It’s a good time to sell a home in Alabama. Just make sure you have a place to move after you deposit the check.
The combination of a historically low number of homes on the market, coupled with a pent-up demand for homes, made for a particularly interesting time in the Alabama housing market.
This is shown by statistics from the Alabama Center for Real Estate (ACRE) at the University of Alabama.
The nationwide median sales price in July was $ 218,374, a record high and an 11% increase over the previous year. The median price rose 0.8% in just one month.
Homes sold in July were on the market an average of 43 days, a record low and 38 days faster than a year ago.
The offers fell by 29.3% compared to the previous year.
This tense market has been an integral part of it for some time.
The last time Alabama saw a year-over-year increase in its available home stock in the market was in February 2015.
Currently the available houses on the market represent a sales value of around 1.5 months. A year ago there was two months worth of inventory out there.
That spells a sellers market.
Why are the prices so high?
Stuart Norton, data analytics coordinator at ACRE, said the COVID-19 pandemic had played a huge role.
“The importance of living space has always been critical,” he said. “But it is all the more so because people are working more from home and people are now looking at it in a different light.”
But the pandemic isn’t the only factor at work.
Anyone who remembers the Great Recession of 2007-09 remembers the role that housing construction played in it.
An “overbuilt market” and loose lending led to the crash. In 2005, Alabama received more than 30,000 building permits. In five years it was little more than 10,000.
Last year there were fewer than 20,000.
And the construction industry, like other industries, is struggling with a shortage of skilled workers nationwide. That part of the equation seems to be improving.
The Associated General Contractors of America said housing construction companies created 17,000 jobs last month in the US for the fourth straight month.
At the same time, builders are struggling with a shortage of skilled workers, material shortages and long delivery delays.
The demand for every home product has increased, said Norton, and has been for a year.
“The builders are selling them asap,” he said. “Especially in the range of $ 350,000 and below.”
Even before the pandemic, the U.S. housing market had a very small number of homes on the market.
But the lack of inventory in the market could improve.
Alabama real estate offers rose 12 percent compared to June, in line with national trends. That means more people are putting their homes on the market, maybe looking for the big buck.
There is good news for buyers – price growth is starting to slow down a bit. Prices were up 11% year over year in July, which is still significant but below the 15% recorded last fall.
“That doesn’t mean everyone’s house is worth 11% more than it was last year,” said Norton. “Much of this sales activity takes place at the top end of the market.”
Norton said he anticipates prices will slow to single-digit increases by the end of the year. Lawrence Yun, chief economist of the National Association of Realtors, shares this opinion.
“While we shouldn’t expect property prices to fall in the coming months, there is a possibility that they will flatten out as inventories begin to improve,” said Yun.