As we approach the end of 2024, Alabama’s housing market is experiencing notable shifts that are reshaping the landscape for both buyers and sellers. According to the September 2024 Alabama Economic and Real Estate Report, released by the Alabama Association of REALTORS® on October 22, the state’s housing market has cooled off over the past couple of months. However, this cooling comes with a silver lining for potential homebuyers—rising listings and a growing supply of homes, which present new opportunities in the months ahead.
A Decline in Home Sales
The housing market in Alabama saw a noticeable drop in home sales during September 2024. The state recorded 5,340 home sales for the month, marking a 10.6% decrease from August and an 8.2% decline from the same time last year. This two-month consecutive decline is reflective of a larger national trend of market cool-downs as the year progresses.
Evan Moore, an economist at Alabama REALTORS®, notes that while this decrease in sales might seem alarming on the surface, it is part of a recurring pattern that has emerged over the last three years. Historically, home sales in Alabama have tended to slow during the final months of the year. Moore stresses that while sales are expected to continue declining through the remainder of 2024, the overall health of Alabama’s housing market remains strong.
“We’ve seen this before,” Moore stated, referring to the typical year-end decline in home sales. “The data suggests that while there is a seasonal dip, the market fundamentals are still solid.”
Prices: Up Year-over-Year, but Cooling Month-to-Month
While home sales have declined, the median home sales price in Alabama has actually increased on a year-over-year basis. In September 2024, the median price for a home in Alabama was $224,812, representing a 3.7% increase from September 2023. However, this figure is a 4.6% decrease from August 2024, which marked a high point for home prices this summer.
This price drop from last month is significant because it’s the first decline in home prices after several months of steady increases. The cooling of prices, combined with other key indicators, suggests that Alabama’s real estate market is beginning to shift in favor of buyers who may have been previously priced out.
Rising Listings and Inventory
One of the most encouraging trends for potential buyers is the rise in the number of homes available on the market. For the eighth consecutive month, active listings in Alabama have increased, reaching a total of 18,819 listings in September 2024. This marks a 3.8% increase from August 2024 and a substantial 38.3% increase from September 2023. The number of active listings is now at its highest level in five years, giving buyers more options to choose from.
Additionally, Alabama’s housing supply has expanded significantly. As of September 2024, there are 4.6 months of inventory available, up from 4.1 months in August and 1.3 months more than what was available a year ago. This growing supply is another indicator that the market may be slowly transitioning toward favoring buyers, especially if the trend continues.
Historically, real estate experts consider a supply of five to six months to be indicative of a balanced market. Alabama appears to be moving toward that range, signaling that the housing market may be shifting away from the seller’s market that has dominated in recent years.
Opportunities for Buyers
With more homes on the market and supply on the rise, opportunities for buyers are increasing. Jeremy Walker, CEO of Alabama REALTORS®, points out that the current trends are a positive development for prospective homebuyers. “We believe the current trends of rising listings and increased inventory will create more opportunities for buyers,” Walker said. “As more homes become available, we may see prices ease in the coming months.”
This could be especially beneficial for first-time homebuyers who have faced challenges in recent years, as fierce competition for a limited number of homes drove prices up. The combination of growing supply, more active listings, and the cooling of prices could create a more accessible market for these buyers.
Looking Ahead
While Alabama’s housing market has cooled in terms of sales and prices, the increase in listings and inventory suggests a shift that could benefit buyers. Experts expect that this trend will continue through the remainder of the year, with home sales likely to decline further as the holiday season approaches. However, with more homes on the market and prices beginning to stabilize, the coming months could offer prime opportunities for buyers looking to make their move.
As Alabama moves toward a more balanced market, those who have been waiting for the right time to buy may find that 2024 offers some of the best opportunities seen in recent years. Whether you're a first-time buyer or someone looking to upgrade, now might be the time to explore the market and take advantage of these favorable conditions.
