Alabama home sales grow in January amid tight inventory
Sales: According to the Alabama Association of REALTORS, January home sales in the state increased 17.2% year-over-year (Y/Y) from 4,122 to 4,829 closed transactions, marking eight consecutive months of Y/Y gains. Following seasonal trends, sales decreased 24% from December. Two more resources to review: Quarterly Report and Annual Report.
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Inventory: Homes listed for sale decreased 39.8% from 17,951 listings one year ago to 10,815 in January, marking 71 consecutive months of year-over-year inventory declines. Months of supply (inventory to sales ratio) dropped from 4.4 to 2.2, reflecting a market where sellers generally have elevated bargaining power.
Pricing: The statewide median sales price in January was $186,909, an increase of 11.9% from one year ago and a decrease of 2.3% from December. 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 January averaged 67 days on the market (DOM), 25 days faster than one year ago.
New Construction: The 748 new homes sold represent 15.5% of all residential sales in the area in January. Total sales increased 14.7% year-over-year, extending the state’s streak of Y/Y gains in new home sales to 19 consecutive months. The median sales price in January was $268,616, an increase of 7.8% from one year ago and a decrease of 1.9% from December. New homes sold in an average of 49 days, 28 days faster than January 2020.
NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide increased 0.6% from December (seasonally adjusted annual rate). Sales increased significantly from one year ago, rising 23.7%. Sales prices continued to grow at higher rates than before the pandemic, rising 14.1% year-over-year.
Lawrence Yun, chief economist for NAR said, “Home sales continue to ascend in the first month of the year, as buyers quickly snatched up virtually every new listing coming on the market. Sales easily could have been even 20% higher if there had been more inventory and more choices. Home sales are continuing to play a part in propping up the economy. With additional stimulus likely to pass and several vaccines now available, the housing outlook looks solid for this year."
ACRE commentary: Home sales in Alabama increased for the eighth consecutive month in January, rising 17.2% year-over-year. The strong rebound in sales activity during the second half of 2020 has extended into 2021, with 21 of 24 markets in the state recording year-over-year gains in home sales during January. Buyers are incentivized by low mortgage rates, increasing their buying power during a time of rising sales prices, which increased 11.9% Y/Y in January. Sales prices continue to grow at a faster rate than before the pandemic, which could motivate more potential sellers to list their homes going forward. Statewide inventory, however, continues to tighten, declining almost 40% year-over-year, reaching an all-time low of 10,815 listings.
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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 January 1 - 31, 2020. Thus, the performance represented is historical and should not be used as an indicator of future results.