Huntsville, AL Housing Report |  April 2024

In the April 2024 North Alabama Real Estate Market Report, we examine the latest housing trends in Huntsville, Athens, and Decatur. This analysis covers key metrics such as average sales price, days on market, and housing affordability. From shifts in inventory levels to changes in buyer-seller dynamics, we provide a comprehensive overview of the current market landscape. Whether you're a buyer or seller, this report offers valuable insights to guide your decisions in the North Alabama real estate market.

Huntsville, AL April 2024 Housing Report

Let's start by examining the primary submarkets in the North Alabama area. First up is Huntsville. The average sales price has increased by $12,000 compared to last year, rising from $375,000 to $387,000.

In terms of homes sold, there has been a slight decrease. This April saw 586 homes sold, compared to 618 last year. However, there has been a significant increase in the number of homes on the market. In April, 1,973 homes became active listings in the Huntsville market, compared to 1,382 this time last year, marking a 42.7% increase.

I've been mentioning this for a couple of months now: many people are simply tired of waiting for the Fed to lower interest rates, so they're eager to move forward with their lives here in Huntsville.

Athens April 2024 Housing Report

The Athens market has truly been the standout in terms of price appreciation and growth among all the submarkets of North Alabama. Athens is nearly matching the price trends seen in Huntsville, highlighting the strength of the local economy, including advancements in schools, businesses, and the development of restaurants in the area.

Despite this, the average sales price actually saw a decrease of $3,000 year over year, dropping from $367,000 to $364,000. It remains to be seen if this trend will persist, but it's likely to closely mirror the trajectory of Huntsville in the future.

Another notable trend is the decrease in the number of homes sold in Athens. Last year, there were 198 homes sold compared to 172 this April. Additionally, Athens witnessed a significant increase in the number of homes on the market, jumping from 524 last year to 777 this year, marking a 48.3% increase.

We still face a shortage of available homes in both Huntsville and Athens. We're still hovering around the inventory levels seen in 2019 before the pandemic, which is roughly half of what we typically have in these areas. While we're not yet where we want to be, inventory is steadily increasing, and many individuals are growing impatient with waiting for the Fed to lower interest rates.

Decatur April 2024 Housing Report

Decatur had a remarkable month, with the average sales price rising by $27,000 from $273,000 to $300,000. This increase reflects the growing affordability challenges in the Huntsville and Athens markets. Many individuals are turning to Decatur for more affordable housing options, as evidenced by the rise in homes sold from 127 to 149 compared to this time last year.

This surge in sales aligns with the decrease in homes sold in Athens and Huntsville. With Decatur offering more affordability, it's natural to see an uptick in sales activity in this area.

Many potential sellers are considering capitalizing on this heightened demand, as indicated by the 91% increase in homes on the market, rising from 167 to 310 compared to last April. It remains to be seen how this will impact prices in the Decatur area going forward. If demand remains strong, Decatur may fare well despite challenges. However, if demand subsides, we might observe slight price adjustments due to the influx of additional demand into the Decatur market.

New Listings, Pending Sales, & Closed Sales

One of the major headlines is the surge in new listings. Across the entire North Alabama region, there were 1,627 new listings in April of 2024 compared to 1,243 this time last year, marking a 30.9% increase. Once again, individuals are growing impatient with the Federal Reserve and are opting to move forward with their lives, whether it's due to family changes, educational pursuits, job relocations, or other reasons. They're choosing to list their properties rather than waiting for potential interest rate drops.

Pending sales also saw an uptick, totaling 1,240 compared to 1,129 last year, reflecting a 9.8% increase. While closed sales experienced a decline in the first quarter, down by about 1.5% year over year, they have now stabilized, with 1,079 closed sales this April compared to 1,077 last April. The strong performance in April has brought us back to a stable position, indicating the possibility of an overall increase from 2023 in terms of sales rates and pending transactions.

We may anticipate a slightly better year ahead as many individuals are no longer waiting on the sidelines, but instead, are moving forward with their lives, regardless of the Fed's actions.

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

With the influx of new listings, the days on market have increased from 41 days to 50 days. Still, this remains a remarkably low number for our market. Over the last decade, we've typically seen an average of 100 days on the market, so 50 days is still quite low.

The average sales price across the entire North Alabama area has actually risen by 4.4%, from $339,179 to $354,071. This increase now aligns more closely with inflation. We're no longer experiencing the dramatic price hikes seen during the Covid years, driven by deficit spending and inflation. As inflation begins to ease, our sales prices across North Alabama are reflecting a more balanced approach, which is healthier for our market.

For buyers, a key statistic to consider is the percentage of list price received by sellers. This has remained relatively flat year over year, shifting only slightly from 98.3% to 98.2%. Typically, in a balanced market, we aim for a 97% figure, allowing sellers enough room to cover closing costs and negotiate. While there has been an increase in negotiations compared to the Covid years, it's still not as prevalent as in a normal market.

Housing Affordability, Months of Supply, & Housing Inventory

Unfortunately, housing affordability continues to decline or remain low this year. Last year, we were at a score of 100, whereas now we're at a score of 91. This essentially means that the median household income can no longer afford a home within the median price range in our area. A score of 100 represents the average affordability level. Currently, we're below that at 91, and we're significantly lower than the pre-pandemic levels a few years ago when we were reaching scores of 180 and above. Despite the decrease in affordability, we're still more affordable than many comparable markets. Consequently, there are still many buyers interested in our area because we're close to that 100 score level.

Supply has also increased, from 2.4 months to 3.3 months, with the influx of new inventory onto the market. Surprisingly, even with this increase in inventory, we're still not in a buyer's market. We haven't even technically reached a balanced market yet. A balanced market typically falls within the range of 4 to 6 months, whereas we're currently below that at 3.3 months. Technically, we're still in a seller's market, which is why we're seeing a list-to-sales ratio of 98.3%.

Overall, inventory has seen a significant uptick of 37.5%, rising from 2,520 active listings this time last year to 3,332. However, this is still only about half of what we've seen in decades past.

Major Takeaways from April 2024 Housing Stats

One significant highlight is the surge in new listings, marking the highest number seen in the past 12 months. Many individuals are growing tired of waiting for the Fed's decisions on rates and are choosing to move forward with their lives. This translates to a 30.9% increase since April 2023, with a 13.9% year-to-date rise in new listings. However, we've experienced an 8.5% decrease from 2022, indicating we're not yet back to previous levels.

Closed sales have remained flat year over year, with both April and year-to-date figures down by 23.4% from 2022, but this stability is actually a positive sign considering the 1.5% decline after Q1. While sales are trending positively, we're still far from the levels seen in 2022, with the nationwide figure likely to fall below the 4 million mark compared to 2023's 6 million homes sold.

Another noteworthy trend is the increasing days on the market, although we remain significantly below historical pre-COVID ranges in Huntsville. Essentially, homes are selling faster now than they did a decade ago, but the process may feel prolonged for those who sold during the Covid era.

Average sales prices continue to rise, reflecting more normal ranges and mirroring inflation. With a 4.4% year-over-year increase compared to last April, and a 2.5% year-to-date rise, this aligns more closely with healthy market appreciation. Maintaining such appreciation levels is crucial for preserving affordability, although our current score of 91 in April 2024, down from pre-COVID figures exceeding 180, indicates affordability challenges persist.

Inventory-wise, we've returned to pre-COVID levels but remain at about half of what was observed in the 2015-2016 era.

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