Real Estate Update: Third Quarter Report Quantifies Impact of Inflation and Interest

The Huntsville Area Association of Realtors (HAAR) has released its report, compiled by faculty of UAH’s College of Business, on the state of Madison County’s residential real estate market for 3Q 2022. 

The statistics reported shed more light on shifts that we’ve been tracking, putting them into context with both the previous quarter and the third quarter of last year. For instance, the inventory of homes in the region have increased 42% since the end of 2Q 2022, and 95% relative to 3Q 2021.

A majority of the homes listed are in the $350K – $500K price range, which neatly coincides with the range with the most sales. Supply and demand seem to be evening out, as, with the population of Madison County growing to more than 400,000 people, demand for housing will continue to support construction work for some time.

With this report, the challenge now appears to be managing the 8.2% rate of inflation alongside mortgage rates over 6%. 

The median price for a home in Madison County for 3Q 2022 was $336K, which, while 14% higher than 3Q 2021, is a slight dip relative to 2Q 2022, illustrating the abrupt check on the rising housing prices. 27% of homes sold in 3Q 2022 sold for below the list price, a percentage that is up from 15% the previous quarter. 

Price isn’t the only aspect of the sellers’ side to have its momentum slowed, as houses spent an average of 12 days on the market, an increase of 4 days on average. Moreover, the total number of houses sold for the third quarter of 2022 was the lowest third quarter amount since 2018. 

This report confirms the trends that we’ve been tracking, while demonstrating the scale of these movements. The sharp rise in interest rates were certainly abrupt, but given how the population of Madison County continues to grow, checking inflation with that shocking slap to the market may well be what made the difference between high inflation and a runaway lurch that would have caused grievous issues down the line. 

The Huntsville Business Journal will continue to keep its readers apprised of market conditions.