Huntsville Area Association of Realtors Releases Q1 Economic Report
The Huntsville Area Association of Realtors (HAAR), in association with the UAH College of Business, has released its Huntsville Area Real Estate Economics Report for the first quarter of 2023.
The most dramatic difference between Q1 2023 and the same quarter the previous year was the 171.5% increase in units on the market.
Additionally, many of these units are newly-constructed houses. The average new construction inventory for 1Q 2023 is 840, a nearly 200% increase from 1Q 2022.
This matches with national trends. According to a report issued by the Chief Economist of the National Association of Home Builders (NAHB), approximately one-third of housing inventory nationwide is newly-constructed, which is far more than the historical average of around 10%.
The Q1 Report shows a noticeable disparity in the price range of homes being sold. While homes in the range of $650,000 and above increased by 16% relative to Q1 2022, sales of houses priced $300,000 and below have decreased by 23% over that same year, likely due to the increased burden of high interest rates and inflation.
While the inventory for houses has increased across the spectrum of price ranges, the largest inventory is in the $350-500,000 price range. The months of supply for all homes in Huntsville/Madison County is at 2.9 months, a 200% increase over Q1 2022.
Though the inventory has increased significantly over the past year, Madison County’s workforce continues to grow, with a 2.3%. A great many people are in need of affordable housing, but have been stymied by high interest rates and inflation. With the average 30-year fixed-rate mortgage rate hovering between six and seven percent, both buyers and sellers have been reluctant to dip their toes into the market. This is indicated by the threefold increase in average days spent on the market, up to 33 days compared to a mere 11 in 1Q 2022.
Inflation has been slowly decreasing, down to 5% in March. However, that is still short of the 2% goal set by the Federal Reserve.
A total of 1436 units sold in 1Q 2023, down from 1886 in 1Q 2022. It is also below both the five-year first-quarter average (1742) and the sales from 4Q 2022 (1701).
The HAAR Economic Report projects an increase of total sales for 2Q 2023, estimating approximately 1900 homes should sell that quarter, with a corresponding decrease of inventory, down to an estimated 1300.
The Huntsville Business Journal will continue to report on these developments in the real estate market. To read the full report, please follow the link here.
