ALABAMA - The latest real estate data shows that home sales in the Birmingham metro area decreased by four percent in October. This trend is in line with statewide trends. Although the Birmingham housing market continues to be strong, inventory remains low. This has kept prices high and helped the Birmingham housing market approach national and state averages. However, the pace of growth is expected to slow in the coming years as rising mortgage rates dampen consumer demand.
While the Alabama real estate market is recovering, it is important to remember that Birmingham is still ahead of other traditional hot spots. The city enjoys low mortgage rates, strong job growth, and affordable housing. Homes in Birmingham are currently on the market for an average of 15 days before being bought. The Birmingham real estate market continues to be a popular destination for investors and home buyers alike.
Home Sales In The Birmingham Area Increased 42.4% From February
The Birmingham housing market grew in March, thanks to tight inventory and increased demand. The median sales price for all housing types reached $377,300 in March, up 15% from the same month a year earlier. This marks 121 consecutive months of year-over-year gains for the market. This growth is expected to slow in the next few months but is still above the national average. Rising mortgage rates are expected to curb consumer demand, however.
The Birmingham housing market is a prime place for rental property investors, and prices have risen yearly. In addition, home prices have been trending upward compared to the rest of the country. While there are many homes under $100,000, most homes in Birmingham are priced in the eight-to-ten thousand range. This low-priced range makes Birmingham a great place to purchase a rental property for short-term and long-term investing.
Home Price Growth In The Birmingham Area Will Slow To 7 To 9 Percent Year On Year
The Birmingham housing market has experienced an upward trend in recent years as home prices have increased with a tight inventory. This has pushed prices to levels closer to state and national averages. However, the pace of home price growth in the Birmingham area is expected to slow to seven to nine percent year on year in 2022. Rising mortgage rates are a likely reason for this.
According to the Greater Alabama Multiple Listing Service (MLS), home sales slowed in July. The number of homes sold in July was 153 less than forecast in June, but it rose significantly from two years ago. The median sale price was $389,542 in July, which was 2.6% below June's level, but 16.9% higher than a year ago.
The Decline In Office Properties
Office properties are the most expensive real estate in Alabama, and a steady decline is projected for the state through 2023. The state's COVID, or cost-based value index, is expected to decrease by approximately 2/3 by 2023. Meanwhile, the decline in actual AV is projected to continue exerting downward pressure on property tax revenues for the next two years.
The study considers data on employment, earnings, city fiscal structures, and potential declines in commercial property values. With these data, it is possible to understand whether Alabama's economic climate is resilient enough to withstand a significant decline in office property values by 2023.
Impact Of Covid-19 On Alabama's Real Estate Market
Several factors have contributed to the current real estate market in Alabama. As of June 2020, new home sales were at an all-time high, while total residential sales were up from last year. Sales prices are also rising faster than before the pandemic. Meanwhile, total residential listings have remained in a downward trend. This decline has helped fuel faster sales. In addition, the lack of vacant housing inventory has also boosted the market.
The impact of the pandemic was felt mostly on total residential sales, which declined in April and May. In affluent areas, many residential buyers fled to larger homes with more yards, while the housing supply remained low in lower-income areas. In these neighborhoods, multi-family rentals helped to fill the gap. Overall sales in Alabama are up 8.6% year-to-date.