December real estate report shows seasonal decrease in sales, increase in active listings

MONTGOMERY–The Alabama Association of Realtors has released its December Alabama Economic and Real Estate Report. The monthly analysis of the state’s housing market showed a slight decrease in both home sales and median sales.

According to the newly published data, Alabama recorded 4,876 home sales in December, representing a 5.7% decrease from November and a 2.2% drop from the same period in 2023. Additionally, average 30-year mortgage rates declined by 21 basis points to 6.60% through the first two weeks of December, however, the average rates then began a steady increase through the rest of the month and reached 7.04% by January 16.

The data also showed that the sold volume in Alabama, was $1.16 billion in December, a .09% increase from one year ago, but a 6.5% decrease month-over-month, which reflects seasonal trends. The 430 home foreclosures in December marked an 11.7% decrease from 2023 but represented a 3.4% increase from November.

David Hughes, an Economist at Alabama REALTORS, acknowledged the dip in home sales and median prices but noted that now is a perfect time to purchase a home.

“Mortgage rates have climbed quickly over the last five weeks, which likely doesn’t bode well for sales, and rates are very likely to remain above 6% as the Fed continues its quantitative tightening campaign,” said Hughes.

“If history is any guide, then the first quarter of the year is usually slow for sales, but less competition among buyers, slightly lower prices, and normalizing mortgage rates provide many great reasons for buyers to make a move.”

In good news for potential buyers, the median sales price across Alabama fell slightly to $220,194, a 0.4% decrease compared to November and a 1.7% year-to-year drop, which ends six straight months of annual increases.  At the same time, the state’s 18,468 active listings at the end of December were 25.4% higher than the 14,723 of one year ago. Higher inventory is expected to allow buyers more choice and the ability to more easily find a “dream home” that fits their specific wants and needs.