Huntsville, Alabama Housing Market Report | February 2024

The latest statistics are in for the Huntsville, Athens, and Morgan County housing markets, as well as all of North Alabama for February 2024. A surge in new listings and strong sales activity indicates a shift in market dynamics. Price gains are stabilizing, yet poised to increase with anticipated interest rate drops. We take a close look at housing affordability and supply, shedding light on evolving trends shaping the real estate landscape. Whether you're an experienced investor or a potential homeowner, this comprehensive analysis provides invaluable insights for buying or selling a home in Huntsville, Alabama.

Huntsville, Athens, & Morgan County Submarkets 

The average sales price has leveled off and experienced a slight decrease, with a $6,000 drop compared to last year, from $374,000 to $368,000. Yet, there's been an uptick in the number of homes sold, with 545 homes sold this February compared to 452 last year, marking a 20.6% increase. Sales are clearly on the rise in 2024. Additionally, there's been a rise in the number of homes available for buyers to choose from, with a 24.9% increase in overall homes on the market in the Huntsville area.

The Athens area continues to stand out in the north Alabama market, showing steady growth. The average sales price saw a slight increase of $1,000, rising from $355,000 to $356,000. Moreover, there was a significant surge in the number of homes sold, with a 39.8% increase from 113 homes sold last February to 158 this year. There's also an increasing inventory becoming available on the market as more builders are constructing in this area, with a 39.1% increase in the number of homes sold.

The Morgan County market, known for its affordability and proximity to jobs in the Huntsville area, has seen a $5,000 decrease in average sales prices compared to last year, dropping from $284,000 to $279,000. There has been a slight increase in the number of homes sold, by 4%. Nevertheless, there's been a significant 39.8% increase in the number of homes available on the market. This market is showing signs of cooling off, so one can anticipate increased inventory stacking up in Morgan County if this trend continues. With fewer homes sold compared to the increase in homes on the market, there may even be a slight softening in the Morgan County market during the spring and summer selling season.

New Listings, Pending Sales, & Closed Sales

An encouraging sign that we're seeing in the marketplace is the increase in new listings. We're seeing an increase across the north Alabama area of over 29.8%, which is back to 2022 levels, 1,314 new listings in February versus 1,012 this time last year. That is a great sign for buyers going into the busy spring and summer season as there simply has not been enough inventory out there to choose from. It looks like the mortgage rate lockdown effect is starting to lift a little bit as interest rates are starting to come down and more and more sellers are coming off of their high 2% to low 3% interest rate to move up or transition into another market with the sale of our homes.

There are increased pending sales as well. This market is one of the strongest markets we've seen in the last couple of years. Pending sales are up 13.9% year over year, 1,072 versus 941. We're still about 17% below 2022 levels. So we are seeing a healthy increase over last year, but nowhere near the record levels that we saw the last few years. Closed sales are also up 12.8%, 887 versus 786 this time last year.

Days on Market, Average Sales Price, & Percent of List Price Received

Days on the market have increased year over year from 41 to 49, which may feel like an eternity for those who were selling homes just a couple of years ago. Yet, we're still slightly below historical norms. So, 49 days on the market still signifies a seller’s market at that number.

Average sales prices have stabilized across all of north Alabama, decreasing on average by 1.2% from $340,247 down to $336,323.

The percentage of list price received has slightly increased. Sellers are getting a bit closer to their asking price, which was at 97.7% at this time last year; it’s now at 98.1%. This number may be somewhat skewed because some sellers have made price reductions, and the percentage of list price is measured against the last price reduction rather than the initial list price. Thus, this number may be slightly skewed. Overall, I believe that the percentage of list price has even decreased year over year if you consider the original list price to sales price ratio.

Housing Affordability, Housing Supply, & New Listings

Housing affordability has decreased year over year. We were at 99, where a score of 100 indicates that the median household income could afford the median price range home. We've dropped from that 99 score down to 93. Nonetheless, we're up month over month from 89 to 93, which is a positive sign with prices declining slightly year over year this month.

Supply has also increased from 2.5 months to 3.1 months, technically reflecting a seller's market. The typical balanced market ranges from 4 to 6 months of supply. Therefore, being below that at 3.1 months means we're technically in a seller's market.

Inventory, as we've discussed across all the different cities, is up across north Alabama, rising from 2,640 listings this time last year to over 3,102. That's a staggering 135% increase from the record lows experienced over the last couple of years. It's a 135% increase from 2020 and an even larger increase compared to 2021. Listings and inventory are definitely heading in the right direction here in the north Alabama area.

Huntsville Housing Trends in February 2024

One of the significant trends we're observing is that new listings are up by 29.8%. I anticipate this number to further rise into March and April. We've witnessed some of the largest numbers of signed listings in both January and February over the last couple of years, and many of these homes have yet to hit the market. Expect to see an increasing number of listings available in April, May, and throughout the summer season as more sellers put their homes on the market.

March is proving to be a strong sales month; although March isn't over yet, it appears to be one of the busiest we've had in the last couple of years. I anticipate a busy spring and summer selling season, perhaps the busiest since 2022.

Price gains have recently leveled off, but we should expect prices to likely begin rising again as interest rates are predicted to start dropping either this summer or even into the early fall. The Fed is signaling three rate decreases this year. As interest rates start to decrease, anticipate those price gains to transition from leveling off to increasing in the Huntsville market in 2024.

I believe the overall interest rate drops will be beneficial for affordability in Huntsville. We're currently at a score of 93, which is an increase from the previous month's score of 89. I anticipate that we'll get closer to the magical 100 number as interest rates start to decrease. However, depending on how much prices increase, that will help determine whether we can maintain a score of 100, where the median household income can afford the median price range home. I think in the long term, Huntsville will fall short of that. Nonetheless, over the next few months, we're likely to be very close to that score of 100.

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