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According to the December 2023 Alabama Economic and Real Estate Report released by the Alabama Association of REALTORS®, home sales in Alabama remain down amid ongoing market challenges, but a number of approaching seasonal and economic changes suggest that sales are primed to pick up in coming months.
“With holiday travel, gift buying, and various celebrations taking place, home sales across the nation traditionally decline during December,” said Senia Johnson, 2024 President of Alabama REALTORS®. “But our economists have noted that the three essential ingredients for rebound – declining mortgage rates, ample supply, and the seasonal Spring weather thaw – await us in the near term.”
According to the AAR report, mortgage rates, which are considered among the most important factors in real estate sales, have decreased by more than a percentage point over the last two months, significantly helping to bolster sales prices and supply.
Economists predict, though, that mortgage rates will remain unchanged when the Federal Reserve Board meets later this month, and early barometers point to home sales in Alabama declining again through January.
Sales prices in Alabama marked major increases in December, with the median sales price rising by 7.5 percent year-over-year to $223,982, and by almost $9,000 month-over-month. Alabama’s average sales price in December increased by $1,520 relative to November.
Housing supply levels remained constant compared to November 2023, at 3.8 months of supply. This figure is double the 1.9 months available one year ago and remains at the highest level of 2023.
December foreclosures decreased 9 percent month-over-month in the state, marking the first decrease in foreclosures in 3 months.
“Mortgage rates are at their lowest levels since May 2023 and the market for home buying is improving because of it,” said Jeremy Walker, CEO of Alabama REALTORS®. “Indicators from our December report suggest positive changes are on the horizon, and potential cuts to the fed funds rate later in 2024 would further help our housing market reverse the trends that occurred in 2023.”
The Alabama Economic and Real Estate Report is published monthly and annually by the Alabama Association of REALTORS®. Click here to view the full monthly and annual reports.
