Sales: According to the North Alabama Multiple Listing Service, Huntsville/Madison County residential sales totaled 349 units during January, an increase in sales growth of 16.7 percent or 50 units from the same period last year. Two more resources to review: Quarterly Report and Annual Report.
For all of Huntsville’s area housing data, click here.
Forecast: Closed transactions in January were 22 units or 6.7 percent above our monthly forecast. ACRE’s year-to-date sales forecast through January projected 327 closed transactions while the actual sales were 349 units.
Supply: The Rocket City’s housing inventory totaled 2,617 units, a decrease of 21 percent from last January. New home inventory is down 310 units year-over-year while existing single-family inventory is down 366 units.
The inventory-to-sales ratio in January was 7.5 months of housing supply. The market equilibrium (balance between supply and demand) is considered to be about 6 months during January (NSA). Huntsville continues to move in a favorable direction when it comes to its inventory-to-sales ratio. The market in January experienced a 2.4 percent decrease in inventory when compared to the prior month. Historical data indicates a typical 5 percent increase from December to January.
Demand: Residential sales in January decreased by 27 percent from the prior month. This direction is consistent with seasonal patterns and historical data indicating that January sales, on average (2011-’15), decrease from December by 24.2 percent. New home sales made up 23 percent of sales, unchanged from the previous January. Existing single family home sales accounted for 75 percent (up from 74 percent in January 2015) of total sales, while condos were 2 percent of sales (down from 3 percent during January 2015).
Pricing: The Huntsville median sales price in January was $175,000, an increase of 13 percent from January 2015 and down 1.7 percent from the prior month. This month-over-month direction is consistent with historical data (2011-’15) indicating that the January median sales price on average decreases from December by 7 percent. It’s important to note that pricing can fluctuate 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: “Housing affordability is being constrained because the pace of growth in real income has not kept up with gains in real home prices as demand has grown faster than supply,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “On the bright side, consumers have been increasingly positive about their ability to get a mortgage, suggesting that credit tightness is not the main issue limiting housing market activity today, a feeling that we also see conveyed by lenders in our Mortgage Lender Sentiment Survey®. We expect further progress in the HPSI to be limited until income growth picks up or supply, particularly in lower-priced homes, expands more rapidly.” For more information, click here.
The Huntsville/Madison County Residential Monthly Report is work product developed in conjunction with the Huntsville Area Association of Realtors to better serve North Alabama consumers.