Tuscaloosa housing market remains strong in March, inventory continues to dip

Tuscaloosa housing market remains strong in March, inventory continues to dip
Condo sales nearly doubled as a percentage of Tuscaloosa's overall home sales from March 2016 to March 2017. (Bryan Davis/ACRE)

Click here to view or print the entire monthly report compliments of the ACRE Corporate Cabinet.

Sales: According to the Tuscaloosa MLS, Tuscaloosa-area residential sales totaled 222 units during March, down slightly from 226 homes sold during March 2016. Two more resources to review: Quarterly Report and Annual Report.

For all of the Tuscaloosa area’s housing data, click here.

Forecast: March results were five units or 2 percent above the Alabama Center for Real Estate’s monthly forecast. ACRE’s 2017 sales forecast through March projected 530 closed transactions, while the actual sales were 562 units.

Home sales were down slightly in Tuscaloosa in March compared to last year, as inventory continued to drop below 1,000 units as well.

Supply: Tuscaloosa March housing inventory totaled 940 units, a decrease of 25 percent from March 2016. March inventory dipped by 3 percent compared to February. Historical data indicate that March inventory on average (2012-16) increases from February by 1.5 percent. Inventory has now declined 49 percent from the March peak (1,857 units) reached in 2008.

Seeking balance: The inventory-to-sales ratio declined 23 percent year-over-year during March to 4.2 months. Restated, at the March sales pace, it would take 4.2 months to absorb the current inventory for sale. The market equilibrium (balance between supply and demand on a non-seasonally adjusted basis) is considered to be approximately 6 months during March.

Demand: March residential sales were 28 percent above the prior month. This is consistent with seasonal buying patterns and historical data indicating that March sales on average (2012-16) increase from February by 27 percent. Existing single-family home sales accounted for 80 percent of total sales (down from 83 percent in March 2016), while 10 percent were new home sales (down from 12 percent in 2016) and 9.9 percent were condo sales (up from 5 percent).

Pricing: The Tuscaloosa median sales price in March was $169,561, an increase of 6 percent compared to March 2016. The median sales price was up 10.5 percent from February’s price. Historical data (2012-16) indicate that the median sales price in March typically increases from February by 6.2 percent. It should be noted that differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. Consult with a real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.

Industry perspective: “Our economic forecast remains in a conservative holding pattern as we await word on the particulars of the new Administration’s plans for fiscal stimulus,” said Fannie Mae Chief Economist Doug Duncan. “In the meantime, economic sentiment from most industry stakeholders continues to reach new heights: consumers, as demonstrated by our National Housing Survey, are more positive than at any time since the survey’s inception in 2010 about the direction of the economy, while homebuilders’ optimism remains near an 11-year high. Tight inventory remains a boon to home prices and Americans’ net worth, but it also continues to price out many would-be first-time homebuyers. However, our research suggests that aging millennials, now boasting higher real wages, are beginning to narrow the homeownership attainment gap.”

Click here to generate more graphs from the Tuscaloosa March Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply. 

The Tuscaloosa Residential Monthly Report is developed in conjunction with the Tuscaloosa Association of Realtors to better serve West Alabama consumers.

Related Stories