Alabama home sales fell 23% year-over-year in October. – Update Alaba

Nationwide Summary: Alabama home sales fell in October as escalating mortgage rates dampened buyer demand. Sales were down 23.4% YoY (YoY) and down 8.9% YoY. Buyer demand retreated back below pre-Covid levels, with October sales down 12.6% from the five-year average. Further declines are likely in the coming months, with a 10-15% slowdown expected from last year’s pace.

Growth in home sales prices moderated in October, with the national median sales price rising 11.4% year-over-year, down from an average of 14.6% between January and September. The national median sales price has increased by 1.7% since September. Going forward, slowing sales and rising inventory are likely to moderate home price growth to 8-10% by the end of the year.

Inventories have increased slightly since September, but have risen significantly (40.1%) since October 2021, when increased demand pushed inventories to near-record lows. However, inventory is still relatively tight as the 14,370 properties listed for sale are 20.9% below the five-year average. Unsold inventory was at 3.1 months of supply, i.e. below the breakeven point of 4-5 months of supply.

Sales: October home sales in the state fell 23.4% year over year from 6,350 to 4,863 closed transactions, according to the Alabama Association of Realtors. In line with seasonal trends, but to a greater extent, sales were down 17.9% compared to September. Sales fell by 8.9% year-on-year. Two more resources to check out: Quarterly report and Annual Report.

For all national housing data, click here.

Inventory: October listings (14,878) were up 3.5% from September and 40.1% from a year earlier. At the current sales rate, all active inventory on the market would sell in 3.1 months, up from 2.4 in September and 1.7 in October 2021. The break-even point, where buyers and sellers have roughly equal bargaining power, is the 4-5 bid months.

Price: The national median sales price in October was $247,105, up 1.7% from September and up 11.4% from a year ago. Different sample sizes (number of residential property sales in comparison months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional on pricing as it will vary from neighborhood to neighborhood.

Homes sold in October had an average of 44 days on the market, one day faster than a year ago.

Forecast: October sales were 1,298 units, or 21.1%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE forecast 6,160 sales for the month, while actual sales were 4,863 units. ACRE forecast a year-to-date total of 64,562 sales in the state, while actual sales through October were 61,365, a difference of 5%.

New design: The 680 new homes sold represent 14% of all residential sales in the state in October. Total sales decreased by 24.9% compared to September and by 19.3% compared to the previous year. The median sales price of $338,688 was down 4.6% from September and up 15.1% year over year. New homes sold in an average of 38 days, 13 days longer than in October 2021.

National Summary: According to the National Association of Realtors (NAR), existing home sales fell 5.9% (seasonally adjusted annual rate) since September, marking the ninth straight month of slowing sales activity. All four regions posted year-over-year declines, with home sales slowing 28.4% from the October 2021 pace.

The median sales price for all home types rose 6.6% year-over-year to $379,100, marking the 128th consecutive year-over-year gain. However, home prices have retreated somewhat over the past four months from June’s record high of $413,800.

Properties sold in an average of 21 days, two days slower than a year ago. Inventory is slowly rising from lows seen during the post-pandemic housing boom. The 1,220,000 listings at the end of October represent a decrease of 0.8% from September and from October 2021. The 3.3 month supply in October was up from 3.1 in September and 2.4 a year ago.

Lawrence Yun, NAR’s chief economist, said: “In October, more potential homebuyers were pushed out of mortgage qualification as mortgage rates rose higher. The impact is greater in expensive areas of the country and in markets that have seen significant increases in house prices in recent years.”

Yun said inventories remain tight and contributed to nearly one-quarter of October listings selling above list price. He said: “”Inventory levels are still tight and therefore some homes for sale are still receiving multiple offers. In October, 24% of households received above the asking price. In contrast, homes that were on the market for more than 120 days saw their prices decrease by an average of 15.8%.

Cash sales accounted for 26% of all closed sales in October, up from 22% in September and 24% a year ago. Second-home buyers and individual investors bought 16% of homes sold in October, up from 15% in September but down from 17% a year ago.

Foreclosures and short sales accounted for about 1% of October transactions, down from 2% in September and the same as a year ago.

Click here view the full monthly overview.

The Alabama Residential Monthly Report is prepared in connection with Alabama Association of Realtors.

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