Sales: Huntsville/Madison County residential sales totaled 468 units in March, an increase in sales growth of 21.2 percent or 82 units from the same period last year. This represents the best sales results for the month of March since 2007. Year-to-date sales through March are 6.2 percent above 2014.
Forecast: Closed transactions in March were 89 units or 23.5 percent above the Center’s monthly forecast. ACRE’s year-to-date sales forecast through March projected 998 closed transactions while the actual sales were 1,097 units, a favorable cumulative variance of 9.9 percent.
Supply: Huntsville housing inventory totaled 2,993 units, a decrease of .5 percent or 16 units from last March and only .5 percent above the 5-year March average of 2,983 units. New home inventory is up 21.5 percent year-over-year while existing single family inventory is down 3.5 percent.
The inventory-to-sales ratio in March was 6.4 months of housing supply (5.3 months for new construction – up 35.9% from March’14 when it stood at 3.9 months). The market equilibrium (balance between supply and demand) is considered to be approximately 7.5 months during March (NSA). Huntsville was one of Alabama’s most balanced markets in March. The market in March experienced a 8.6 percent (81 units) decrease when compared to the prior month. This movement favorably contrast with historical data that indicate March inventory on average (‘10-’14) typically increases by 3.4 percent from the month of February.
Demand: Residential sales in March also increased 41.8 percent from the prior month. This direction is consistent with seasonal patterns and historical data indicating that March sales, on average (’10-‘14), increase from the month of February by 23.4 percent. New home sales remain soft, down 12.9 percent from March 2014. Existing single family home sales accounted for 76 percent (up from 70% in Mar’14) of total sales, new homes sales accounted for 20 percent (down from 28% in Mar’14) while condos were 4 percent of sales (up from 2% in Mar’14).
Pricing: The Huntsville median sales price in March was $158,432, a slip of 3.9 percent from March 2014 and 5.6 percent decrease from the prior month. This direction unfavorably contrast with historical data (’10-’14) indicating that the March median sales price traditionally increases from the month of February by .2 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 being patient prior to entering the housing market. Our March survey results emphasize how critical attitudes about income growth are to consumers’ outlook on housing,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “We’ve seen modest improvement in total compensation resulting from a strengthened labor market. However, income growth perceptions and personal financial expectations both eased off of recent highs, consistent with Friday’s weak jobs report. Simultaneously, the share of consumers expecting to buy on their next move has declined. We believe the recent setback in consumer sentiment should be short lived if early signs of income growth bear out and occur in proportion to expected interest rate increases. Meanwhile, the wait for housing expansion continues.” For full report, go HERE.