Published On: 06.29.16 | 

By: Bryan Davis

Tuscaloosa home sales in May up 16 percent over the same period last year

Home sales in Tuscaloosa are up from last year and running ahead of sales forecasts. (iStock)

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 251 units during May, up 15.7 percent from the same period last year. The May average for sales from 2011 to 2015 was 189 units. Two more resources to review: Quarterly Report and Annual Report.

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

There were 251 total home sales in Tuscaloosa during May, an increase of 16 percent over last year.

There were 251 home sales in Tuscaloosa during May, an increase of 16 percent over last year.

Forecast: May results were 28 units or 12.5 percent above the Alabama Center for Real Estate’s monthly forecast. ACRE’s year-to-date sales forecast through May projected 897 closed transactions, while the actual sales were 975 units, a favorable difference of 8.7 percent.

Supply: Tuscaloosa May housing inventory totaled 1,181 units, a decrease of 19.9 percent from May 2015. May inventory dipped 0.5 percent from April. Historical data indicate that May inventory on average (2011-15) decreases from April by 1.8 percent. Inventory has now declined 41.2 percent from the May peak (2,008 units) reached in 2008.

Seeking balance: The inventory-to-sales ratio declined 30.7 percent year-over-year during May to 4.7 months. Restated, at the May sales pace, it would take 4.7 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 May.

Demand: May residential sales were 18.4 percent above the prior month. The increase is consistent with seasonal buying patterns and historical data indicating that May sales on average (2011-15) increase from May by 15.5 percent. Existing single-family home sales accounted for 83 percent of total sales (down from 88 percent in May 2015), while 11 percent were new home sales (up from 8 percent during May 2015) and 6 percent were condo buyers (up from 4 percent in May 2015).

Pricing: The Tuscaloosa median sales price in May was $169,900, an increase of 8.9 percent compared to May 2015. The median sales price was up 7.1 percent from April’s price. Historical data (2011-15) indicate that the median sales price in May typically increases from April by 6 percent. It should also 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: “Continued home price appreciation has been squeezing housing affordability, driving a two-year downward trend in the share of consumers who think it’s a good time to buy a home,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The current low mortgage rate environment has helped ease this pressure, and fewer than half of consumers expect rates to go up in the next year. While the May increase in income growth perceptions could provide further support to prospective home buyers as the spring/summer home-buying season gains momentum, the effect may be muted by May’s discouraging jobs report.” For the full report on home purchase sentiment, click here.

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