AL ABAMA

Economic
& Real Estate
Report
M O N T H LY R E P O R T • F E B 2 0 2 3 A L A B A M A R E A LT O R S . C O M
ALABAMA ECONOMIC & REAL ESTATE REPORT

ALABAMA MONTHLY HOME SALES REPORT

FEBRUARY 2023

KEY TAKEAWAYS
• Alabama had 6,974 home sales in February. This is a decrease of 1,998 sales compared to February of last year.

• The median sales price decreased by $12,017 compared to a year ago, to $206,253. This is a decrease of 5.5%.

• The sold volume was $1.6 billion in February, a decrease of $0.9 billion from last February.
This is a 33.3% decrease.

• The 11,104 active listings at the end of February marks an increase of 68.7% compared to the 6,584 of one year ago.

• The 389 foreclosures recorded in February mark the third consecutive month of decline, despite representing a 34.1%
increase over the previous year.

ALABAMA HOUSING MARKET SUMMARY, FEBRUARY 2023

Feb-22 Feb-23 Change % Change YTD ‘22 YTD ‘23 Change % Change

Sales 8,972 6,974 -1,998 -22.3% 18,461 14,404 -4,057 -22.0%

Median Sales
218,270 206,253 -12,017 -5.5% 217,262 209,480 -7,782 -3.6%
Price ($)

Average Sales
275,805 236,559 -39,246 -14.2% 274,812 238,263 -36,549 -13.3%
Price ($)

Sales Volume
2.5 1.6 -0.9 -33.3% 5.1 3.4 -1.6 -32.3%
($ billions)

Average Days on
45 67 22 48.9% 55 73 18 32.7%
Market

Active Listings 6,584 11,104 4,520 68.7% 6,803 11,430 4,627 68.0%

Months of Supply 1.4 2.3 0.9 61.1% 1.4 2.2 0.8 61.6%

Foreclosures 290 389 99 34.1% 572 817 245 42.8%

FEBRUARY 2023 REPORT 1

ALABAMA ECONOMIC & REAL ESTATE REPORT

ECONOMIC OVERVIEW
Inflation remains a concern, with the Consumer Price Index (CPI) for all items rising 6.0% year-over-year in February. Food prices
increased by 9.5% and energy prices by 5.2%. Additionally, the CPI for the South was even higher at 6.4% year-over-year. The CPI
was lower relative to the previous month. However, average 30-year mortgage rates increased throughout the month of February, from
6.09% to 6.50%.

State unemployment continued to remain low and below the national average. The national unemployment rate remained at 3.4%.
Furthermore, the nation added 311,000 jobs in February.

Considering high inflation and strong job growth, a recent Reuters poll revealed a sizeable majority of economists expect a 0.25%
increase in the fed funds rate target during the next Federal Reserve meeting in March.

JOBS
Alabama added 2,700 jobs in January, bringing the total number of jobs in the state to 2,138,700. Job growth remains positive but
decelerated relative to the 5,400 added in December 2022 and 5,600 added in November 2022.

Alabama Labor Force Participation (Thousands)

Professional and business services led all sectors with 1,700 jobs added since January. This was followed by Manufacturing adding
600 jobs and Trade, Transportation, and Utilities adding 400 jobs. Sectors which lost jobs since December include Leisure and
Hospitality (600 jobs), Information (100 jobs), Mining and Logging (100 jobs), and Financial Activities (100).

EMPLOYMENT
The unemployment rate in Alabama was 2.6% in January, similar to the revised figure for December 2022. The state’s unemployment
rate is 0.8 percentage points below the national unemployment rate of 3.4%.

Alabama’s labor force participation rate decreased to 56.4% in January from 57.0% in December. The state’s labor force participation
rate has experienced a decline in recent months from its peak of 57.3% in July 2022. The national labor force participation rate was
62.4% in January 2023.

FEBRUARY 2023 REPORT 2

ALABAMA ECONOMIC & REAL ESTATE REPORT

MORTGAGE RATES
The average 30-year fixed rate mortgage was 6.09% to start the month, then increased throughout February reaching 6.73% by the
second week of March. These rates are in line with those of late November 2022. However, the average 30-year fixed mortgage rate
has fallen to 6.60% as of March 16, 2023.

U.S. Fixed-Rate Mortgage Averages

FEBRUARY 2023 REPORT 3

ALABAMA ECONOMIC & REAL ESTATE REPORT

HOUSING MARKET OVERVIEW

Alabama Monthly Home Sales Figures

SALES
The number of sales transactions that Month Sales
Percent Change
Year-over-Year
closed during the month
Year-to-Date 14,404 -22.0%
Home sales activity declined in February. There were February 2023 6,974 -22.3%
6,974 sales during the month, which is 1,998 fewer January 2023 7,430 -21.7%
sales than last February and the lowest February sales December 2022 7,984 -21.9%
in five years. This is a 6.1% decrease in monthly sales;
November 2022 8,852 -18.2%
the decline in sales for February is the third largest in
both sales numbers and in percentage terms for any of October 2022 8,878 -20.9%
the last 12 months. Increasing interest rates September 2022 8,994 -23.5%
throughout the month continued to weigh on the August 2022 9,379 -22.3%
housing market. July 2022 9,255 -22.0%
June 2022 9,138 -19.0%
May 2022 8,989 -16.7%
April 2022 8,858 -14.3%
AAR’s Forecast March 2022 8,803 -11.8%
AAR projects that state total home sales will further
decline from February 2023 to March 2023 by February 2022 8,972 -6.6%
approximately 5.0% to 6,625.

Alabama Home Sales, Monthly Figures

FEBRUARY 2023 REPORT 4

ALABAMA ECONOMIC & REAL ESTATE REPORT

H O U S I N G M A R K E T O V E R V I EW

MEDIAN SALES PRICE Alabama Median Sales Prices

Measures the “middle” price of homes that
Median Sales Percent Change
sold (half of the homes sold for a higher Month
Price ($) Year-over-Year
price and half sold for less) Year-to-Date 209,480 -3.6%
February 2023 206,253 -5.5%
The median sales price decreased by 5.5% January 2023 212,708 -1.6%
year-over-year in February. However, the December 2022 223,083 2.2%
median sales price remains higher relative to November 2022 229,999 5.7%
February 2021 and earlier. The decrease in
the median sales price continues the monthly October 2022 235,499 5.7%
decreases that began in September 2022. September 2022 239,666 7.0%
Median sales prices are down 14.5% in August 2022 241,332 10.4%
February when compared to their peak in July 2022 238,332 9.9%
August 2022.
June 2022 232,332 11.4%
May 2022 226,868 11.9%
April 2022 222,020 14.2%
March 2022 218,687 17.2%
AAR’s Forecast February 2022 218,270 16.7%
AAR projects that state median home sale prices will
further decrease between February 2023 to March
2023 by approximately 2.0% to $202,196.

Alabama Median Sales Prices ($), Monthly Figures

FEBRUARY 2023 REPORT 5

ALABAMA ECONOMIC & REAL ESTATE REPORT

H O U S I N G M A R K E T O V E R V I EW

AVERAGE SALES PRICE Alabama Average Sales Prices

The sum of all sales in dollars divided by the
Average Sales Price Percent Change
number of homes sold Month
($) Year-over-Year
Year-to-Date 238,263 -13.3%
The average, or mean, sales price decreased February 2023 236,559 -14.2%
by 14.2% year-over-year in February. January 2023 239,967 -12.4%
Along with the year-over-year decline, the December 2022 253,668 -5.6%
average price decreased by 1.4% compared
November 2022 247,070 -8.1%
to January. The average home sales price is
at its lowest in two years. October 2022 244,326 -7.9%
September 2022 243,853 -6.3%
August 2022 244,891 -3.7%
July 2022 244,446 -4.4%
June 2022 246,289 -3.7%
May 2022 255,972 2.7%
April 2022 262,359 6.3%

AAR’s Forecast March 2022 269,677 9.7%

AAR projects that state average home sale prices will February 2022 275,805 13.9%
decline by 0.2% between February 2023 to March
2023 to approximately $236,102.

Alabama Average Sales Prices ($), Monthly Figures

FEBRUARY 2023 REPORT 6

ALABAMA ECONOMIC & REAL ESTATE REPORT

H O U S I N G M A R K E T O V E R V I EW

Alabama Sales Volume (in Billions)

SALES VOLUME
Measures the combined sales price of all Sales Volume Percent Change
Month
homes that closed during the month ($) Year-over-Year
Year-to-Date 3.4 -32.3%
February 2023 1.6 -33.3%
The sold dollar volume in February was $1.6
January 2023 1.8 -30.8%
billion, which is down $900 million from
February of last year. This represents a December 2022 2.0 -25.9%
33.3% decline year-over-year. This decline in November 2022 2.2 -24.7%
sold dollar volume is driven primarily by the October 2022 2.2 -27.2%
decrease in the number of sales.
September 2022 2.2 -28.4%
Nevertheless, the sold dollar volume this
month remains greater than the pre-pandemic August 2022 2.3 -25.1%
level in February 2019. July 2022 2.3 -25.7%
June 2022 2.3 -21.9%
May 2022 2.3 -14.5%
April 2022 2.3 -9.0%
March 2022 2.4 -3.3%
AAR’s Forecast February 2022 2.5 6.0%
AAR projects that state residential sales volume will
decrease between February 2023 to March 2023 to
approximately $1.56 billion.

Alabama Sales Volume (in Billions), Monthly Figures

FEBRUARY 2023 REPORT 7

ALABAMA ECONOMIC & REAL ESTATE REPORT

H O U S I N G M A R K E T O V E R V I EW

DAYS ON MARKET Alabama Residential Days on Market

Measures how long it takes a home to sell
Percent Change
after it has been listed on the market Month Days on Market
Year-over-Year
Year-to-Date 73 32.7%
In line with seasonal trends, Alabama homes February 2023 67 48.9%
stayed on the market for a shorter period in January 2023 78 21.9%
February compared to the previous two December 2022 69 16.9%
months. Homes sold in February were on the
November 2022 59 7.3%
market for 67 days on average. This is 22
days longer than one year ago. Even with the October 2022 54 5.9%
recent decline, however, the average days September 2022 52 18.2%
spent on market remains more than double August 2022 45 21.6%
the average of 32 days in April 2022. July 2022 38 5.6%
June 2022 33 -13.2%
May 2022 32 -23.8%
April 2022 32 -28.9%
March 2022 34 -33.3%
AAR’s Forecast February 2022 45 -30.8%
Based upon current economic trends, AAR projects
that state residential days on market will decrease
between February 2023 to March 2023 by
approximately 22.4% to 52 days.

Alabama Residential Days on Market, Monthly Figures

FEBRUARY 2023 REPORT 8

ALABAMA ECONOMIC & REAL ESTATE REPORT

H O U S I N G M A R K E T O V E R V I EW

SUPPLY Alabama Months of Supply

Estimate of the number of months it will take Months of Percent Change
Month
for all homes listed on the market to sell Supply Year-over-Year
Year-to-Date 2.2 61.6%
February 2023 2.3 61.1%
Housing supply levels continued their upward
trajectory in February as there were 2.3 months January 2023 2.1 61.5%
of supply. This figure is more than the 1.4 December 2022 2.1 50.0%
months available a year ago, and is the highest November 2022 2.0 42.9%
level of supply since June 2020. October 2022 2.0 42.9%
September 2022 2.0 42.9%
August 2022 1.9 35.7%
July 2022 1.9 46.2%
June 2022 1.8 22.2%
May 2022 1.7 21.4%
April 2022 1.6 6.7%
March 2022 1.5 0.0%
AAR’s Forecast
Based upon current economic trends, AAR projects February 2022 1.4 -6.7%
that state residential supply will increase between
February 2023 to March 2023 to 2.4 months of supply.

Alabama Months of Supply, Monthly Figures

FEBRUARY 2023 REPORT 9

ALABAMA ECONOMIC & REAL ESTATE REPORT

H O U S I N G M A R K E T O V E R V I EW

RESIDENTIAL LISTINGS Alabama Active Residential Listings

The number of properties listed on the Percent Change
Month Active Listings
market during the year Year-over-Year
Year-to-Date 11,430 68.0%
February 2023 11,104 68.7%
Alabama had considerably more active
listings at the end of February (11,104) January 2023 11,755 67.4%
compared to one year ago (6,584). This December 2022 12,519 56.5%
represents a 68.7% annual increase. November 2022 12,904 50.7%
However, February listings were down 651
relative to January 2023, and mark the third October 2022 12,511 38.0%
consecutive month of decline. September 2022 11,943 29.6%
August 2022 11,812 26.8%
July 2022 11,244 31.3%
June 2022 9,709 29.8%
May 2022 8,250 13.0%
April 2022 7,032 -9.1%
March 2022 6,658 -18.0%
AAR’s Forecast February 2022 6,584 -24.3%
Based upon current economic trends, AAR projects
that state residential active listings will decrease
between February 2023 and March 2023 by 4.4% to
10,617.

Alabama Active and New Residential Alabama Active Residential Listings,

Listings, February Figures Monthly Figures

FEBRUARY 2023 REPORT 10

ALABAMA ECONOMIC & REAL ESTATE REPORT

H O U S I N G M A R K E T O V E R V I EW

FORECLOSURES Alabama Residential Foreclosures

Homeowners failing to pay their mortgages, Percent Change
Month Foreclosures
resulting in lender repossessed homes or Year-over-Year
Year-to-Date 817 42.8%
foreclosure auctions
February 2023 389 34.1%
January 2023 428 51.8%
Alabama had more foreclosures in February 439 76.3%
December 2022
(389) compared to one year ago (290). This
represents a 34.1% annual decrease. November 2022 478 102.5%
Nevertheless, the February figure continues a October 2022 454 96.5%
three-month trend of decreasing foreclosures in September 2022 462 104.4%
the state. 494 149.5%
August 2022
July 2022 466 151.9%
June 2022 447 126.9%
May 2022 385 86.9%
April 2022 351 77.3%
AAR’s Forecast March 2022 324 45.9%
Based upon current economic trends, AAR projects February 2022 290 19.8%
that the number of foreclosures will further decrease
between February 2023 to March 2023 by 4.4% to
372.

Alabama Residential Foreclosures, Monthly Figures

FEBRUARY 2023 REPORT 11

ALABAMA ECONOMIC & REAL ESTATE REPORT

AAR’s Forecast
The slowdown in the Alabama housing market is likely to continue next month. Historically, sales in March are
often lower as sales activity begins to pick up again in April.

Other factors to watch in the near term:

• Average 30-year fixed mortgage rates climbed throughout February from 6.09%, to start the month, to 6.73% by the second
week of March. This rate has fallen to 6.60% as of March 16, 2023. Still, potential buyers may not be able to afford higher
mortgage payments associated with rates above 6.5%, which could cause sale prices to decline. On the other hand, higher
rates tend to deter new construction, which may help limit the decline in average sales price.

• As inflation remains above the Federal Reserve target of 2.0% and national job growth remains strong, markets are expecting
another 0.25% increase in the fed funds rate target at the Federal Reserve’s meeting in March. Increases in the fed funds rate
put upward pressure on mortgage rates.

• While job growth remains strong, there are indications of potential weaknesses in the national economy. The Conference
Board Leading Economic Index decreased again in February, continuing to signal a potential recession in 2023. Additionally,
the ISM Manufacturing Purchasing Managers Index revealed a third consecutive month of contraction in the manufacturing
sector.

• The job market remains strong in Alabama, with 3 consecutive months of job growth recently. The statewide job base has
increased by 40,800 jobs over the last 12 months to over 2.1 million jobs total. The unemployment rate has remained at 2.6%
since June 2022. Additionally, the civilian labor force has increased over the last 4 months. This strengthening of the job
market could minimize average sales price declines and potentially lead to some stronger local housing markets around
Alabama.

FEBRUARY 2023 REPORT 12

Alabama REALTORS® Economic and Real Estate Report

The Alabama Association of REALTORS® (AAR) is the largest statewide organization of real estate

All inquiries regarding this report may be directed to:

Anna Grace Gamble, Director of Communications

Analysis provided by the Alabama Association of REALTORS® Research Team:

Associate Professor, Ph.D.

Professor, Ph.D.

A L A B A M A R E A LT O R S . C O M