Alabama Housing Market Bucks National Trend
After posting sharp declines in July, the Alabama housing market was back on track in August, according to recent figures from the Alabama Real Estate Research and Education Center at the University of Alabama.
The Tuscaloosa News reports that even as more residents struggle with mortgage payments, mortgage loan demand appears to be returning to the Heart of Dixie. Statewide, existing home sales were up 8.2 percent from the previous month, to 5,790. However, they remain down slightly since June.
“In order to keep these numbers in perspective, it should be noted that existing home sales set an all time record in June when 6,032 units were sold. So far this year 40,979 homes have been sold compared to 40,307 through the first eight months of 2005,” said Leonard Zumpano, Director of the UA center.
It’s interesting to note the disparity between a place like Alabama and the Colorado housing market, which has grown so fast in the previous five years that people are now worried about a market correction — and possible recession. Here, growth has been moderate and steady.
Some interesting facts contained in the study:
- In Tuscaloosa County, 238 existing homes were sold in August, compared to 209 in July and 188 in August 2005.
- Year-to-date, 1,573 homes were sold in the county, compared to 1,409 during the same eight-month period last year.
- Existing home prices in Alabama also rose slightly in Au-ust after dropping in July. Last month was the first time this year home prices fell.
- The average selling price rose to $161,132 in August, up a little more than $3,500 compared to August of last year.
- Year-to-date home prices are up $9,600.
- The average selling price in Tuscaloosa County was $177,459 in August, up from $160,215 in July. In August a year ago, the figure was $148,503.
While Alabama mortgage demand appears healthy, the market does not look as positive at the national level. Existing sales continued falling in August, the fifth consecutive month, dropping by 0.5 percent to an annual rate of 6.3 million sold.
National existing home sales are down by 12.6 percent compared to August of last year. With mortgage costs rising steadily, the median price for previously owned homes also fell in August to $225,000, the first price decline in 11 years. In August of last year, the median price was $229,000.
Housing starts, an indicator of future housing market activity, dropped by 6 percent in August, a much larger drop than analysts had expected, said Zumpano. The number of housing starts for August, 1.665 million, is the lowest number since April 2003.
“At the center, we expect further sales and price erosion through the end of the year, but we think most of the downward adjustments will occur in those markets that had previously experienced very high rates of price appreciation during the previous five years,” Zumpano said.
“The market in Alabama, where the increase in home prices has been moderate but steady, will probably remain relatively stable, buttressed somewhat by the recent decline in mortgage rates, a robust state economy and strong job market.”