It may still be a seller’s market, but things are looking up for buyers these days — particularly in Alabama. The new construction market in the Yellowhammer State actually grew at a faster rate than that of the whole nation this past February, and new unit sales are on the rise in municipalities throughout Alabama, despite the fact that the total number of homes listed for sale are on a general downward trajectory.
In the first month of 2018, new construction sales in Alabama increased by 22%. During the month of February, they increased by another 14%, when 507 newly constructed homes were sold. In comparison to a year prior, that represents a 6% new construction sale increase. It also marks a faster rate of growth than the U.S. as a whole. The U.S. construction market was worth approximately $1,162 billion in 2016, and it looks like it’s going to keep on growing throughout the state and across the nation as a whole.
February 2018 also saw 3,138 new construction units listed for sale throughout Alabama, which represents a 1.9% increase from a month prior and a whopping 20.9% increase from February 2017. The number of building permits issued for construction statewide also mirror this trend, with 1,225 permits being issued during the month of February — an increase of 1.1% from the previous month and a 10.1% increase from February of 2017.
It shouldn’t come as a surprise that there’s a growing demand for new construction, considering that 34% of buyers who purchase new homes want to avoid renovations, electricity issues, or problems with their plumbing. In Alabama, there have been some notable areas of growth, including condos — a market which had essentially stalled 10 years ago.
Thanks to a significant increase in Alabama’s co-ed population — the University of Alabama’s student enrollment rates increased from 33,000 in 2015 to nearly 40,000 in 2017 — the demand for student housing, apartments, and condominiums is also on the rise. There are at least two developments in the works that will provide necessary housing for these students come fall; “My House on the 50” will have 44 units on four floors with two stories of elevated parking, while The Hub at Tuscaloosa will be home to 188 units and will top 75 feet in height. The university itself is building a new dormitory to meet the demand, and there are other high-end housing projects in the works.
Part of the appeal is Alabama’s low cost of living, which makes it more affordable for families to send their kids to an out-of-state school and buy a condo, rather than paying tuition in their home states. In 2017, there were 220 condos sold in just the Tuscaloosa, AL area, a 17.6% increase from the figures in 2016. And in just the first few months of 2018, condo sales made up anywhere from 6.9% to 11.9% of all residential sales in the local market.
It’s not just apartments and condos, either. The Baldwin County Association of Realtors/Multiple Listing Service recently released its figures from February 2018. In Baldwin County alone, residential sales reached 410 units, which is an 8.8% increase from that time last year. Current sales figures echo a positive trend, reaching a 18.6% increase above the five-year February average of sales.
It certainly helps that the supply is up: housing inventory represented a 6.5% increase of units from one year prior. Currently, there’s a pretty even balance between supply and demand. While existing single-family homes in Baldwin County made up 59% of all sales, 19% were attributed to new construction and 22% were condos. The number of days on the market has decreased by 43.5% from a year ago, which is positive news for both buyers and sellers.
Overall, the real estate market in Alabama — both in terms of construction and sales — is looking up compared to that of the whole nation. Homes are being built more frequently and they’re selling more quickly, on average, which can contribute to a thriving local economy and more prevalent homeownership overall.