The months of supply, a crucial metric indicating market balance, stood at 3.3 months in Q4 2023. While this is considered below the equilibrium point of approximately 6 months, it is essential to note that compared to historical data, the fourth quarter months of supply is 23.4% above the 3-year quarterly average and 11.3% below the 5-year quarterly average.
This suggests a nuanced market condition where there might be more inventory than usual, yet the months of supply are still below historical averages. This intricate balance indicates a market that may lean towards a seller's advantage but with factors that could shift the dynamics in the future.
How is the Montgomery housing market doing currently?
How is the Housing Market Doing Currently?
According to the quarterly report published by the Alabama Center for Real Estate (ACRE), the Montgomery housing market has experienced significant shifts in the fourth quarter of 2023. Residential sales during this period totaled 1,009 units, reflecting a 10.8% decrease compared to the same quarter in 2022, where 1,131 units were sold. This decline raises questions about the current state of the market.
Compared to historical data, the fourth quarter sales are noteworthy, being 33.8% below the 3-year quarterly average and 26.0% below the 5-year quarterly average. These figures indicate a deviation from the typical market performance, warranting a closer look into the factors influencing this decline.
How Competitive is the Montgomery Housing Market?
Examining the median sales price in Montgomery for the fourth quarter of 2023 reveals interesting insights. The median sales price reached $226,337, marking a 5.3% increase from the same period in 2022, where it stood at $215,000. Despite the decrease in sales volume, the rise in median price suggests a level of competitiveness in the market.
Comparing this data with historical trends, the fourth quarter median sales price is notably higher, being 8.9% above the 3-year quarterly average and 19.6% above the 5-year quarterly average. This indicates a nuanced scenario where prices are on the rise despite a dip in sales.
Are There Enough Homes for Sale in Montgomery to Meet Buyer Demand?
The average sales price in Montgomery for the fourth quarter of 2023 was $244,703, showing a 2.9% decrease from the fourth quarter of 2022. This decrease might suggest an adjustment in prices to meet the current demand dynamics.
However, when comparing to historical data, the fourth quarter average price is 3.0% above the 3-year quarterly average and 14.5% above the 5-year quarterly average. This raises questions about the balance between supply and demand, indicating that while prices have adjusted, they remain higher than historical averages.
What is the Future Market Outlook for Montgomery?
The average number of days on the market (DOM) in the fourth quarter of 2023 was 68, signifying a 14.7% increase from the same period in 2022. Despite this increase, the current average DOM is 9.2% below the 5-year quarterly average and 15.1% above the 3-year quarterly average.
Additionally, residential units available for sale in the fourth quarter of 2023 increased by 18.2% compared to the same period last year. This surge in available units could influence the future market dynamics, potentially impacting pricing and competitiveness.
Montgomery has seen the job market increase over the last year. Future job growth over the next ten years is predicted to be 30.3%. With affordable home prices, lower taxes, and a low cost of living, Montgomery is also a great city to live in and invest in real estate.
Montgomery Alabama Housing Market Forecast for 2024 and 2025
According to Zillow, the Montgomery housing market is displaying promising trends, with the average home value standing at $136,482, reflecting a 2.3% increase over the past year. Homes in Montgomery are swiftly going pending in approximately 22 days, indicating a dynamic pace in the market as of January 31, 2024.
For Sale Inventory (January 31, 2024): 686
Examining the current inventory, there are 686 homes available for sale in Montgomery as of January 31, 2024, highlighting the range of choices for potential buyers.
New Listings (January 31, 2024): 165
The market is experiencing ongoing activity, with 165 new listings surfacing in Montgomery as of January 31, 2024, contributing to the diversity of available properties.
Median Sale to List Ratio (December 31, 2023): 0.983
The median sale to list ratio, standing at 0.983 as of December 31, 2023, signifies a balanced relationship between listing prices and actual sale prices, showcasing stability in the market.
Median Sale Price (December 31, 2023): $146,492
The median sale price in Montgomery, recorded at $146,492 as of December 31, 2023, provides insight into the affordability and valuation trends in the housing market.
Median List Price (January 31, 2024): $178,300
As of January 31, 2024, the median list price in Montgomery is $178,300, giving potential buyers an idea of the prevailing price range in the market.
Percent of Sales Over/List Price (December 31, 2023): 19.7%
The data shows that 19.7% of sales in Montgomery, as of December 31, 2023, are surpassing the list price, indicating a competitive landscape in certain segments of the market.
Percent of Sales Under List Price (December 31, 2023): 59.4%
Conversely, 59.4% of sales in Montgomery, recorded on December 31, 2023, are occurring under the list price, suggesting opportunities for buyers to negotiate favorable deals.
The Montgomery MSA Housing Market Forecast
Intriguingly, the Montgomery Metropolitan Statistical Area (MSA) housing market is anticipated to see positive growth. The forecast for the region, as of January 31, 2024, projects a steady increase, with a forecasted rise of 0.7% by April 30, 2024, and a more substantial growth of 2.8% by January 31, 2025.
MSA refers to a Metropolitan Statistical Area, and in the case of Montgomery, Alabama, it encompasses various counties within the state. This includes a comprehensive housing market that incorporates diverse neighborhoods and communities, contributing to the overall vibrancy of the real estate landscape. The size of the housing market in Montgomery's MSA is considerable, reflecting a dynamic blend of urban and suburban living options.
Are Home Prices Dropping in Montgomery?
The current data does not suggest a drop in home prices in Montgomery. As of December 31, 2023, the median sale price stands at $146,492, reflecting a 2.3% increase over the past year. The stability in the median sale to list ratio (0.983) further supports the notion that home prices are maintaining their value. However, real estate markets can be dynamic, and it's essential to stay informed about any emerging trends that may impact pricing in the future.
Will the Montgomery Housing Market Crash?
There is no evidence to suggest an impending housing market crash in Montgomery. The current indicators, including a steady median sale to list ratio and a positive forecast for the MSA, point towards a resilient market. However, it's crucial to monitor economic factors, interest rates, and external influences that could potentially impact the real estate landscape. Regular updates and expert advice can provide valuable insights into any shifts in the market that may affect its stability.
Is Now a Good Time to Buy a House in Montgomery?
Considering the diverse factors at play, now could be a favorable time for buyers in the Montgomery housing market. The average home value is on the rise, but with 59.4% of sales recorded under the list price as of December 31, 2023, there may be opportunities for buyers to negotiate favorable deals. Additionally, the forecasted growth in the MSA suggests a positive trajectory, making it potentially advantageous for buyers to enter the market. As with any real estate decision, careful consideration of personal circumstances and market trends is crucial to making an informed choice.
Note: All data and forecasts are subject to change based on evolving market conditions.
Investing in the Montgomery Real Estate Market: A Comprehensive Analysis
1. Population Growth and Trends
Montgomery's population growth and trends play a pivotal role in assessing the city's real estate investment potential. The city has experienced steady growth, with a burgeoning population that signifies a demand for housing. This sustained growth is indicative of a robust real estate market with opportunities for both short-term and long-term investments.
2. Economy and Jobs
- Diverse Economy: Montgomery boasts a diverse economy, with sectors such as manufacturing, healthcare, and government contributing significantly. A diversified economy is a positive indicator for real estate investors, providing stability and resilience against economic downturns.
- Job Opportunities: The presence of various industries translates to ample job opportunities, attracting a steady influx of residents. Low unemployment rates and job security contribute to a stable housing market, making Montgomery an attractive destination for real estate investments.
3. Livability and Other Factors
Montgomery's livability, including factors such as education, healthcare, and cultural amenities, adds value to its real estate market:
- Educational Institutions: Presence of reputable schools and higher education institutions enhances the city's appeal, attracting families and students, thereby supporting a consistent demand for housing.
- Healthcare Facilities: Access to quality healthcare is a key consideration for residents. A well-developed healthcare system contributes to the overall attractiveness of Montgomery for potential investors.
- Cultural Amenities: A vibrant cultural scene, including museums, parks, and entertainment options, contributes to the overall quality of life. This factor is vital for attracting a diverse range of residents, positively influencing the real estate market.
4. Rental Property Market Size and Growth
The rental property market in Montgomery is of significant interest to investors:
- Steady Demand: With a growing population and a diverse economy, the demand for rental properties remains robust. Investors can capitalize on this demand, especially considering the city's appeal to young professionals and families.
- Market Size: The size of the rental property market provides ample opportunities for investors to diversify their portfolios. From single-family homes to multi-unit complexes, Montgomery offers a range of options to suit various investment strategies.
- Growth Potential: Projections for the rental market's growth indicate a positive trajectory. Factors such as job opportunities, educational institutions, and the city's overall attractiveness contribute to sustained growth in the rental sector.
5. Other Factors Related to Real Estate Investing
Additional factors that make Montgomery an attractive destination for real estate investment include:
- Affordability: Montgomery's relatively affordable housing market compared to national averages is a key factor for investors seeking attractive entry points and potential returns.
- Infrastructure Development: Ongoing and planned infrastructure developments can enhance property values and contribute to the overall growth of the real estate market.
- Investor-Friendly Regulations: Understanding local regulations is crucial for real estate investors. Montgomery's investor-friendly environment, coupled with clear regulations, supports a favorable investment climate.
Considering the population growth, economic stability, livability factors, the size and growth of the rental market, and other favorable conditions, investing in the Montgomery real estate market presents a compelling opportunity for investors looking for a dynamic and potentially lucrative market.
References:
- https://www.zillow.com/montgomery-al/home-values/
- https://acre.culverhouse.ua.edu/category/statewide/montgomery-area/
- https://acre.culverhouse.ua.edu/research/residential-research/montgomery/