Huntsville Housing Market Report | Q1 2023
The Q1 2023 Madison County, Alabama real estate stats are now live as some of these stats are shocking in terms of percentages, but we're going to dive deep into the details to show you what's going on behind the scenes. We’ll look at the stats on housing supply in Huntsville, Alabama, break down the average days on market, and explore the challenges of housing affordability, where income growth struggles to keep pace with inflation. If you’re looking to buy or sell a home in Huntsville, this report could provide you with key information to help you make the best decision based on your situation.
The first stat that jumps off the page from this Q1 2023 Madison County Real Estate report is the number of available homes rose 171.5%. That large of an increase would make you think the sky is falling for real estate in terms of real estate values plummeting but in reality, we are still in a seller's market. We are still below four months' worth of supply level, we are at 2.9 months' worth of supply which designates a seller's market. In my opinion, we've really transitioned from a savagely unhealthy real estate market to now an unhealthy real estate market.
This time last year, in Q1 of 2022, we were at .9 months of supply versus 2.9 months' worth of supply. However, we're still below what would be considered a balanced market, which is 4 to 6 months. A buyer's market is anything above six months so still ways to go and very unlikely that we hit a buyer's market this go round.
Another stat the economists are trying to highlight in this report is the percentage of sales increase in the $650k to $800k price range, which was 31.9%. Like a lot of these percentages and stats, if you dive into the details, they're a little misleading because there was really only a 15 net sell gain over that Q1 period, which is really only about five homes per month. We increased from 47 homes in 2022 to 62 homes in 2023, which is only 1% of the total market so that’s not really a big headline. And with inflation, you would expect that prices in those price bands are really going to continue to increase.
Looking at the graph in the above video at 00:56, the historic number of homes available in the marketplace is still well above where we are currently so we’re still not close to where we need to be. The biggest challenge is this increased level of supply is really not anything that's normal within the marketplace, it's just market manipulation by the Fed. The Fed has simply priced out a lot of buyers that would like to purchase homes by increasing inflation (raising the price of homes) and then increasing home interest rates so a lot of homes are now just unaffordable to some of these younger millennial buyers. This has pushed homeownership rates down to 50-year lows.
Average Days on Market
Another stat that jumps off a page is the average days on market, that's jumped 300% year over year. However, if you look at the stats, the number of average days on market was just extremely low last year at only 11 days, which is really unprecedented. Now we're at 33 days, which is still below historic norms. I was reading just yesterday that nationally 60% of homes are still selling within the first 30 days, which is still an extreme seller's market.
The last stat to highlight is the workforce. The average income level in our area is growing, which is a great sign. However, the biggest challenge is that the income has not been able to keep up with the pace of inflation.
If you look at the chart for housing affordability index for our area, you'll notice that just a few years ago we were at about a 200 level and now we're south of that 100 level, meaning the average income, even with these big gains, can still not afford the average price home in our area. This is a huge challenge going forward.
Fortunately, we have many more jobs and higher-paying jobs coming to the area. Still, we definitely have to address affordability if we want to continue to maintain our current lifestyles here in the Huntsville area.
If you want to know how these stats affect the sale of your home or if you're looking to purchase and start to build wealth in the Huntsville area, email us at firstname.lastname@example.org or contact us here.
Posted by Matt Curtis on