Dip in housing sales suggest relief for buyers, renters

Back in May, for the first time in five years, residential sales in Huntsville dipped. According to the University of Alabama’s Culver College of Business, sales of residential units slowed by 4.4% compared to the first quarter of 2021. 

While housing sales – and prices – have been soaring nationwide, Huntsville has been in a particularly awkward situation. With the aerospace industry booming and additional Federal spending such as the new FBI facility, Huntsville has been growing in population, outpacing Birmingham to become the largest city in Alabama. However, the Covid-19 pandemic caused significant delays in construction projects across Madison County. 

This combination of a booming population and delayed construction resulted in a sort of “perfect storm” of rising demand and restricted supply of housing. While this has been a boon for those looking to sell their homes, it has put considerable pressure on those looking to buy or rent a home in Huntsville. This pressure has been exacerbated by a combination of stagnant wages and inflation, reducing buying power even as the price of housing escalated. 

While Covid-19 remains a persistent concern, the amelioration of pandemic-related construction delays has resulted in the introduction of more units to the housing market, adding to the supply. The Huntsville Area Association of Realtors reports that there were 879 homes on the market for Huntsville-Madison County, up from a mere 460 in May the previous year. 

This tracks with a national trend towards a slightly cooler housing market. The National Association of Realtors reports that housing sales dropped by 3.4% nationally. 

“Home sales have essentially returned to the levels seen in 2019 – prior to the pandemic – after two years of gangbuster performance,” said NAR Chief Economist Lawrence Yun. “Also, the market movements of single-family and condominium sales are nearly equal, possibly implying that the preference towards suburban living over city life that had been present over the past two years is fading with a return to pre-pandemic conditions.” 

It may take more time for these trends to result in lower actual real estate prices, but at the very least, it’s an indicator that the high price of housing in Huntsville will not escalate to the level of an actual crisis.