Sales: According to the Tuscaloosa MLS, Tuscaloosa-area residential sales totaled 185 units during February, up 6.9 percent from 173 homes sold during February 2017. Existing single-family homes accounted for 80 percent of residential sales, while condos represented 8 percent and newly constructed homes accounted for 12 percent. Two more resources to review: Quarterly Report and Annual Report.
For all of the Tuscaloosa area’s housing data, click here.
Forecast: February results were one unit or 0.5 percent above the Alabama Center for Real Estate’s monthly forecast. ACRE’s 2018 sales forecast projects 572 closed transactions during the first quarter of the year and 2,724 closed transactions for the Tuscaloosa area during 2018.
Supply: Tuscaloosa’s February housing inventory totaled 839 units, a decrease of 13.1 percent from February 2017. February inventory neither increased nor decreased from the prior month. Inventory has now declined 56.2 percent from the February peak (1,917 units) reached in 2008.
Seeking balance: The inventory for sale divided by the current monthly sales volume equals the number of months of housing supply. The market is considered to be in balance at approximately 6 months. The Tuscaloosa area has 4.5 months of housing supply, down from 6.8 months of supply during the previous month and down from 5.6 months this time last year.
Demand: February residential sales were 49.2 percent above the prior month. Historical data indicate that February sales on average (’13-’17) increase from January by 25.5 percent. Tuscaloosa-area homes selling in February averaged 82 days on the market, an increase of 1.2 percent from 2017. The five-year average for days on the market for February home sales is 110 days.
Pricing: The Tuscaloosa median sales price in February was $165,000, an increase of 7.5 percent compared to February 2017. The median sales price was down 6 percent from January. Historical data indicate that February median sales prices on average (2013-2017) decrease by 1.2 percent from January. 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: The 10-year treasury is a crucial indicator of economic expansion. As of March 1, 2018, the 10-year treasury stood at 2.88 percent, a slight increase from last month’s rate of 2.86 percent. Mortgage rates also experienced a slight increase recently as the current rate on a 30-year fixed-rate mortgage is 4.57 percent, up from 4.38 percent one month ago. As the economy continues to strengthen, people will have more money in their pockets with the intent to spend. This increase in spending will most likely create higher stock prices and lower bond prices. With this increase of confidence in the market, mortgage interest rates can be expected to increase.
The National Association of Home Builders (NAHB) produces economic analyses of the home-building industry based on government data. The Housing Market Index (HMI) depicts market conditions for the sale of new homes. The HMI ranges from 0 to 100; a rate greater than 50 represents good sales conditions.
The HMI in the South has stayed relatively steady in the past few months with a score of 73. However, the HMI is lower in some regions of the United States, such as the Northeast, which has a rate of 56. The West has a higher HMI of 77, and a better market for good housing conditions.
The Federal Housing Finance Agency uses the House Price Index (HPI) to measure the average price changes in repeat sales or refinancing on the same properties. The FHFA’s national HPI was up 6.7 percent from the previous year compared to Alabama, which has increased from the previous year by 5.6 percent. The HPI rose in all 49 states except for Mississippi.
Compared to the national housing market conditions, Alabama’s real estate market has been showing improvement. Although total residential sales in Alabama decreased 2.3 percent from January 2017, the statewide median sales price increased 2.3 percent from January 2017. Statewide, homes in Alabama are selling much more quickly than in recent years as the average days on the market decreased 19.6 percent from one year ago.
Click here to generate more graphs from the Tuscaloosa Monthly Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.