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Alabama home sales fall as national rate hits 13-year low

According to a new report from the Alabama Association of Realtors, home sales decreased in October by more than 62% compared to the same time last year, a dropoff mirroring national trends that saw home sales hit a 13-year low.

A total of 5,596 home sales in Alabama were reported in October, a decrease of 3,488 sales when compared to October of 2022. The total sale volume for October was $1.3 billion, a nearly $1 billion decrease from October of 2022 for a decrease of nearly 41%.

The amount of homes listed for sale in October was 14,578, an increase of 16.5% when compared to October of 2022, while foreclosures saw an 11.2% increase during the same time period.

Alabama’s drop in home sales closely mirrored national rates, though not as drastically.

For the month of October, the National Association of Realtors reported 3.79 million home sales, the lowest such figure since August 2010. Short of a jump in home sales in November and December, 2023 is on track to see the lowest number of home sales nationally in more than 30 years.

Like the rest of the country, home prices in Alabama have skyrocketed in recent years, increasing by more than 53% between 2017 and 2022. Wages, however, have not kept pace, with the median household income in Alabama growing by just under 18% during that same time period, from nearly $51,000 to close to $60,000, a trend that closely mirrors national rates.

Coupled with mortgage rates reaching their highest levels since 2000, Alabama has not been immune to the effects of the national housing crisis.

Alabama Association of Realtors CEO pointed to recent signals from the Federal Reserve as a reason to be optimistic about the future.

“Declining interest rates signal promise for Alabama’s real estate market,” Walker said in a statement. “The decrease in rates presents new avenues for growth and investments in our state. Alabama’s economy remains strong statewide, unemployment is down, labor participation is up, we have an increased number of residential listings, and falling mortgage rates. All of which may lead to increased sales activity despite seasonal trends in the winter months.”

In its October report released Tuesday, the AAR projects that home sales will continue to decrease between October and November by an additional 3.5%, whereas the sales volume will remain unchanged during that same time period. The number of home listings, AAR projects, inversely will increase between October and November by approximately 4.7%.

Housing affordability and availability was a major topic of discussion during a recent meeting of the House Labor Shortage Commission, an appointed body tasked with exploiting solutions to Alabama’s low labor participation rate, which for the month of October was reported to be 57%, among the lowest in the country.

Housing, along with transportation and childcare, were the three-most common barriers to employment cited among those polled in a recent study conducted by the Alabama Workforce Council. 

As argued by Dev Wakeley with Alabama Arise, a low-income advocacy group, one proposed solution to expanding housing availability in Alabama would be to fund the state’s Housing Trust Fund, a trust fund created in 2012 that was designed to support construction, renovation and maintenance of affordable housing.

While the HTF has received some funding, largely from the federal government such as a $3.5 million allocation in 2023, and $3 million in 2016, the Alabama Legislature did not allocate any money to the fund in its 2024 budget.

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