Editor’s Note: All information in this article reflects data provided to the Alabama Center for Real Estate (ACRE) for Feb. 1-29. The performance represented is historical and should not be used as an indicator of future results, particularly considering the upcoming impact of COVID-19 on the housing market.
Sales: February home sales in the Huntsville area increased 6.5% year-over-year from 520 to 554 closed transactions. Going against seasonal trends, sales were down 5.1% from the prior month. Sales are now up 14% year-to-date, but are likely to moderate amid growing uncertainty surrounding the spread of COVID-19. Two more resources to review: Quarterly Report and Annual Report.
Inventory: Homes listed for sale decreased 37.2% from 1,290 listings one year ago to 810 in February. Months of supply dropped from 2.5 months to 1.5, reflecting a continued seller’s market in the area.
Pricing: The median sales price in February was $229,950, an increase of 14.4% from one year ago and an increase of 0.4% from the prior month. This indicator can fluctuate from month to month because of the sampling size of data and seasonal buying patterns. Homes sold in February averaged 40 days on the market (DOM), 20 days faster than in February 2019.
Forecast: February sales were 24 units, or 4.2%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 578 sales for the month, while actual sales were 554 units. ACRE forecast a total of 1,098 residential sales year-to-date, while there were 1,138 actual sales through February, a difference of 3.6%.
ACRE’s statewide perspective: While February sales results were very encouraging, up 7.2% year over year, they do not reflect the current turmoil in the stock market or the sizable hit to the global economy expected from the coronavirus and subsequent social quarantines. The statewide market is up 14.2% year to date, but sales are likely to moderate in the months ahead. Home price appreciation continued to climb as the median sales price increased 7.8% year over year, marking 28 consecutive months of gains. While properties listed for sale nationwide decreased 9.8% year over year, Alabama’s residential listings continued to tighten, decreasing 13.9%. Low inventory levels were a significant factor contributing to rising sales prices throughout 2019 and continued into February. With fewer listings, it is not surprising to see homes selling at a slightly quicker pace. Homes selling in Alabama during February spent an average of 93 days on the market, a decrease of four days from one year ago.
NAR’s national perspective: Existing home sales increased substantially in February, rising 7.7% year-over-year from about 311,000 closed transactions one year ago to 335,000 currently. Sales are up 9.4% year to date. The nationwide median existing-home price increased 8% in February, marking 96 consecutive months of year over year gains. Lawrence Yun, chief economist for the National Association of Realtors (NAR),said, “February’s sales of over 5 million homes were the strongest since February 2007. I would attribute that to the incredibly low mortgage rates and the steady release of a sizable pent-up housing demand that was built over recent years. These figures show that housing was on a positive trajectory, but the coronavirus has undoubtedly slowed buyer traffic, and it is difficult to predict what short-term effects the pandemic will have on future sales.”
Click here to view the entire monthly report.
The Huntsville Area Residential Monthly Report is developed in connection with the Huntsville Area Association of Realtors.