Nationwide summary: Home sales in Alabama in December fell for the seventh consecutive month from a year earlier, falling 35.5% year over year. Annual sales fell 12.6% from 2021 as low interest rates and changing buyer preferences contributed to the pandemic housing boom. Buyer demand has slipped below pre-COVID levels, with December sales down 20% from the five-year average.
Growth in home selling prices moderated in December, with the nationwide median selling prices rising 1.7% yoy (y/y), versus an average of 13.6% from January to November and below for the first time since December fell 5% in 2019. The nationwide average selling price fell 0.1% month-on-month, the second straight month-on-month decline. Going forward, slowing sales activity is expected to slow price growth to 2-4% in 2023.
Following seasonal trends, inventories fell 4.9% from November but are up significantly (58.5%) from December 2021, when increased demand pushed inventories to a record low. However, inventory is still relatively tight, with 13,824 properties for sale down 17.5% from the five-year average. Unsold inventory was at 3.2 months supply, below the equilibrium point of 4-5 months supply.
Sale: According to the Alabama Association of Realtors, December home sales in the state fell 35.5% year over year from 6,648 to 4,289 completed transactions. Following the seasonal trend, sales fell by 2.7% compared to November. Year-to-date sales are down 12.6%. Two other resources to review: quarterly report and annual report.
For all statewide housing data click here.
Inventory: December listings (13,824) were down 4.9% from November and up 58.5% yoy. At the current selling pace, all active inventory in the market would be sold in 3.2 months, same as in November and up from 1.3 in December 2021. The equilibrium point where buyers and sellers have roughly equal bargaining power is 4- deliver within 5 months.
Pricing: The nationwide average selling price in December was $234,764, down 0.1% from November but up 1.7% year-on-year. The different sample size (number of home sales in comparable months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as this will vary from neighborhood to neighborhood.
Homes sold in December were on the market for an average of 54 days, seven days longer than a year ago.
Forecast: December sales were 1,681 units, or 28.2%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE forecast 5,970 sales for the month while actual sales were 4,289 units. ACRE forecast year-to-date total sales in the state of 76,176, while there were 70,064 actual sales through December, an 8% difference.
New build: The 766 new homes sold accounted for 17.9% of all home sales in the state in December. Total sales rose 18.6% from November and fell 32.3% from a year earlier. The median selling price of $333,018 fell 5.3% from November but rose 3.7% year-on-year. New homes were sold in an average of 53 days, 28 days longer than in December 2021.
National summary: According to the National Association of Realtors (NAR), existing home sales fell 1.5% (seasonally adjusted annual rate) from November, marking the 11th consecutive month of slowing sales activity. All four regions reported year-over-year declines, and home sales were down 34% from December 2021.
The median selling price for all home types increased 2.3% year-over-year to $366,900, the 130th consecutive year-over-year increase. However, home prices have declined somewhat over the past five months from a record high of $413,800 in June.
Properties were sold in an average of 26 days, seven days longer than a year ago. Inventory was down 13.4% from November, but the 970,000 properties for sale represent a 10.2% increase from a year earlier. December supply months were down from 2.9 months from 3.3 in November and up from 1.7 a year ago.
Lawrence Yun, NAR’s chief economist, said: “December was another difficult month for buyers who continue to face limited inventory and high mortgage rates. However, expect sales to pick up again soon as mortgage rates have fallen significantly from their peak late last year.”
Yun added that price growth has slowed, saying, “House prices are still positive across the country, albeit slightly. Markets in about half the country are likely to offer potential buyers cheaper prices compared to last year.”
Cash sales accounted for 28% of all completed sales in December, up from 26% in November and 23% a year ago. Second home buyers and individual investors bought 16% of home sales in December, up from 14% in November but down from 17% a year ago.
Foreclosures and short sales accounted for about 1% of transactions in December, essentially flat from the previous month and a year ago.
Click here to view the entire monthly report.
The Alabama Residential Monthly Report is being developed in conjunction with the Alabama Association of Realtors.