Huntsville’s housing demand has increased in past year

Huntsville’s housing demand has increased in past year
Year-to-date home sales are up 10 percent from 2016 sales and are well ahead of sales projections. (iStock)

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

Sales: According to the North Alabama Multiple Listing Service, Huntsville/Madison County residential sales totaled 592 units during September, a growth in sales of 4 percent or 23 units from the same period last year. Year-to-date sales increased 10.1 percent from 2016. Two more resources to review: Quarterly Report and Annual Report.

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

Forecast: Closed transactions in September were 69 units or 13 percent above the Alabama Center for Real Estate’s monthly forecast. ACRE’s year-to-date sales forecast through September projected 4,583 closed transactions, while the actual sales were 5,313 units, a favorable difference of 16 percent.

Supply: The Rocket City’s housing inventory totaled 2,204 units, a decrease of 15.1 percent from last September. New home inventory is down 44 units year-over-year, while existing single-family inventory is down 344 units.

The inventory-to-sales ratio in September was 3.7 months of housing supply. The market equilibrium (balance between supply and demand) is considered to be about 6 months. The market in September experienced a 2.1 percent decrease in inventory when compared to August. Historical data indicate a typical 0.3 percent increase from August to September.

Demand: Residential sales in September increased by 12.3 percent from August. This direction contrasts with seasonal patterns and historical data indicating that September sales, on average (2012-2016), decrease from August by 9 percent. New home sales made up 25 percent of sales, a decrease from 27 percent in September 2016. Existing single-family home sales accounted for 73 percent of total sales, up from 71 percent, while condos were 2 percent of sales, the same as the prior year.

Pricing: The Huntsville median sales price in September was $188,882, a decrease of 0.5 percent from September 2016 and down by 3.1 percent from the prior month. This month-over-month direction is consistent with historical data (2012-2016) indicating that the September median sales price on average decreases from August by 2.3 percent. Pricing can fluctuate as the sample size of data is subject to seasonal buying patterns. ACRE recommends contacting a local real estate professional to discuss pricing at the neighborhood level.

Industry perspective: “The impacts from this season’s hurricanes on the U.S. economy were wide-ranging but should dissipate over time. These include the loss of momentum in consumer spending and residential investment, as well as a decline in September payrolls and August home sales and contract signings,” said Fannie Mae Chief Economist Doug Duncan. “We expect economic activity to rebound in coming months. The recovery will likely be slower for home sales and home building, however, as the labor shortage and rising material prices will likely worsen after the hurricanes, exacerbating already-tight inventory. While we expect full-year economic growth for 2017 to come in at the same rate projected in our prior forecast, we now believe that total home sales will be essentially flat this year compared with the moderate rise predicted in the prior forecast. Despite muted underlying inflation, we continue to expect the Fed to raise rates for the third time this year in December.”

The Huntsville/Madison County Residential Monthly Report is developed in conjunction with the Huntsville Area Association of Realtors to better serve North Alabama consumers.

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