Sales: According to the Tuscaloosa MLS, Tuscaloosa-area residential sales totaled 247 units during March, up 11.3 percent from 222 homes sold during March 2017. Existing single-family homes accounted for 80 percent of residential sales, while condos represented 7 percent and newly constructed homes accounted for 13 percent. Two more resources to review: Quarterly Report and Annual Report.
For all of the Tuscaloosa area’s housing data, click here.
Forecast: March results were 14 units or 6 percent above the Alabama Center for Real Estate’s monthly forecast. ACRE’s 2018 sales forecast projected 572 closed transactions during the first quarter of the year, 2.8 percent above the 556 units actually sold during that quarter.
Supply: Tuscaloosa’s March housing inventory totaled 859 units, a decrease of 8.6 percent from March 2017. March inventory increased by 2.4 percent from the prior month. Inventory has now declined 53.7 percent from the March peak (1,857 units) reached in 2008.
Seeking balance: The inventory for sale divided by the current monthly sales volume equals the number of months of housing supply. The market is considered to be in balance at approximately 6 months. The Tuscaloosa area has 3.5 months of housing supply, down from 6.8 months of supply during the previous month and down from 4.2 months at this time last year.
Demand: February residential sales were 99.2 percent above the prior month with an increase of 123 units. Historical data indicate that March sales on average (’13-’17) increase from February by 27.3 percent. Tuscaloosa-area homes selling in March averaged 67 days on the market, a decrease of 20.2 percent from 2017. The five-year average for days on the market for March home sales is 104 days.
Pricing: The Tuscaloosa median sales price in March was $170,000, an increase of 0.3 percent compared to March 2017. The median sales price was down 3.1 percent from February. Historical data indicate that March median sales prices on average (2013-2017) increase by 8.2 percent from February. It should 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: Interest rates are likely to increase throughout 2018. The Federal Reserve’s Federal Open Market Committee (FOMC) met on March 21 and approved a quarter-point rate hike. As of April 5, the 10-Year Treasury stood at 2.83 percent, down slightly from 2.88 percent one month ago. Although daily yield curve rates have decreased slightly in the past month, many analysts are projecting that the 10-year Treasury will pass 3 percent in the months to come. According to Wells Fargo, the current interest rate on a 30-year fixed-rate mortgage is 4.58 percent (annual percentage rate).
As the overall economy continues to expand, it is not surprising to see growth in Alabama’s residential new construction market. February sales of newly constructed homes grew 22 percent month-over-month and 14 percent year-over-year. Statewide*, there were 507 new construction sales in February, up from 416 total sales in January and up from 445 total sales in February 2017. Year-to-date, new construction sales are up 6 percent from 2017.
February new construction sales in select Alabama markets
- Baldwin County – 100
- Birmingham Metro Area – 125
- Huntsville Metro Area – 112
- Lee County – 36
- Mobile Metro Area – 17
- Montgomery Metro Area – 35
- Tuscaloosa County – 15
New construction building permits and housing starts data are indicators of larger economic conditions. Generally speaking, the housing market is one of the first sectors to expand or contract during times of growth or decline. According to the U.S. Census Bureau, 1,225 building permits for new construction were issued in Alabama during February. Building permits increased 1.1 percent from January, when 1,212 permits were issued, and increased 10.1 percent from February 2017, when 1,113 permits were issued. ACRE projected 1,219 housing starts in Alabama during February. Housing starts decreased 2.9 percent from January (1,256) and increased 13 percent from February 2017 (1,079). Year-over-year increases in both building permits and projected housing starts are encouraging news, as they hint toward continued overall economic growth during the second quarter of 2018.
*ACRE receives new construction sales data from the following counties/areas: Baldwin County, Birmingham Metro Area, Calhoun County, Huntsville Metro Area, Lee County, Mobile Metro Area, Montgomery Metro Area, Tuscaloosa County and the Wiregrass Region. Combined, these counties/areas represent +/- 70 percent of Alabama’s total population.
Click here to generate more graphs from the Tuscaloosa Monthly Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.