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Sales: According to the North Alabama Multiple Listing Service, Huntsville/Madison County residential sales totaled 514 units during November, a growth in sales of 14.2 percent from the same period last year. Year-to-date sales increased 12.1 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 November were 61 units or 13.5 percent above the Alabama Center for Real Estate’s monthly forecast. ACRE’s year-to-date sales forecast through November projected 5,524 closed transactions, while the actual sales were 6,427 units, a favorable difference of 16.3 percent.
Supply: The Rocket City’s housing inventory totaled 2,049 units, a decrease of 18 percent from last November. New home inventory is down 39 units year-over-year, while existing single-family inventory is down 396 units.
The inventory-to-sales ratio in November was 4 months of housing supply. The market equilibrium (balance between supply and demand) is considered to be about 6 months. The market in November experienced a 13 percent increase in inventory when compared to October. Historical data indicate a typical 0.9 percent decrease from October to November.
Demand: Residential sales in November decreased by 14.3 percent from October. New home sales made up 29 percent of sales, a decrease from 30 percent in November 2016. Existing single-family home sales accounted for 68 percent of total sales, up from 67 percent, while condos were 3 percent of sales, the same as the prior year.
Pricing: The Huntsville median sales price in November was $183,872, a decrease of 3.4 percent from November 2016 and 5.5 percent from the prior month. 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 economy and real estate markets continue to show they are resilient. Regardless of the economic metric — GDP, monthly jobs or home prices — the dashboard registers an ‘all-systems-go’ economy,” said KC Conway, director of research and corporate engagement at the Alabama Center for Real Estate. “GDP started the year off with its best Q1 reading in several years and followed it up with above 3 percent readings for Q2 and Q3. (This year) will be the first year since the financial crisis that the economy registered an annual GDP greater than 2 percent. It was just plus 1.6 percent for 2016.
“Job growth is healthy as well. The first week of December the market received solid monthly jobs reports from both ADP (which measures private industry job formation) and the BLS (the government’s monthly jobs report produced by the Bureau of Labor Statistics). ADP reported a healthy new 190,000 private-sector jobs for November and a monthly average of 210,000 jobs over the prior 12 months. The BLS reported November jobs at a higher-than-expected level of 228,000 jobs – and its year-to-date monthly average is 174,000. Unemployment remains low at 4.1 percent, and inflation was just reported on December 13th at 1.7 percent for the “core rate” (which excludes the more volatile food and energy components) and 2.2 percent overall annualized due to higher energy prices.
“The Federal Reserve is taking note of the expanding economy and followed up its prior two rate hikes earlier in 2017 with a 0.25 percent rate increase at its December 13th meeting. Housing conditions remain conducive to growth in new supply and more transaction activity. Single-family home inventories are below demand levels across the nation, Southeast and most Alabama markets. The national rate of appreciation is running above 6 percent on the heels of 5-plus percent in 2016. This is leading builders and lenders to be more receptive to adding inventory. New housing starts and permits will likely end 2017 at or above the 1.3 million units level, split 30 percent multifamily and 70 percent single-family. The outlook heading into 2018 is the best we have seen in a decade.”
The Huntsville/Madison County Residential Monthly Report is developed in conjunction with the Huntsville Area Association of Realtors to better serve North Alabama consumers.