Alabama Housing Market: February 2025 Analysis

The Alabama housing market in February 2025 presents a complex landscape characterized by rising prices and declining sales activity. The Median Sales Price for homes in Alabama reached $283,100, marking a 2.3% increase year-over-year (YoY). This upward trend in sales prices is mirrored by the Median List Price, which rose by 4.8% YoY to $314,200. The increase in prices is further reflected in the median Price Per Square Foot, which climbed 3.6% YoY to $153, while the Median List Price per square foot saw a more substantial rise of 7.4% YoY to $169.
Despite the increase in prices, the number of Homes Sold in Alabama has decreased significantly. A total of 3,881 homes were sold in February 2025, representing a 9.3% decline YoY. Similarly, Pending Sales have dropped by 7.5% YoY, with 5,515 transactions currently in the pipeline. New Listings have also seen a reduction, down 5.6% YoY to 5,867, indicating a potential tightening in market supply.
Interestingly, the Inventory of Homes Available for sale has increased by 7.2% YoY, reaching 17,703 units. This rise in inventory, coupled with the decline in sales, has resulted in a significant increase in the Months of Supply, which now stands at 4.6 months, a 70% increase YoY. This suggests that the market is shifting towards a more balanced state, with more options available for buyers.
The Median Days on Market for homes in Alabama has increased by 8% YoY, now averaging 72 days. This indicates that homes are taking longer to sell, which may be a reflection of the higher prices and reduced buyer activity. The average sale to list ratio has seen a slight decrease of 0.1% YoY, now at 97.3%, suggesting that sellers are receiving slightly less than their asking prices on average.
Additionally, the percentage of Homes Sold above list price has decreased by 1.6% YoY to 15.8%, while the proportion of Price Drops has increased by 2.5% YoY to 23.8%. This indicates that sellers may be adjusting their expectations in response to the changing market conditions. The percentage of homes going off the market within two weeks has also declined by 8.5% YoY, now at 25.1%, further highlighting the slower pace of sales.
Overall, the Alabama housing market in February 2025 is characterized by rising prices and a slowdown in sales activity. While inventory levels have increased, providing more options for buyers, the extended time on market and adjustments in pricing strategies suggest a market in transition. Buyers and sellers alike will need to navigate these evolving conditions carefully as they make their real estate decisions.
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