Huntsville Housing Market Report | August 2024

The latest housing market data for August 2024 provides key insights into affordability, inventory levels, and the overall balance of supply and demand. Housing affordability in North Alabama has improved, with the median household income now aligning closely with the median home price. Inventory levels have seen a substantial rise, returning to 2018 figures, creating more options for buyers and signaling a shift towards a balanced market. The Huntsville, Athens, and Morgan County submarkets all exhibit unique trends, with some areas experiencing a noticeable uptick in sales and others providing more affordable opportunities for homebuyers. Understanding these trends is essential for both buyers and sellers as they navigate the evolving real estate landscape in North Alabama.

Key Takeaways from the August 2024 Housing Market Report

Housing affordability is now near balance, with a score of 98. This means the median household income can largely afford the median-priced home. This is significant, as we had been hovering in the low 90s, slightly outside the ideal affordability range in the Huntsville market. Affordability has improved thanks to a combination of dropping interest rates and slightly lower home prices compared to their summer highs. This is great news, especially for first-time buyers entering the market in Q4 and into 2025.

I expect some of the best homebuying opportunities to emerge over the next couple of months. This is partly due to the current climate of fear and uncertainty, influenced by the upcoming election and potential recession. This window might be short, though, as rates are falling quickly, and the Fed is signaling further cuts, which will likely increase demand in 2025. With the current uncertainty and dropping interest rates, this period presents a strong opportunity for seasoned investors and savvy first-time buyers looking to enter the market.

Good news for buyers: inventory levels have returned to 2018 levels, thanks to a 35.7% year-over-year increase in homes on the market. We're officially in a balanced market, with 4.1 months' worth of supply. A balanced market is typically defined as having 4 to 6 months of inventory.

If you're considering a townhome, they are currently a great deal. Townhome supply has surged by 157.2%, putting the market in a buyer’s zone with 6.6 months of inventory. A buyer’s market is defined by anything above six months of supply. I've spoken with local developers, and some are starting to pull back on future townhome projects due to the reduced demand. Townhomes were once considered an affordable option, but they haven't been well-received by buyers as prices increased. Developers are withdrawing, creating a unique opportunity to strike a deal on new construction townhomes now.

Huntsville, AL Housing Market Report

Let's take a look at the Huntsville submarket. The average sales price in Huntsville continues to rise, increasing by $9,000 year-over-year to $381,000. This is down from the summer peak of $390,000, but the overall trend is still upward. Home sales remain relatively flat, with 644 homes sold compared to 630 last year, marking only a 2.2% increase. This trend of flat sales is consistent not only across Alabama but throughout the U.S. as well.

Both 2023 and 2024 have been slow years in terms of sales volume, largely due to higher interest rates. To put things in perspective, the U.S. housing market peaked during the pandemic with over 6 million homes sold, while 5 million is considered more typical. Currently, the national figure is in the low 4 million range, indicating a continued downtrend in the number of homes sold.

The good news for buyers is the significant increase in available homes. The number of homes on the market has surged by 58.2%, from 1,678 to 2,655, offering more options for those looking to buy.

Athens, AL Housing Market Report

Now let's shift to Athens, which has become a standout in the region. The average sales price in Athens has risen by $10,000 year-over-year, reaching $380,000, up from $370,000 last year. Like Huntsville, the average price in Athens has dipped from its summer peak of $393,000.

In contrast to Huntsville, Athens saw a significant jump in home sales, with a 42.9% increase. A total of 223 homes were sold this year, compared to 163 last year. This increase is partly driven by the growing inventory, which has seen a 65.7% rise, from 578 homes to 958 homes on the market.

Morgan County Housing Market Report

Morgan County is emerging as a popular choice for buyers seeking affordability as prices in Athens and Huntsville continue to climb. The average sales price in Morgan County fell by $4,000 year-over-year, from $295,000 to $291,000, also down from the summer high of $297,000.

Home sales in Morgan County saw a solid 19.8% increase, with 151 homes sold compared to 126 during the same period last year. Like other markets in the region, the number of homes on the market has also grown, with a 49.5% increase, rising from 311 to 465 homes. Decatur remains an affordable and attractive option within the North Alabama housing market.

New Listings, Pending Sales, Closed Sales, & Days on Market

Looking at the overall market, new listings are relatively flat year-over-year, with a 3.6% increase: 1,479 listings in 2024 compared to 1,428 in 2023. Pending sales are up 6.5%, with 1,144 homes under contract versus 1,074 last year, signaling some positive movement. Closed sales are also mostly flat, rising just 2.8% from 1,075 to 1,105 homes.

Days on market has increased significantly, with a rise of over 33%. Homes are now staying on the market for an average of 40 days, compared to just 29 days last August. This shift points toward a more typical market pace.

Average Sales Price & Percent of List Price Received

The average sales price in our area increased by 2%, going from $346,188 to $353,031. This is a noticeable drop from the summer high of $371,865.

For sellers wondering how close they can expect to get to their asking price, the percent of list price received hasn't changed much year-over-year. It was 98.4% last year and has slightly decreased to 98.1%. However, that number can be misleading, as many builders are using negotiations like rate buy-downs and closing cost credits, which aren't directly reflected in the sales price. Factoring in these hidden negotiations, we're likely closer to a 97% list-to-sale ratio, which is typical for a balanced market.

Housing Affordability & Months' Worth of Supply

A major development for homebuyers is the improvement in housing affordability. We've been experiencing a housing affordability crisis, with affordability scores in Huntsville dropping from highs of 170 to a low of 91. A score of 100 means the median household income can afford the median-priced home. We've been below that threshold, but we're now back near equilibrium with a score of 98, which is great news for the North Alabama market.

Supply has also increased, from 3.1 months' worth of inventory to 4.1 months. We're now in a balanced market, with supply levels between 4 to 6 months considered ideal. Some submarkets are even exceeding 4.1 months, putting them in a buyer's market, while certain price points remain in a seller’s market.

If you're considering selling or buying a home, it's essential to understand the specific market conditions in your area. At Matt Curtis Real Estate, we break down supply levels by price point and school district during our listing and buyer presentations to provide tailored advice.

Overall Housing Inventory

Overall, housing inventory is up 35.7%, with 4,131 active listings compared to 3,044 last year. While this increase may seem significant, it only brings us back to 2019 levels. We're still not at the supply levels typically seen in the Huntsville market.

As we've reviewed these broad market statistics, it's important to remember that every submarket—whether based on price point, school district, or location—operates differently. For a detailed analysis of your specific situation, reach out to Matt Curtis Real Estate, the number one real estate team in Alabama for the past five years. We’re here to guide you through the process, whether you're selling or buying, and help you make informed decisions about your investment.

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