Alabama’s latest market data suggests the state is inching closer to a buyers’ market where homebuyers are likely to be more selective in price, size, location, and features. Typically, a buyers’ market occurs when the number of houses for sale exceeds demand. REALTOR®/broker Kelly Woodham doesn’t see a buyers’ market yet but agrees the market is not as heavily in favor of sellers as it has been in the last couple of years.  

According to the April Alabama Economic & Real Estate Report, released by the Alabama Association of REALTORS® (AAR), the supply of houses for sale in Alabama climbed in April to a 2.5-month supply – the highest level since June 2020. Active listings also rose in April with a 56.3 percent increase over April 2022.  Meanwhile, sales volume decreased in April by 33.3 percent. AAR’s economic forecast predicts that supply will continue to increase in May.

Woodham, based in Dothan with Forrest and Fields Realty, observed inventory is actually low in certain price points. “Many of my clients are still shopping at the top of their price range due to low inventory.  They’re seeing higher interest rates which means larger mortgage payments with no extra money for major repairs or renovations. Finding homes that don’t require a lot of repairs and upgrades is a priority,” said Woodham.  “In my area, we’re seeing a good bit of new construction, but all of it is close to $300,000 and above. With rising interest rates, that is higher than an average family can afford.”

With more active listings and fewer sales, REALTORS® are seeing buyers who are less rushed and can shop around for homes and features they prefer. “Buyers are looking for more space inside the home – be it a fourth bedroom, office, or bonus room – because many find themselves working from home or needing a separate space for kids and adults,” explained  Woodham. “Outdoor living spaces, whether it’s just a covered or screened-in porch or something more elaborate with an outdoor fireplace and kitchen, are in demand as well.  Many are looking for an outdoor space to enjoy with family and friends.”

Many of Woodham’s homebuyers are seeking areas with access to high-speed internet.  “Working in an area that still has a large number of houses in growing rural areas, I am thankful that efforts to expand access have been moving quickly to keep up with the new demand.”

Tuscaloosa owner/broker Juanita Taggart-Jones observed that buyers in her market have five priorities:  location, price and affordability, condition and maintenance, future growth and development, and resale value. “Location is usually the number one top priority for buyers. Proximity to schools, workplaces, amenities, transportation options and desirable neighborhoods can significantly impact a buyer’s decision,” she said.

Taggart-Jones pointed out that recent hikes in interest rates make affordability a crucial consideration.  “Buyers often have a budget in mind and seek properties that fit within their financial means. They also take into consideration the age, maintenance history, and any necessary repairs or renovations. Buyers generally prefer well-maintained properties that require less immediate work.  Rising inflation is leading homebuyers to look for homes already updated with modern kitchens and bathrooms,” said Taggart-Jones. AAR’s April Alabama Economic & Real Estate Report found the Consumer Price Index (CPI) for all items rising 4.9% compared to April 2022.  

Money isn’t the only thing homebuyers are careful about spending. “Easy-to-maintain landscaping and low maintenance features are appealing as homebuyers prefer to spend less time on upkeep,” Taggart-Jones noted.

Taggart-Jones pointed to resale value and future growth and development as considerations for homebuyers in the Tuscaloosa area. “Buyers now are considering the potential resale value of a property.  Some look for properties in neighborhoods projected to appreciate in value or are undergoing revitalization or infrastructure improvements.”