Before the coronavirus pandemic, the only things obstructing regional residential growth was the construction industry labor shortage and a desperate shortage of housing inventory.
Still, during the pandemic, there is nothing – at least nothing new – slowing the residential housing market in North Alabama. Not a virus, not consumers, not builders, not banks, not regulation, and not the economy.
Home-buying and homebuilding are booming.
“We have sold more homes in 2020 than were sold at the same time in 2019,” said Josh McFall, CEO of the Huntsville Area Association of Realtors. “Even amidst the stress of a pandemic and busy housing market there was no slow down, and in fact, the only thing the association has seen take a downturn is housing inventory.
“I don’t even think we can classify the inventory problem as directly related to the pandemic. Beginning in January, we reported the lowest number of homes available for sale in the MLS since the MLS has been keeping track of those records in the mid-1990s.
“Madison County has been the big driver of that because we have the most MLS listings due to the denser population. Inventory is low, but we consistently slide down the entire MLS because our average days on market has also slid down.”
He said the days on market number for North Alabama combined is 42 days but, in Madison County, that number is 26 days and consistently falling.
“I remember five years ago we were reporting 80 or 90 days on the market and here in 2020 and during a pandemic, as of June that number is 26 days,” he said. “So, we had this housing shortage before COVID.”
Last month, around 840 homes were sold in Madison County. Of those, 600 were resales and 230 were new construction. Those 230 are either new construction, a prospect build that was sold, or a custom build that entered the MLS.
“So, what we are saying is, more builders are feeling more confidence in the local economy, so they’re ramping up their building, while at the same time, they have a lot of pressure on them due to the labor shortage and rising supply costs,” McFall said. “But if you look at all the MLS to date, there were 2,307 available homes on the entire market; 926 are in Madison County.”
One-third of houses under construction sell every month so the industry must build a lot of houses to keep up with demand,
“Sales prices are continuing to tick up from month to month so you can see it is a supply and demand issue,” said McFall.