Top 5 Markets for New Construction (August 2019)

Top 5 Markets for New Construction (August 2019)

Topics: Home Building, Research, Residential Real Estate

Markets: Athens (Limestone County), Baldwin County - All, Huntsville-Madison County, Lee County, Montgomery Area, Statewide

The Alabama Center for Real Estate created the following rankings based on new construction as a percentage of total residential sales during August. 

  1. 1. Lee County: 32.7%
  2. 2. Athens: 29.7%
  3. 3. Huntsville: 22.6%
  4. 4. Baldwin County: 18.4%
  5. 5. Montgomery: 10.8% 

 

August New Construction Recap

Statewide Overview: Alabama’s existing-home market had an impressive year in 2018 as total sales surpassed the high water mark set in 2005, and the state’s new construction market is trending in the same direction. Total new construction sales have grown year-over-year in 42 of the past 46 months, an impressive streak going back to November 2015. August’s new construction sales increased 8.2% from 694 closed transactions in August 2018 to 751 in August 2019. Despite the upwards trends of new construction sales, listings remain tight compared to previous years. August 2019’s inventory is down 3.8% Y/Y, and new construction listings have declined Y/Y in 11 of the last 15 months. With a 3.8% decrease in year-over-year inventory this month, it was not surprising to see the statewide median sales price increase 3.1% from the same time last year. Stay tuned to see if the state’s new construction and resale markets continue to match or surpass last year’s impressive results. 

Lee County: Total sales of newly constructed residential housing in Lee County increased 6.3% Y/Y from 63 to 67 closed transactions. The median sales price for new construction in the area dropped 5.2% Y/Y from $299,171 to $308,103, and is down 0.7% year-to-date (YTD). New construction inventory remained constant Y/Y at 249 listings. Months of new construction supply decreased from 4.0 to 3.7 months Y/Y. New construction listings sold an average of 18 days slower than one year ago, as the area’s DOM average increased from 85 to 103 Y/Y. New construction represented 32.7% of all residential transactions in the area during August, slightly down from 32.8% one year ago.

Athens:  Falling from the number one spot the prior two months, Athen’s comes in at number two for new construction in the month of August. Total sales of newly constructed residential housing in the Athens area (Limestone County) decreased 11.8% Y/Y from 68 closed transactions in August 2018 to 60 in August 2019. August’s median sales price decreased 7.5% from $305,007 to $282,220. Following statewide trends, new construction inventory has decreased Y/Y for 14 consecutive months in the Athens area. In August, listings declined 24.0% from 154 one year ago to 117 currently. Supply is remaining tight as there were 2.0 months of new construction supply in August. Athen’s DOM average is down from 41 days last year to 38 days currently. New construction represented 29.7% of all residential transactions in the area during August, down from 36.4% one year ago. 

Huntsville: Huntsville (Madison County) continues to lead other metro areas in the state in total new construction sales. There were 183 units sold, representing a significant increase (25.3%) compared to the 146 units sold from one year ago. Similar to Athens and Lee County, Huntsville also saw a decrease in Y/Y median sales price. The August median sales price decreased 8.4% Y/Y from $281,816 to $258,255. Mirroring statewide trends in the new construction market, inventory decreased 15.4% from 519 to 439 listings. Months of new construction supply remains tight at 2.1 months, and average days on market decreased slightly from 50 days one year ago to 46 currently. New construction represented 22.6% of all residential transactions in Huntsville area during August, up from 19.6% one year ago. 

Baldwin County: Total sales of newly constructed residential housing in Baldwin County increased 1.6% Y/Y from 123 to 125 closed transactions. August’s median sales price decreased, falling 2.2% Y/Y from $257,760 one year ago to $252,000 currently. Similar to Alabama’s statewide trends, Baldwin County’s new construction inventory decreased 0.5% Y/Y from 594 to 591 listings. Months of supply in Baldwin county saw a slight decrease Y/Y from 4.8 months last year to 4.7 months currently. Average days on market increased 1 day from 125 last year to the current level of 126. New construction sales represented 18.4% of all residential transactions in the area in August, slightly up from 18.2% one year ago. 

Montgomery: Sliding into the top five areas for new residential construction in August is Montgomery. Total sales of newly constructed residential housing in the Montgomery area remained constant Y/Y at 54 closed transactions. Median sales price posted significant gains in August, as it increased 20.1% Y/Y from $238,960 in August 2018 to $287,077 in August 2019. Going against the statewide trend of declining new construction inventory, listings in the area increased from 160 to 169 units Y/Y. Months of new construction supply increased from 3.0 to 3.1, while average days to sell rose from 97 days one year ago to 101 days currently. New construction sales represented 10.8% of all residential transactions in August, down from 11.9% last year.