Local real estate market showing positive trend | News … – Theredstonerocket

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There are some positive developments in the real estate market for potential home buyers, as inventory in Madison County continues to climb and return to pre-pandemic levels, a recent report shows.  

“We had a 20% increase in home inventory, but the largest rise was in the $250,000 to $300,000 (price) range, which is just incredible,” Kurtis Krueger, CEO of the Huntsville Area Association of Realtors, said. “I had not seen that happening in other places. We all know Huntsville is special.” 

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Krueger was referring to the findings in the 2023 Q3 Real Estate Economics Report, released in partnership with the University of Alabama in Huntsville College of Business. It reflects key indicators in the local housing market. 

The inventory of homes increased to 1,807 in the third quarter, compared to 1,496 in the third quarter of 2022, according to the report. And more recent data from shows that in October, there were 1,882 homes on the market in Huntsville/Madison County, compared to 1,643 in October 2022. 

Krueger, who has led the Huntsville Area Association of Realtors and since Aug. 1, noted that the third-quarter report showed that the number of listed homes rose to the highest level since 2017. 

Other findings of the third quarter report: home sales decreased in all price bands in the third quarter – at 1,858 – compared to 2,331 in the same quarter in 2022. It was the lowest third-quarter level since 2016. 

According to the Huntsville association’s data, total home sales in Madison County were 9,569 in 2021 and 8,144 last year. As of Nov. 20, 5,914 homes had been sold, putting the county on pace to reach about 6,600 in sales this year, according to Sean Magers, the association’s director of communications and government affairs. 

The median sales price slightly decreased to $331,705 in the third quarter from $336,000 in the third quarter of 2022, according to the report. 

National Association of Realtors Chief Economist Lawrence Yun shared his 2024 outlook this month during a forum at 2023 NAR NXT, The Realtor Experience, noting that the 30-year mortgage and Fed funds rates have likely peaked. He forecasts that interest rates will drop to between 6 to 7% by the spring buying season and anticipates that more sellers will enter the market. 

“There’s a lot of pent-up energy in the market right now and we’ve a whole generation of people that think that (mortgage rates at) 3 and 4% is normal, and it is absolutely abnormal,” Krueger said.  

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances – $726,200 or less – decreased to 7.41% from 7.61%, according to data from the Mortgage Bankers Association’s Weekly Mortgage Applications Survey for the week ending Nov. 17. The average contract interest rate for 30-year fixed-rate mortgages backed by the Federal Housing Administration decreased to 7.19% from 7.36%.  

And the average contract interest rate for 15-year fixed-rate mortgages decreased to 6.89% from 6.94%.  

“Yun’s predictions make me very happy,” Krueger said, adding that the lower mortgage rates Yun is expecting would “drive another market frenzy. Everybody would come off the sidelines and participate.” 

Another finding in the third-quarter report was the average days on market in Madison County fell to 26, compared to 32 days in the second quarter, but double that of the third quarter of 2022. 

Magers said that an increase in days on market may initially seem like “a bad sign,” signaling that houses aren’t selling as quickly, but the increase gives sellers time to consider multiple offers and provides buyers a chance to look around before houses disappear from the market. 

“In 2021 in Madison County, homes were selling anywhere from six to eight days on average,” he said. 

Krueger praised efforts by the city of Huntsville and the private sector to work together to address housing. 

“We’re fortunate here with that type of collaboration because home ownership is an issue everywhere and it’s one that’s taken seriously here,” he said. 

Krueger noted the Mill Creek project, the redevelopment of Butler Terrace and Johnson Towers public housing to create up to 750 residential units – a mix of market rate, Housing Authority, workforce and senior housing. 

A Choice Neighborhoods Implementation grant will be sought that could provide up to $50 million in federal funding for the project. 

“All of us are very excited about (the Mill Creek project) and what that may lead to,” he said. “That’s real community when you have that kind of planning and support from the city to do work of that kind.” 

A few other indicators in the third-quarter report:  

The Madison County population grew to 406,026 in July.  

The county’s workforce reached 205,157 in August. 

Median household income rose to $81,968 in the third quarter. 

Inflation is less than half – at 3.7% — of its September 2022 level of 8.2%.

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