Editor’s Note: All information in this article reflects data provided to the Alabama Center for Real Estate for the time period March 1-31, 2020. Thus, 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: March home sales in the Huntsville area increased 16.5% year-over-year from 569 to 663 closed transactions. Following seasonal trends, sales increased 19.7% from February. Sales are up 11.8% year-to-date, but are likely to moderate amid the COVID-19 pandemic and resulting decline in economic activity. Two more resources to review: Quarterly Report and Annual Report.
For all Huntsville-area housing data, click here.
Inventory: Homes listed for sale decreased 24.2% from 1,157 to 877 listings. Months of supply dropped from 2 months to 1.3, reflecting a seller’s market in the area.
Pricing: The median sales price in March was $242,000, an increase of 15.8% from one year ago and an increase of 5.3% 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 March averaged 36 days on the market (DOM), selling 19 days faster than in March 2019.
Forecast: March sales were 35 units, or 5%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 698 sales for the month, while actual sales were 663 units. ACRE forecast a total of 1,798 residential sales year-to-date, while there were 1,801 actual sales through March, a difference of 0.3%.
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NAR commentary: Existing home sales nationwide increased slightly in March, even as a decline was expected because of the impact of COVID-19. According to the National Association of Realtors (NAR), total sales increased 3.8% year-over-year from approximately 400,000 to 415,000 closed transactions. However, the seasonally adjusted annual rate declined 8.5% from February 2020. While sales are currently up 7.1% year-to-date, they are likely to moderate amid the coronavirus pandemic.
The nationwide median existing-home price increased 8% in March, marking 97 consecutive months of year-over-year gains. The nationwide median sales price is now up 7.7% year-to-date, and many experts believe that prices are likely to remain stable in the months ahead, very much unlike the housing crisis of 2008, when market conditions and underlying fundamentals were quite different.
Lawrence Yun, chief economist for NAR, said about the seasonally adjusted annual rate decline: “Unfortunately, we knew home sales would wane in March due to the coronavirus outbreak. More temporary interruptions to home sales should be expected in the next couple of months, though home prices will still likely rise.”
Regarding what’s currently on the market, Yun said, “Earlier in the year, we watched inventory gradually tick upward, but with the current quarantine recommendations in place, fewer sellers are listing homes, which will limit buyer choices. Significantly more listings are needed, and more will come on to the market once the economy steadily reopens.”
ACRE commentary: In Alabama, March sales results were quite surprising as they increased 6.6% year-over-year. The concern, however, is that many of the transactions closing in March were under contract prior to the pandemic. Sales are now up 11.1% year-to-date (YTD), but the first quarter of 2019 was relatively weak in terms of closed sales activity, suggesting YTD growth rates should not be overemphasized. The real wild card is April and May sales as people adjust to selling a home in the COVID era.
Home price appreciation continued as the median sales price increased 7.7% year-over-year, marking 29 consecutive months of gains. While properties listed for sale nationwide decreased 10.2% year-over-year, Alabama’s residential listings continued to tighten, decreasing 13%. Low inventory levels were a significant factor contributing to rising sales prices throughout 2019 and continued into March. With fewer listings, it is not surprising to see homes selling at a slightly quicker pace. Homes selling in Alabama during March spent an average of 88 days on the market, 10 days faster than one year ago.
The Huntsville Area Residential Monthly Report is developed in connection with the Huntsville Area Association of Realtors.