Montgomery-area home sales increase again in March
Sales: According to the Montgomery Area Association of REALTORS, March home sales in the area increased 35.8% year-over-year (Y/Y) from 428 to 581 closed transactions, marking ten consecutive months of Y/Y gains. Following seasonal trends, sales increased 32.1% from February. Sales are now up 31% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
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Inventory: Homes listed for sale decreased 59.1% year-over-year from 1,579 to 646 listings. Months of supply decreased from 3.7 to 1.1, reflecting a market where sellers generally have elevated bargaining power.
Pricing: The median sales price in March was $194,000, an increase of 21.5% from one year ago and a decrease of 0.7% from February. 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 March averaged 80 days on the market (DOM), 26 days faster than March 2020.
Forecast: March sales were 38 units, or 7.1%, above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 543 sales for the month, while actual sales were 581 units. ACRE forecast a total of 1,383 residential sales year-to-date, while there were 1,377 actual sales through March, a difference of 0.43%.
New Construction: The 83 new homes sold represent 14.3% of all residential sales in the area in March. Total sales increased 93% year-over-year, extending the area’s streak of Y/Y gains in new home sales to 12 consecutive months. The median sales price in March was $304,649, an increase of 0.7% from one year ago and a decrease of 7.4% from February. New homes sold in an average of 87 days, 8 days slower than March 2020.
NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide decreased for the second consecutive month in March, falling 3.7% from February (seasonally adjusted annual rate). However, sales did increase 12.3% year-over-year. The median sales price for existing homes hit a historic high of $329,100, rising 17.2% year-over-year, also a record gain. Rising home prices are largely a result of extremely low housing inventory. The 1.07 million units listed for sale represent a decline of 28.2% year-over-year, resulting in 2.1 months of supply.
Lawrence Yun, chief economist for NAR said, “Consumers are facing much higher home prices, rising mortgage rates, and falling affordability, however, buyers are still actively in the market. The sales for March would have been measurably higher, had there been more inventory. Days-on-market are swift, multiple offers are prevalent, and buyer confidence is rising."
Yun added that the economic outlook is encouraging and that mortgage rates are still historically low, even with the recent uptick.
ACRE commentary: Home sales in Alabama increased 23.4% year-over-year (Y/Y) in March, marking 10 consecutive months of Y/Y gains. The strong rebound in demand seen during the second half of 2020 has continued into the first quarter of 2021, with home sales rising 18.9% Y/Y during that period. Home sales prices continued to trend upwards in March, rising 16.6% Y/Y, mainly a result of market fundamentals (increased demand and continued reduction in supply). Housing inventory in the state reached another record low of 9,721 listings in March, falling 46.4% Y/Y, also a record decline.
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The Montgomery Residential Monthly Report is developed in connection with the Montgomery Area 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 March 1 - 31, 2021. Thus, the performance represented is historical and should not be used as an indicator of future results.