Just Another Record Month for Alabama Housing, According to UA’s Real Estate Center

TUSCALOOSA, Ala. – It is becoming almost boring to report; another record breaking month for the housing market in Alabama, according to statistics from The University of Alabama’s Real Estate Research and Education Center.

After setting a new sales record in May, existing homes sales in June moved the bar even higher with a reported 5,739 homes sold, up from last month’s record sales of 5,442, the highest number of existing homes sold in a month since August 2003. Year-to-date sales are also well ahead of last year’s record-setting pace by more than 5,000 units, an increase of 24 percent over last year.

Actually, two monthly records were broken in June. June’s average selling price of $139,375 was the highest price recorded by the Center, surpassing the previous high of $133,932 set in August of 2003. Between May and June of this year the average price of an existing home rose 6.4 percent but is only up 2 percent from last year at this time.

The average number of days a home was on the market fell to 132 days in June, down from 141 days reported in May and well below last year at this time, according to statistics from the center. The last time this number was this low was in July1998 when average selling time was 127 days. The record low was set in June of 1995 when days on the market fell to 115.

For the entire state the total number of used homes on the market rose in June to 26,188, an increase of 410 units over May.

“Given the current sales pace this translates into a four and a half month supply of homes,” said Dr. Leonard Zumpano, director of the center. “For the year, there are almost 4,000 fewer homes available for sale compared to the same time last year. Simply put, what the statistics tell us is that the housing market continues to expand as the supply of existing dwellings remains tight, a classic seller’s market.”

At the local level the sale of existing homes increased in 13 of the 20 reporting areas, remained unchanged in one, and fell in six locations. Average selling price rose in 15 of the 20 reporting areas, falling in only five locations. Days on the market increased in half of the reporting areas while 11 associations reported a decline in the number of homes listed.

Zumpano said a similar situation exists nationally. The National Association of Realtors reported existing home sales jumped 2 percent from May and are up a very healthy 17.4 percent year to date. Home prices also rose, increasing by more than 5 percent in June to $191,800. Year-to-date existing home prices are up 9.6 percent.

Zumpano said the housing sector, both nationally and in Alabama, should remain strong and on track to set another annual record.

“The housing market has been helped by the extremely attractive mortgage interest rates that have prevailed through the first half of 2004,” Zumpano said.

“The housing sector’s health will be more dependent upon what happens to employment and job growth than credit conditions. Of some concern is the fact that economic growth slowed during the second quarter, and the job growth in June came in far below the forecasts of many economists. A slowing job market and rising energy prices could take the some of wind out of the housing market, but a near term shake-out is simply not on the horizon,” he said.

The Alabama Real Estate Research and Education Center is part of The University of Alabama’s Culverhouse College of Commerce and Business Administration. The UA business school, founded in 1919, has been recognized repeatedly for offering a high-quality, cost-effective education.