People buying, selling, and building homes are critical to the foundation of our community. After a decade of recovery and real estate growth following the Great Recession, the economic slowdown has raised concerns about real estate market impacts and homeownership. One of the cornerstones of the American dream is owning a home.
The national real estate outlook
Experts at the highest level recognize real estate’s role in our economic recovery. A critical difference between the 2008 recession and the situation today is the overlying factors. Ben Carson, the secretary of the U.S. Department of Housing and Urban Development, pointed out this recession is artificially created on the back of a strong economy. The underlying fundamentals of our national economic engine remain solid.
The housing market was strong in Q1 2020 thanks to historically low interest rates and high demand for homeownership. At this time, interest rates will likely remain low for the foreseeable future as a way of spurring the economy and encouraging homeownership.
Another positive sign is the five-week steady increase in mortgage applications, as of the week ending May 15, according to Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting.
Realtor.com expects national home sales will rebound during summer and fall 2020 as fears subside and consumer confidence grows again. It predicts an increase in transactions during the third quarter. Their Chief Economist Danielle Hale predicts home sales for the year will resemble a “W” shape with rebounding in July, August, and September before dipping again in the final months of the year due to a possible second wave of the virus combined with lingering effects of the high unemployment rate.
Overall, the recent revised housing forecast for 2020 shows home price growth will flatline. Inventory will stay low, but a greater number of lower-priced homes will become available.
Huntsville real estate outlook
What we have seen in the Huntsville area is consumer confidence and continued interest in homeownership. As expected, the economic slowdown and its overarching factors impacted sales activity, but there is still movement in the marketplace.
Look at some statistics reported by the Huntsville Area Association of Realtors from the Valley MLS for Huntsville-Madison. As of April 2020, 1,186 homes were on the market, with an average 33 days on the market. The average sale price increased to $279,833 in April 2020 from $246,640 the prior year.
For April 2020, ValleyMLS data shows median sales prices increased 15.9 percent. Days on market declined 16.1 percent. For the week ending May 9, single-family home pending sales rose 10.1 percent year-over-year.
Our inventory and available new listings did decrease. As of May 9, inventory was down 20.2 percent. We are at a 2.1-months’ supply of inventory.
Looking at the big picture, we see buyer interest in Huntsville real estate remains present. Sustained demand, low interest rates, and low inventory will drive the area’s real estate market.
Homeownership and confidence
A primary driver in the housing market is consumer confidence in buying and selling homes. Even if confidence declines in the short-term, the desire to own your home isn’t going anywhere. Moving forward depends on increasing consumer confidence, pandemic mitigation at the federal and state level, and getting people back to work.
As those things happen, the American dream of homeownership will continue. Amanda Howard Sotheby’s International Realty will be here to support our buyers and sellers in any way possible.