The Huntsville Alabama Real Estate Market
Generally we follow up on our monthly real estate market reports with a closer look at particular aspects of our market or make clarifications that we feel especially useful for our customers and clients.
This month is no different because when one reads our brief metro-wide summaries of general market conditions it is easy to fall into the trap of applying this market-wide data to your specific area and price range of interest. Caution should very much be exercised when attempting to apply these market conditions to all locales and this month we have the perfect example of why this is the case.
A Buyer’s or Seller’s Market?
The question is better phrased as: Does the current Huntsville Real Estate Market favor buyers or sellers? In all honesty and sincerity the answer to this question is that our current market favors both depending on your price range.
Today the Huntsville Real Estate Market is in reality two different markets seemingly opposed to one another and heading in opposite directions. One is a sellers market the other a buyers market. A better example of a dichotomy is not likely to be found. Which market are you in?
Huntsville’s Sellers Market
The best way to characterize this Huntsville Sellers Market may be: externally stimulated demand. This year is a very unique year for first time home buyers, because in 2009 they are receiving a bonanza from the federal government in the form of a tax credit of 10% of their purchase price up to $8000. Moreover last week HUD announced that the FHA will now permit their lenders to provide bridge loans, collateralized by the expected tax credit, to be utilized as down payment and closing cost assistance. Thus this unique market window in now open and is very much affecting our local market.
However the window will be short lived and will close as rapidly as it opened on December 31, 2009. In the starter home market below $150k: inventory levels are under 6 months supply, sales are increasing, inventory is shrinking, and all of this accompanied by increasing prices. This past month we had a 6% price increase in this market segment year-over-year. Multiple offer situations in this market segment may become very common place, seriously, I just had one this week and expect them more frequently as the year goes on.
Huntsville’s Buyers Market
On the other side of the coin, luxury homes above the $400k price mark are experiencing a strong buyers market. Thankfully we had a good month in April, selling 16 of these homes in the metro area, pretty much on par with what was sold in April of 2008. This is certainly a welcomed improvement from the 8 such homes sold in March-09, however here is the kicker; the average price-per-square-foot comparisons on these homes between April-08 ($144) and April-09 ($117) show an average year-over-year price decline of -18.8%.
There is little doubt in my mind that some of these buyers are waiting on the sidelines and making the occasional comparable ($117) offer to test these seller’s will to hang on. With current inventory running 28.5 months of supply we are hopeful that April’s results become repetitive, thus continuing to work off our excess inventory in this price range. Until then sellers can expect this buyers market to continue strong over the coming months.