Some Alabama real estate markets have seen historic lows in available housing this year.
At the same time, premium housing is seeing premium prices.
How long can those conditions last? Fall may see some changes.
According to figures from the Alabama Center for Real Estate at the University of Alabama, a few conditions changed over the summer.
In August, home sales in Alabama increased 3.9% year-over-year. However, sales decreased 5.9% month-over-month, which is usual for this time of year.
But the monthly picture obscures the fact that sales in 2021 are up 15.3% over the previous year.
That means this year will likely see a record year for transactions, as demand for housing and low interest rates are combining to heat the market.
You can see it in certain statistics. In August, homes in Alabama spent an average of 39 days on the market, a record.
But drill down into the individual markets, and you’ll see further signs of a rabid market. Homes were snapped up an average of seven days after listing in the Birmingham area, and 13 days in Huntsville. Mobile was a little more relaxed, at 17 days. Montgomery was a practically leisurely 51 days, but that was a 57% decrease from a year before.
New homes are being snapped up as well, selling at an average of 25 days, a record low and 43 days faster than August 2020.
Home price growth is showing some signs of moderating. The statewide median sales price increased 6.6% year-over-year in August, down from an average of 12.3% year-over-year over the first six months of the year.
As some analysts expected, the state’s housing supply increased slightly from July, at .2%. But if you look back to 2020, you’ll find listings are down 24.7% from a year ago. Earlier this year in May, the level of available housing back was below 9,400 homes, the lowest on record.
But supply is inching up, as continuing demand and pricing is driving sellers to the market.
The center, in its monthly report, expects listings to gradually increase in the coming months as higher home prices bringing more potential sellers to the market. Prices are 10.3% higher on average than they were in 2020, with the median sales price checking in at $297,381.
Nationally, the average interest rate on 30-year fixed-rate mortgages jumped last week, from 2.88% to 3.01%, the largest weekly increase since mid-February. The average rate on 15-year fixed mortgages also inched higher, from 2.15% to 2.28%.
Mortgage applications to purchase a home fell 1% last week, according to CNBC. But analysts say the weakness in purchase demand is less about rising interest rates and more about sky-high home prices.
