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The Real Estate Market’s New Normal

Categories: Uncategorized | Posted: August 25, 2021

Before the pandemic started, roughly two years ago, only a quarter of homes for sale were selling above the asking price. Today, in the midst of the pandemic, demand for homes is soaring above the supply amount, causing the prices to hit a record high. Roughly half of all homes for sale during the pandemic in America have sold above the asking price.

 

So, why is this happening and what turn can we expect the housing market to take in the near future? Let’s discuss.

Huntsville Housing Market Comparison

Reported in July of 2021, Huntsville’s home prices are up 16.8% compared to 2020. The average median price for homes in Huntsville is $292,000 and they remain on the market for an average of 28 days, versus 42 days in 2020. The inventory is also down by 9.17% with only 495 homes sold versus 545 homes last year.

 

Huntsville, Alabama is growing so fast and we are seeing more and more people and businesses flock to the area. That brings its own set of challenges as consumers are having to compete with out of town investors.

Competing with Investors in Huntsville

The housing inventory in Huntsville today is the lowest it has been in the past 20 years. The demand in the Huntsville metropolitan area has made it tough for developers to keep up. This has caused the rental prices to increase as well, by about 9%. Outside investors are drawn to Huntsville because of the increasing population and profit opportunities. They want to be able to purchase a home (usually without even seeing it in person), and list it for rent in order to make more money. This can be tough for first and second time buyers to compete with, because these outside investors are generally offering all-cash offers.

Historic Price Changes

Let’s break down the price changes in Huntsville a little more.

  • Within the last 5 years, the price for a home as increased by 55.3%
  • Within the last year, the price for a home has increased by 20.9%
  • Within the last few months, the price for a home has increased by 2.1%

 

So while we are still seeing spikes in the housing market, they are beginning to slow down. However, we do anticipate for the prices to continue to go up, and not down anytime soon. This is due to not only the low amount of inventory, but also the constant increase in demand. The population in Huntsville and surrounding areas like Madison, Athens and Decatur, is continuing to rise. Which means the demand for housing is not slowing down anytime soon. As long as Huntsville continues to grow, if developers cannot catch up, then we can expect housing prices to continue to grow as well.

 

Buying New Construction

A smart investment that buyers may consider is purchasing a new construction home, or one that is in the construction phase. While some people might not have the time to wait for their home to be built, it is a smart decision to consider in order to not have to compete with other buyers in this crazy and ever changing market. Hiring a new home builder that understands your wants and needs and can help walk you through the process and make sure you’re getting more bang for your buck. Instead of competing with multiple offers and buyers, and settling for a house because you’re tired of looking, have what you really want with a new home builder like Legacy Homes.

 

Legacy Homes is your new home builder located in Huntsville, Alabama, with communities in surrounding areas. View our floor plans, take a virtual tour and more here.

Kelly Ruh

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