A Decade of Growth
The strength of the local economy is reflected in the residential real estate market of Madison County, Alabama. Since 2012 the number of homes sold, and the home median sales price have trended higher in an annual seasonal pattern. The number of homes sold annually has doubled from 4,776 in 2012 to 9,569 in 2021.
The median sales price grew approximately 70% during the same period to an annual level of $287,000.
By comparison, the U.S. inflation has fluctuated from 1.7% in 2012 to a low of 0.7% in 2015 to about 7% in 2021 which suggests that the rise in home prices resulted from increasing demand.
Figure 1 shows the seasonal sales pattern (blue line) of highs during the summer and lows during the winter months. The monthly median sales price (columns) fluctuated month-to-month prior to 2020 but grew more consistently during 2021 and significantly above the inflation rate (red line). The decline in the homes-for-sale inventory coupled with a population growth of over 50,000 since 2012 have been significant contributors to the higher home prices. Strength in home sales and price levels should continue in the near term as Madison County welcomes new employers and residents.
2021 Annual Recap
Prices (median) for residential real estate in Madison County reached new monthly highs nine times during 2021. Rising prices had minimal impact on housing demand based on the homes sold and the average days-on-market falling to single digits. Annual home sales of 9,569 was an all-time high with a record monthly sales level (956) occurring in June.
The grand total of all sales grew to $3.1 billion in 2021, 21% above the $2.5 billion of 2020. Existing home sales totaled $2.1 billion and new construction sales reached $961 million with condos & townhomes jumping 57% to $38 million during 2021. See Figure 2.
The 9,569 properties sold had an average days-on-market (DOM) of 13 days compared to 27 days last year and 90 days in 2016. The median sales price rose 16.3% to $287,000, higher than the 2020 level. There were approximately 9,730 new listings during the year. By the end of 2021, there was only 0.7 months (21 days) of supply. For perspective, convention suggests that a balanced market has a 6-month supply of homes.
Sales volumes increased in three quarters of 2021 relative to 2020.
Inventory of Homes Listed
The number of homes available continued to fall in 2020 hitting a low of 460 in May and climbing to 601 by year-end which was down 21.3% from Dec. 2020. The positive trend in newly constructed homes continued from 2020 to a monthly average of 230.
Average days-on-market for 2021 was 13 days, less than half of the 27 days-on-market in 2020.