Birmingham-area home sales decline 14% year-over-year in June

Sales: According to the Greater Alabama MLS, June home sales in the Birmingham area decreased 14.1% year-over-year (Y/Y) from 1,980 to 1,691 closed transactions. Going against seasonal trends, sales decreased 2.8% from May. Sales are down 7.1% year-to-date. Two more resources to review: Quarterly Report and Annual Report.

For all Birmingham-area housing data, click here.

Inventory: June listings (3,497) increased 15.1% from May and 12.4% from one year ago. At the current sales pace, all the active inventory on the market would sell in 2.1 months, up from 1.7 months in May and 1.6 months in June 2021. The equilibrium point where buyers and sellers have roughly equal bargaining power is 4-5 months of supply.

Pricing: The median sales price in June was $315,000, a record high and an increase of 14.6% from one year ago and 2% from May. The differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.

Homes sold in June averaged 14 days on the market, selling three days more slowly than in June 2021.

Forecast: June sales were 65 units, or 3.7%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 1,756 sales for the month, while actual sales were 1,691 units. ACRE forecast a total of 8,882 sales year-to-date, while there were 8,927 actual sales through June, a difference of 0.5%.

New construction: The 188 new homes sold represent 11.1% of all residential sales in the Birmingham area in June. Total sales decreased 5.5% year-over-year. The median sales price in June was $399,880, a decrease of 0.4% from May and an increase of 29.9% from one year ago.

Statewide summary: Home sales in the state declined in June as rising mortgage rates pushed more buyers from the market. Sales declined 13.1% year-over-year and are down 3.2% year-to-date. However, housing demand remains above pre-COVID levels, with June sales 6.6% above the five-year average. Additional declines are likely in the months ahead, with a 5-10% slowdown expected from last year’s pace.

Home sales price growth moderated in June with the statewide median sales price rising 11.7% Y/Y, down from 17.5% in May and 16.2% in March. The statewide median sales price declined slightly (0.3%) from the record high reached in May. Going forward, slowing sales and rising inventory are likely to result in home price growth moderating to the 8-10% range.

Much-needed inventory arrived in June, with statewide listings rising 15.4% from May and 29% from one year ago. Inventory is still relatively tight as the 12,843 properties listed for sale is 35.5% below the five-year average of 19,915. Unsold inventory was at 1.8 months of supply, up from 1.2 one year ago.

National summary: According to the National Association of Realtors (NAR), existing home sales declined for the fifth consecutive month in June, falling 5.4% from May (seasonally adjusted annual rate). Three of four regions of the country reported month-over-month declines, while sales were down year-over-year in all regions, falling 14.2% from June 2021.

The median sales price for all housing types increased 13.4% Y/Y to a record high of $416,000, the 124th consecutive Y/Y gain. Properties sold in an average of just 14 days, the fastest pace on record. Inventory is slowly trending upward from the lows seen during the post-pandemic housing boom. The 1,260,000 listings at the end of June increased 9.6% from May and 2.4% from one year ago. June’s 3 months of supply increased from 2.6 during May and 2.5 one year ago.

Lawrence Yun, chief economist for NAR, said, “falling housing affordability continues to take a toll on potential home buyers. Both mortgage rates and home prices have risen too sharply in a short span of time.”

Yun also commented on rising inventory, saying, “Finally, there are more homes on the market. Interestingly, though, the record-low pace of days on market implies a fuzzier picture on home prices. Homes priced right are selling very quickly, but homes priced too high are deterring prospective buyers.”

All-cash sales represented 25% of all closed sales in June, the same as the prior month and up from 23% one year ago. Second-home buyers and individual investors purchased 16% of June home sales, unchanged from May and up slightly from 14% one year ago.

Foreclosures and short sales accounted for less than 1% of June transactions, unchanged from May 2022 and June 2021.

Click here to view the entire monthly report.

The Birmingham Metro Area Residential Monthly Report is developed in connection with the Birmingham Association of Realtors.