How is the real estate market in Alabama?
What is going on in the Alabama Real Estate market? In Alabama real estate, we have seen increases in homes sold, increased prices, and dramatic reductions in available inventory. In the state of Alabama overall, prices of homes sold have increased over 15% from the same time last year (using August data). This goes along with the 9% increase in number of homes sold. In addition available homes for sale (inventory) has gone down over 30%. Just over two months of active listings statewide reflects a significant sellers market.
How is the real estate market in Central Alabama?
But we all know real estate is local. So how is the real estate in our Central Alabama/Montgomery area? Locally, prices have increased, but less than statewide. The median sales price of homes in the Montgomery area has increased to $177,500. This represents a significant increase of 7.6% over the same period in 2019. In addition the number of homes sold has increased 4.6 % . Although a significant increase, it is still less than the statewide increase of 9%. Similar to the overall state market, the Montgomery area market has about a two month inventory of active listings, also reflecting a sellers market.
Elmore County Real Estate
Looking closely at the Elmore County real estate statistics shows that even within our region the market varies. Elmore County is a popular county just north of Montgomery and is included in the Montgomery Area. Data show the average home sold in Elmore County costs more than in the overall Montgomery area ($196,672 compared with $177,500). This price is still less than the statewide median of $203,049. And the home sale prices in Elmore County increased 5.6% compared with 7.6% for the overall Montgomery area, and much less than the state sales price increase of 15.2%.
The total number of residential sales stayed about the same year over year in Elmore County, as did the days on market. What is most striking is the inventory of homes in Elmore County. There are only 164 single family homes for sale in Elmore County. (as of October 12, 2020) At the current rate of homes sold, (129 in the last 30 days) there is just over a one month supply of homes available.
To put things in perspective, let’s consider the national picture. Most everyone will agree 2020 has been a strange year to say the least. Nationwide as well as locally we have seen record low interest rates. The national data reported by the National Association of Realtors shows that real estate has been very active in 2020. This may come as a surprise to some. There has been a 10% increase in home sales year over year based on August data. Nationally prices are on the rise with an average price increase approaching 10% over 2019. The national median home price is closer to $300,000, compared to our relatively low housing costs in our state and local area. Inventories are low nationally, with about a 3 month supply, also considered a sellers market.
The availability of listings for sale has a major effect on the real estate economy. Purchasers looking to buy have limited inventory to choose from. A buyer is much more likely to experience multiple offer situations on a desirable property. This can be good news for sellers with fewer homes to compete with. But with lower inventory the number of sales is expected to decline and prices would be expected to increase (the “supply and demand” equation). Our area real estate market has been trending toward a sellers market over the past few years. However this year has made it clear with only a 1 to 2 month inventory of active listings available in our region.
So compared with national trends, our Central Alabama area has highly affordable home prices despite the price increase trends. However, we may be expecting prices to increase further if we continue to experience limited inventories. If you are looking to sell, now may be a good time for you to get your home on the market. If you are looking to buy, be sure to be ready to purchase when you start to look at homes. The most desirable properties will likely generate a lot of buyer interest and competition from buyers.
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