Sales: According to the Hunstville Area Association of Realtors,Huntsville-area residential sales totaled 437 units during February, an increase of 0.7 percent from one year ago, when sales totaled 434 units. Existing single-family homes accounted for 72 percent of all residential sales, while newly constructed homes were 25 percent and condo sales were 3 percent. Two more resources to review: Quarterly Report and Annual Report.
For all Huntsville-area housing data, click here.
Forecast: February sales for the Huntsville area were 38 units, or 8 percent, below the Alabama Center for Real Estate’s monthly forecast. ACRE projected 475 sales for the area during February, while the actual sales were 437 units. Year-to-date there have been 880 closed residential transactions in the area, 1.8 percent below ACRE’s forecast of 896 year-to-date sales.
Supply: Housing inventory in the Huntsville area totaled 1,768 listings during February, a decrease of 21.9 percent from the same month in 2017. February inventory was 3 percent below the prior month. This trend is consistent with historical data indicating that February inventory on average (2013-17) decreases from January by 36.1 percent. The inventory-to-sales ratio in February was 4 months of housing supply. Restated, at the February sales pace, it would take 4 months to absorb the current inventory for sale. This is a decrease of 22.5 percent from 5.2 months of supply in February 2017. The market equilibrium (balance between supply and demand) is approximately 6 months.
Demand: February residential sales in the Huntsville area decreased 1.4 percent from the prior month. This is inconsistent with historical data indicating that February residential sales on average (2013-17) increase from January by 15.8 percent. Homes selling in February averaged 73 days on the market, representing a decrease of 17 percent from the same month in 2017. Homes in the Huntsville area are selling much more quickly than in previous years, as the five-year days-on-market average for February is 116 days.
Pricing: The Huntsville-area median sales price in February was $188,500, a decrease of 0.3 percent from the previous month and an increase of 3 percent from one year ago. Pricing can fluctuate from month to month as the sample size of data (closed transactions) is subject to seasonal buying patterns. ACRE recommends consulting a local real estate professional.
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 Huntsville Area February Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.