Compiled by Speakin’ Out News
Huntsville’s housing market could witness a return to the frenzy of quick sales and above-asking prices, according to Kurtis Krueger, the new CEO of the Huntsville Area Association of Realtors. Krueger suggests that if interest rates decline in the coming months, a surge in home-buying activity might be on the horizon.
From Krueger’s perspective, the present moment is opportune for homebuyers, emphasizing that home values traditionally do not decline. He points to insights from Lawrence Yun, chief economic advisor of the National Association of Realtors, indicating potential rate reductions to the mid-to-low 7s by year-end and the possibility of hitting the 6s by spring next year.
Bennie Waller, William Carey Hulsey Fellow at the University of Alabama’s College of Business, supports this view, anticipating increased homebuyer activity with reduced rates. However, he doesn’t foresee a substantial surge in housing supply, potentially keeping home prices elevated.
The housing market experienced a slowdown as interest rates rose from 3% in 2021 to as high as 8% this year. Krueger and Tim Knox of Leading Edge Real Estate Group suggest that some prospective buyers might be waiting for rates to decrease again.
While Krueger doesn’t expect rates to return to the 2%-3% levels seen in 2021, he believes that if rates drop to 6%, it would surpass the historical average. He cautions that the fear-driven perception of a poor time to buy is currently prevalent, creating negotiating room for those ready to enter the market.
Krueger envisions spring of next year as a pivotal turning point, predicting a successful transition to the next phase with lower rates. He emphasizes the importance of learning from historical rate trends, considering the 2 1/2-3% period as a fortunate anomaly.
In the era of ultra-low rates, homes in Huntsville and surrounding areas stayed on the market for less than a week, fetching multiple offers above asking price. However, as of September, homes in the Huntsville area were averaging 29-30 days on the market, with sellers achieving their asking prices.
The Huntsville Area Association of Realtors notes that while sales have slowed compared to the record year in 2021, they still outpace averages at state, regional, and national levels. Inventory has increased over the past year, with 400 more homes on the market in Madison County in September compared to the previous year.
Krueger acknowledges the strategic efforts of city government and development partnerships in addressing housing needs, particularly in the $250,000-$300,000 price range. He commends the city’s focus on this tier, aiming for equity and success.
New construction could play a crucial role in boosting inventory, and Krueger suggests the region might see continued growth in this area with supply issues and market disruptions becoming less significant for homebuilders.
