Huntsville/Madison County area residential sales totaling 299 units in January were 8 units or 2.7 percent above our monthly forecast but were 4.8 percent below the same period a year ago.
Supply: Huntsville housing inventory totaled 3,298 units, an increase of 475 units from last January and 16.3 percent above the 5-year January average of 2,836 units. New home inventory is up 3.8 percent year-over-year while existing single family is up 3.6 percent.
The inventory-to-sales ratio in January was 11.0 months of housing supply (7.4 months for new construction – up 17.5% from Jan’14). The market equilibrium (balance between supply and demand) is considered to be approximately 8-8.5 months during January. Huntsville is historically one of Alabama’s most balanced markets but it appears the market has, at least momentarily, got a little ahead of the recovery as it relates to additional new supply. With that said, the market in January began to mitigate the short-term excess as the inventory in Huntsville/Madison County experienced a .7 percent (22 units) decrease when compared to the prior month. This movement favorably contrast with historical data that indicate January inventory on average (‘10-’14) typically increases by 4.5 percent from the month of December.
Demand: Residential sales in January decreased 25.4 percent from the prior month. This direction is consistent with seasonal patterns and historical data indicating that January sales, on average (’10-‘14), decrease from the month of December by 28.0 percent. New home sales were down 12.5 percent from January 2013. Existing single family home sales accounted for 81 percent (up from 72% in Jan’14) of total sales, new homes sales accounted for 17 percent (up from 26% in Jan’14) while condos were 2 percent of sales (same as Jan ’14).
Pricing: The Huntsville median sales price in January was $155,000, an increase of .4 percent from January 2014 but a 8.8 percent decrease from the prior month as a result of the short-term supply/demand imbalance. This direction is consistent with historical data (’10-’14) indicating that the January median sales price traditionally decreases from the month of December by 4.0 percent. It’s important to note that pricing can fluctuate from month-to-month as the sample size of data (closed transactions) is subject to seasonal buying patterns so a broader lens as to pricing trends is appropriate. ACRE recommends contacting a local real estate professional to discuss pricing at the neighborhood level.
Industry Perspective: “Consumers are as positive about their personal finances at the start of 2015 as they have been since we launched the National Housing Survey in 2010, and this optimism seems to be spilling over into housing market attitudes,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “Consumers are more optimistic about the environment both for buying and for selling a home today, and the share who plan to own on their next move has jumped back up, reversing a three-month trend toward renting. These results are in line with lender optimism about future growth in their mortgage origination business, as shown in our Mortgage Lender Sentiment Survey™. Overall, these are good signs to start off 2015 and are consistent with our expectation that strengthening employment and economic activity will boost the speed of the housing recovery.” For full report, go HERE.
View the current monthly Huntsville Residential Report here.
The Huntsville Residential Monthly Report is work product developed in conjunction with the Huntsville Area Association of REALTORS to better serve North Alabama consumers. The ACRE monthly report is provided to illustrate the “general” market direction & trends when comparing prior periods with the most current available data. Real estate is local and statistics will fluctuate between areas within a city including subdivisions. ACRE recommends that you consult a local real estate professional for “specific” advice associated with your market.
About ACRE. ACRE was founded in 1996 by the Alabama Real Estate Commission, the Alabama Association of REALTORS and the Office of the Dean, UA Culverhouse College of Commerce. ACRE is not a state-funded entity, rather its operates in part because of the goodwill & generosity of our statewide ACRE Partners.
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