Will Alabama’s real estate market improve this fall?
Several Alabama real estate markets have seen all-time lows in available homes this year.
At the same time, premium apartments achieve premium prices.
How long can these conditions last? There may be some changes in the fall.
According to the University of Alabama’s Alabama Center for Real Estate, some framework conditions have changed over the summer.
Alabama home sales rose 3.9% year over year in August. However, sales fell 5.9% compared to the previous month, which is common for this time of year.
However, the monthly picture obscures the fact that sales in 2021 are up 15.3% year over year.
This means this year is likely to be a record year for transactions as housing demand and low interest rates combine to fuel the market.
You can see it in certain statistics. In August, Alabama homes spent an average of 39 days in the market, a record.
But if you take a closer look at each market, you will see more signs of a rabid market. Homes were snapped an average of seven days after listing in the Birmingham area and 13 days in Huntsville. Mobile was a bit more relaxed with 17 days. Montgomery was practically leisurely at 51 days, but that was 57% less than last year.
New homes are also being bought up, selling an average of 25 days, a record low and 43 days faster than August 2020.
Home price growth is showing some signs of slowing. The nationwide median sales price rose 6.6% yoy in August, after an average of 12.3% yoy in the first six months of the year.
As expected by some analysts, the state’s housing supply rose slightly by 0.2% from July. However, if you look back on 2020, you will find that offers are down 24.7% from last year. Earlier this year, in May, the level of available housing was back below 9,400 homes, the lowest level on record.
But supply is increasing as continued demand and pricing drive sellers into the market.
The center, in its monthly report, expects listings to gradually increase over the coming months as higher property prices bring more potential sellers to the market. Prices are on average 10.3% higher than in 2020, with the average retail price being $ 297,381.
Nationwide, the average 30-year fixed-rate mortgage rate rose from 2.88% to 3.01% last week, the largest weekly increase since mid-February. The average interest rate on 15-year fixed-rate mortgages also rose from 2.15% to 2.28%.
Mortgage applications for home purchases fell 1% last week, according to CNBC. However, analysts say the weakness in purchase demand is less due to rising interest rates and more to sky-high property prices.
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