Alabama Housing Market Coming Off Strong Month of May

Alabama Housing Market Coming Off Strong Month of May

For those who have long called the great state of Alabama home, this news might seem typical, but in an economy still trying to find solid ground the 2008 recession it’s certainly good news. According to a new report from Alabamanewscenter.com, Alabama home sales increased by 11.4% in May from last year’s total. In addition to the actual increase, the improvement was better than industry experts expected.

The Alabama Center for Real Estate (ACRE) had previously set the month of May’s sales forecast at 19,485 closed transactions. The actual sales ended up being 21,140 units, 526 (11%) more than the projected numbers.

Alabama, like most parts of the country, took a serious hit after 2008 in the real estate market. Statewide sale totals in the month of May 2009 dropped to 3,318. Fortunately, they have steadily climbed their way back since then. It must be that at least some of the approximately 45 million people that move each year are choosing to put their roots into Alabama’s rich soil.

“Continued home price appreciation has been squeezing housing affordability, driving a two-year downward trend in the share of consumers who think it’s a good time to buy a home,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The current low mortgage rate environment has helped ease this pressure, and fewer than half of consumers expect rates to go up in the next year.”

As the report points out, most of the moves into Alabama are primarily focused in the metro markets. In fact, they make up about 70% of total sales in the state. The increase in demand did have a predictable effect on the supply as well. May residential average sale prices increased by about 1.4% from their April numbers and by about 3.2% from their May 2015 levels.

While the news is good for now, Duncan was quick to add that recent economic rumblings could play a role in drawing the industry back.

“While the May increase in income growth perceptions could provide further support to prospective home buyers as the spring/summer home-buying season gains momentum, the effect may be muted by May’s discouraging jobs report.”