Huntsville Housing Market Report | May 2023
Discover the latest housing market trends in Huntsville, AL and the surrounding areas. We’ll explore key factors such as average sales prices, housing inventory, average days on market, affordability, and the percentage of list price received. We’ll give insights into how these elements are shaping the current market conditions and understand the potential implications for both buyers and sellers. Stay informed about the evolving dynamics of the Huntsville housing market and be prepared to make informed decisions regarding your housing and real estate needs.
Huntsville Average Sales Price & Homes Sold
Year over year the average price home in Huntsville has risen $5,000 from $382,000 to $387,000. With slightly higher prices and higher interest rates, that has affected affordability, which has affected the number of units of homes being sold in our area. Homes sales were down from 795 this time last year to 665 in May. That's increased the number of homes available on the marketplace, which is a very good thing.
Huntsville Housing Inventory & Average Days on Market
Last year, we were at dangerously low levels of available homes on the market. Year over year we’re up from 879 to 1,460, which is a sign we're moving in the right direction but we're still nowhere near what we need to be and nowhere close to historical numbers for the Huntsville market or the US market.
Since we're still below what is considered normal and the number of units being sold is less, the dangerous thing is once interest rates come down and that demand comes roaring back, that will eat into our supply in this marketplace. We're simply not going to have enough homes available for everyone looking to buy.
Average days on market have increased dramatically to 34 days on market, up from a record low number of 8 days last year. We're getting closer to a healthier market in terms of days on market, but we're still below average trends at 45+ days. Homes are still moving fast, just not as fast as they were a year ago.
Housing Supply & Affordability
If you look at the overall broader market in our area, supply has increased. We're up to 2.4 months' worth of supply, which is a good thing because we’re trending in the right direction. The challenge is a balanced market is considered 4 to 6 months, so we're still well below that even though demand has been artificially deflated through higher interest rates.
Through high-interest rates, the Fed is just kind of playing around with numbers and really not making a big impact on supply because demand has actually been affected by interest rates. Once interest rates go low again, that demand will come roaring back and supply is likely to dip again as the Fed is projecting lower rates in 2024 and 2025.
Affordability is the big key. What can people afford with the median income? We were hovering around the 100 level this time last year, which means the median income can afford the median price range home, which is where you want to be. We were at 97 this time last year but we've taken a big hit and are all the way down to 86.
That is not a good trend. Obviously, as interest rates get lower, that will help with affordability in our area but the challenge will be once interest rates go down, that's likely going to increase our prices as well. We'll wait and see what the affordability index does. If you look at the math and economics of things, we need more affordable housing in this area and there are some builders that are working hard to provide that affordable product in our area.
Percentage of List Price Received
We were above 100 this time last year for percentage of list price received, we’re now sitting at 98.6%. That is a trend in the right direction, especially for first-time homebuyers that need some closing costs and that need a little bit in negotiations to be able to get into their first home.
I look at a balanced market as being at about that 97% range. We're still in a seller's market and that's really concerning considering that we have much higher interest rates. Being at 98.6% in a seller’s market means there's just a ton of pent-up demand sitting on the sidelines just waiting to be released once interest rates go down.
Posted by Matt Curtis
If you're looking to date the rate and marry the home by getting into a home before interest rates go down but before prices start to go back up dramatically again here in the Huntsville area, shoot us an email firstname.lastname@example.org or contact us here.