Shoals-area home sales rebound in February
Sales: According to the Shoals Area Association of Realtors, February residential sales increased 23.6% year-over-year from 157 to 194 closed transactions. Following seasonal trends, sales increased 55.2% from January. Sales are now up 12.3% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
For all of the Shoals Area’s housing data, click here.
Inventory: Total homes listed for sale in February declined 55.7% year-over-year from 612 to 271 listings. Months of supply declined from 3.9 to 1.4, reflecting a market where sellers generally have elevated bargaining power.
Pricing: The area’s median sales price in February was $144,950, a decrease of 1.4% from one year ago and a decrease of 3.4% from January. 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 February averaged 44 days on the market (DOM), 22 days faster than February 2020.
Forecast: February sales were 4 units, or 2.0%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 198 sales for the month, while actual sales were 194 units. ACRE forecast a total of 374 sales in the area year-to-date, while there were 319 actual sales through February, a difference of 14.7%.
NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide decreased in February, falling 6.6% from January (seasonally adjusted annual rate). However, sales did increase year-over-year, rising 9.1% from February 2020. Sales prices continue to grow at higher rates than before the pandemic, rising 15.8% year-over-year. Rising home prices are largely a result of housing inventory remaining at a record low of 1.03 million listings in February, representing a record decline of 29.5% year-over-year.
Lawrence Yun, chief economist for NAR said, “Despite the drop in home sales for February – which I would attribute to historically-low inventory – the market is still outperforming pre-pandemic levels. I still expect this year’s sales to be ahead of last year's, and with more COVID-19 vaccinations being distributed and available to larger shares of the population, the nation is on the cusp of returning to a sense of normalcy. Many Americans have been saving money and there's a strong possibility that once the country fully reopens, those reserves will be unleashed on the economy."
Yun also cautioned that home sales could slow in the months ahead as higher prices and rising mortgage rates decrease home affordability.
ACRE commentary: Home sales in Alabama increased 14.7% year-over-year (Y/Y) in February, marking nine consecutive months of Y/Y gains. The strong rebound in demand seen during the second half of 2020 has extended into 2021. Year-over-year growth rates, however, have moderated somewhat since reaching a peak of 26.6% in the fourth quarter of 2020. Home sales prices continued their upward trend in February, rising 13.1% Y/Y, mainly a result of market fundamentals (increased demand and continued reduction in supply). Housing inventory in the state reached a record low of 9,950 listings in February, falling 44% Y/Y, a record decline.
Click here to view the entire monthly report.
The Shoals Area Residential Monthly Report is developed in conjunction with the Shoals 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 February 1 - 28, 2021. Thus, the performance represented is historical and should not be used as an indicator of future results.