed it’s way back to the number one spot for new construction in the month of September. Total sales of newly constructed residential housing in the Athens area (Limestone County) decreased 22.2% Y/Y from 63 closed transactions in September 2018 to 49 in September 2019. Although statewide inventory was flat in September, new construction inventory has decreased Y/Y for 15 consecutive months in the Athens area. In September, listings declined 27.2% from 151 one year ago to 110 currently. Partially due to the large drop in inventory, September’s median sales price increased 32.4% from $237,856 to $314,900. Supply is remaining tight as there were 2.2 months of new construction supply in September. Athen’s DOM average is down from 31 days last year to 26 days currently. New construction represented 31.8% of all residential transactions in the area during September, down from 37.1% one year ago.

Lee County: Total sales of newly constructed residential housing in Lee County decreased 11.5% Y/Y from 52 to 46 closed transactions. Going against statewide trends, new construction inventory increased 4.5% Y/Y from 265 units for sale in September 2018 to 277 units currently. As inventory saw a Y/Y increase, it is not a surprise to see the median sales price for new construction in the area rise 10.7% Y/Y from $256,457 to $284,015. Months of new construction supply increased from 5.1 to 6.0 months Y/Y. New construction listings sold an average of 62 days slower than one year ago, as the area’s DOM average increased from 54 to 116 Y/Y. New construction represented 28% of all residential transactions in the area during September, slightly down from 33.8% one year ago.

Huntsville: Huntsville (Madison County) continues to lead other metro areas in the state in total new construction sales. There were 180 units sold in September, representing a significant increase (14.6%) compared to the 157 units sold from one year ago. Despite statewide trends seeing an increase in Y/Y median sales price, Huntsville had a Y/Y decline in September. The September median sales price decreased 4.0% Y/Y from $254,900 to $244,589. Mirroring statewide trends in the new construction market, inventory decreased 15.6% from 525 to 443 listings. Months of new construction supply remains tight at 2.5 months, and average days on market decreased from 52 days one year ago to 37 currently. New construction represented 26.5% of all residential transactions in Huntsville area during September, slightly up from 24% one year ago. 

Baldwin County: Total sales of newly constructed residential housing in Baldwin County increased 42.9% Y/Y from 105 to 150 closed transactions. September’s median sales price decreased, falling 12.8% Y/Y from $263,500 one year ago to $229,900 currently. Similar to Lee County, Baldwin County’s new construction inventory increased 3.4% Y/Y from 582 to 602 listings. Months of supply in Baldwin county saw a slight decrease Y/Y from 5.5 months last year to 4.0 months currently. Average days on market increased 23 days from 116 last year to the current level of 93 days. New construction sales represented 24% of all residential transactions in the area in September, up from 18.8% one year ago. 

Tuscaloosa: Sliding into the top five areas for new residential construction in September is Tuscaloosa. Total sales of newly constructed residential housing in the Tuscaloosa area increased 26.7% Y/Y from 30 sales last September to 38 in September 2019. Following statewide trends, median sales price posted significant gains in September, as it increased 11.1% Y/Y from $225,790 in September 2018 to $250,775 in September 2019. Going against the statewide trend of declining new construction inventory, listings in the area increased from 119 to 121 units Y/Y. Months of new construction supply decreased from 4.0 to 3.2, while average days to sell fell from 98 days one year ago to 74 days currently. New construction sales represented 16.5% of all residential transactions in September, up from 13.6% last year.

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Alabama Housing Finance Authority
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