Click here to view or print the entire monthly report compliments of the ACRE Corporate Cabinet.

Sales: According to the Hunstville Area Association of Realtors,Huntsville-area residential sales totaled 644 units during March, an increase of 11.8 percent from one year ago, when sales totaled 576 units. Existing single-family homes accounted for 74 percent of all residential sales, while newly constructed homes were 24 percent and condo sales were 2 percent. Two more resources to review: Quarterly Report and Annual Report.

For all Huntsville-area housing data, click here.

Forecast: March sales for the Huntsville area were 76 units, or 13.4 percent, above the Alabama Center for Real Estate’s monthly forecast. ACRE projected 568 sales for the area during February, while the actual sales were 644 units. Year-to-date there have been 1,524 closed residential transactions in the area, 4.1 percent above ACRE’s forecast of 1,464 year-to-date sales.

Supply: Housing inventory in the Huntsville area totaled 1,767 listings during March, a decrease of 22.4 percent from the same month in 2017. March inventory was 0.1 percent below the prior month. This trend is inconsistent with historical data indicating that March inventory on average (2013-17) increases from February by 4.3 percent. The inventory-to-sales ratio in March was 2.7 months of housing supply. Restated, at the March sales pace, it would take 2.7 months to absorb the current inventory for sale. This is a decrease of 30.6 percent from 4 months of supply in March 2017. The market equilibrium (balance between supply and demand) is approximately 6 months.

Demand: March residential sales in the Huntsville area increased 47.8 percent from the prior month. This is consistent with historical data indicating that March residential sales on average (2013-17) increase from February by 22.7 percent. Homes selling in March averaged 71 days on the market, representing a decrease of 24.5 percent from the same month in 2017. Homes in the Huntsville area are selling much more quickly than in previous years, as the five-year days-on-market average for February is 115 days.

Pricing: The Huntsville-area median sales price in February was $197,000, an increase of 4.5 percent from the previous month and an increase of 6.7 percent from one year ago. Pricing can fluctuate from month to month as the sample size of data (closed transactions) is subject to seasonal buying patterns. ACRE recommends consulting a local real estate professional.

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 Huntsville Area March Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.

The Huntsville-Madison County Residential Report is developed in conjunction with the Huntsville Area Association of REALTORS to better serve North Alabama consumers.