Alabama’s spring housing market in a unique position
According to the March 2023 Alabama Economic and Real Estate Report released by the Alabama Association of REALTORS®, Alabama’s spring housing market is in a unique position.
Historically, sales in April begin to pick up with the warmer spring weather, but there is conflicting data that suggests potential headwinds in the housing market. “Alabama is seeing mixed signals in our spring market data,” says RaJane Johnson, Alabama REALTORS® 2023 President. “Active residential listings are staying on the market longer and fewer new listings are coming available. This data signals a slower spring market that is likely to remain competitive for Alabama’s buyers.”
Alabama had considerably more active residential listings at the end of March compared to one year ago, representing a 64.1% annual increase. However, March listings were down 177 listings relative to last month and mark the fourth consecutive month of decline.
Home sales activity dipped in March as home buyers remain sensitive to movement in mortgage rates. After peaking at 6.73 percent in the second week of March, the average 30-year fixed rate has fallen to 6.27 percent as of April 13, 2023. A single percentage point makes a $155 difference in the monthly payment for a 30- year mortgage on the average priced home in Alabama.
“It’s a unique housing market. While our report has found marginal increases in consumer confidence may help spur home buying this spring season, there is also conflicting data that suggests the opposite,” says Alabama REALTORS® CEO Jeremy Walker. “The combination of potentially higher interest rates and tightening lending standards may continue to weigh on home buying activity.”
Here are more key indicators from March home sales, according to our latest report:
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• Home sales: Alabama had 6,891 home sales in March. This is a decrease of 1,912 sales compared to March of last year. The decline in sales for March marks the seventh consecutive month of declining sales. Increasing interest rates to start the month weighed on the housing market.
• Home prices: The median sales price decreased by $13,846 compared to a year ago, to $204,841. This is an annual decrease of 6.3 percent. The average, or mean, sales price decreased by 11.9 percent year-over-year in March 2023. While there was a year-over-year decline, the average price increased by 0.4 percent compared to February 2023.
• Sales volume: The sold dollar volume was 1.6 billion in March, a decrease of 0.8 billion from last March. This is a 33.3 percent decrease. This decline in sold dollar volume is driven primarily by the decrease in the number of sales rather than by decreasing sales prices.
• Days on the market: Homes sold in March were on the market for 58 days, on average. This figure is 24 days longer compared to one year ago, but 9 fewer days compared to February 2023. In line with seasonal trends, Alabama homes stayed on the market for a shorter period in March 2023 compared to the previous four months.
• Supply levels: Housing supply levels continued their upward trajectory in March 2023 as there were 2.4 months of supply. This figure is more than the 1.5 months available one year ago and is the highest level of supply since June 2020.
The Alabama Economic and Real Estate Report is published monthly and annually by the Alabama Association of REALTORS®. Click here to view the full monthly and annual reports.