The spring homebuying season started slowly for some national builders, but the market for existing homes in Alabama is surging on the state's strong job base and an attractive lifestyle.
The state recorded 6,214 home and condo sales in March, up 5.6% from the prior month and 23.2% from the same month last year, according to the Alabama Association of Realtors. The median sales price of $230,000 increased 9% from February and 13.4% from March 2024. The median means half sold for more than $230,000 and half for less.
In addition, homes listed in Alabama are trading hands faster. The average days on market was 61 in March, down by 18 days from February and six days from a year earlier.
"A key to Alabama's growth has been its economy," said Toby Jorgensen, senior director of market analytics for Homes.com and CoStar, in an email. "All the metros in the state offer families a small-town feel while offering great opportunities within the workforce."
The state had 18,415 active listings last month, a 26.2% jump from a year earlier. Home listings also are on the rise in Florida, Texas and other states as more owners locked into historically low mortgage rates decide to sell as they move for new jobs and other life events, analysts say.
Another reason listings are increasing is that spring typically is the busiest time for residential real estate as families look to buy and get settled before the start of a new school year.
Demand disappoints homebuilders
But KB Home, D.R. Horton, Lennar and other U.S. homebuilders said spring demand has been softer than they expected this year. KB lowered prices and projections for future sales, citing buyers' affordability concerns, though lower mortgage rates earlier in the spring helped boost new home sales last month, according to government data released Wednesday.
“We’ve heard similar concerns from Alabama builders, but the market does not show a major impact yet," said Jeremy Walker, CEO of the Alabama Realtors group, in an email. "We’re closely monitoring how tariffs on construction materials and immigration raids affecting construction labor may impact the market. Inflation has already made it harder for builders to deliver affordable homes — especially for first-time buyers.”
Critics say Alabama is too rural, but job growth is helping to change that perception and boost home values. In Huntsville, home to NASA's Marshall Space Flight Center, the median sale price at the end of March was $325,000, up 2% from a year ago, according to Homes.com data. Prices are more moderate north of Huntsville, in Birmingham. The median sale price there is $230,000, a 7% increase from a year prior, the data shows.
A U.S. Army arsenal base in Huntsville employs about 50,000 people and has attracted major government defense contractors in the technology and advanced manufacturing sectors, including Boeing and Lockheed Martin, Jorgensen noted. He also said the metropolitan area benefits from a 2,000-employee Toyota-Mazda manufacturing facility, the company's largest engine producer in North America.
Meanwhile, more than $725 million in capital investment has poured into the greater Birmingham region since 2018, creating more than 2,200 jobs, according to Jorgensen. The University of Alabama at Birmingham, or UAB, is the area's largest employer with a staff of about 21,000.
What's more, the state's gross domestic product grew by 3.8% in the fourth quarter, the fifth-highest rate in the nation, according to Walker.
"Strong economic development and housing policies, driven by state and legislative leadership, continue to attract new businesses and residents," he said. "Americans seeking economic opportunity and a higher quality of life are finding both in Alabama.”