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Alabama Housing Market Overview

As of January 2025, the Alabama median home price is $277,200, a 5.6% YoY growth. This consistent growth in home prices indicates the strength of the housing market. Moreover, the number of homes sold has increased by 3.8% YoY.

Median days on the market is another metric that helps you gauge market competitiveness. Homes for sale in Alabama now spend as long as 72 days on the market before going under contract. This number is up by 9 days year-over-year. These parameters indicate the pace and affordability of the real estate market in Alabama.

What Does it Mean for Home Buyers and Sellers?
  • If You're a Buyer: The extended number of median days on the market gives you the power to negotiate. The mortgage rate of 6.6% makes it relatively easier for home buyers to make their purchase. So, whether you’re looking for a condo in Birmingham or a single-family home in Huntsville, make sure you negotiate a favorable deal.
  • If You're a Seller: Although prices are on the rise YoY, now is not the ideal time to sell your house in Alabama. The number of Alabama houses for sale is steadily increasing. With more inventory available, there will be less competition among buyers. If you still wish to sell your home in the current Alabama market, offer concessions to make your property listing stand out.

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Alabama
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Alabama Housing Supply

The Cotton State’s housing supply will grow as new construction expands. The percentage of Alabama houses for sale increased by 10.6% year over year in January 2025. Currently, there are 23,141 houses in Alabama for sale. The Alabama housing market is presently in favor of buyers, despite the 5-month supply period.

What Does it Mean for Home Buyers and Sellers?
  • If You're a Buyer: You have an advantage with the increased number of AL houses for sale. The rise in inventory aims to potentially meet demand and stabilize the increasing home prices. With 5 months of supply, you should be able to actively negotiate on the prices of homes for sale in Alabama.
  • If You're a Seller: With an increasing number of homes on the market, it’s not the best time to sell your house in Alabama. Alabama homes are spending more days on the market and facing less competition among buyers. So, you’re likely to get fewer offers for your home. If you still want to sell your house in Alabama, focus on staging and marketing your home well, and consider offering concessions.
  • # of Homes for Sale

    # of Newly Listed Homes

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    Alabama Housing Market Demand

    The percentage of homes selling above the list price is a key indicator of housing demand. When more homes sell for more than the list price, it shows strong buyer competition and high demand. Meanwhile, a decline suggests more supply. Tracking this trend helps you gauge market competitiveness.

    14% of homes in Alabama sold above the list price in January 2025. However, this number has reduced by 2.8 points YoY. Furthermore, price drops increased slightly from last year, with 24.5% of homes selling below the list price. The 96.9% sale-to-list price ratio signals potential price flexibility for buyers.

    What Does it Mean for Home Buyers and Sellers?
  • If You're a Buyer: The current Alabama housing market could have a golden opportunity in store for you. The 24.5% of homes with price drops and the low sale-to-list price ratio mean that you have the power to negotiate a favorable deal.
  • If You're a Seller: With only 14% homes selling above the list price, you’ll need to be patient. You can choose to wait till spring and summer when housing demand spikes. During summer, you may experience high demand and more bidding wars for your home. Right now, however, the AL real estate market favors buyers.
  • Homes Sold Above List Price

    Homes with Price Drops

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    Is it a Buyer’s or Seller’s Market in Alabama?

    Strong
    Buyer

    Buyer

    Balanced

    Seller

    Strong
    Seller

    Buyer’s Market

    Seller’s Market

    Buyer: Supply exceeds demand, and homes stay listed on the market for longer, pushing sellers to offer concessions.

    As of January 2025, the Alabama housing market favors home buyers due to increased inventory and extended days on the market. Buyers have more leverage, since housing inventory has increased by 10.6% YoY, and homes take longer to go under contract.

    The sale-to-list price ratio of 96.6% indicates price flexibility for buyers. The current mortgage rates of 6.6% also makes housing in Alabama affordable. While these trends could vary significantly within the state, Alabama is currently a buyer’s market.

    Alabama Housing Market Insights

    The housing market in Alabama is less competitive than the nationwide market. Though homes for sale in AL are getting expensive (now at a median of $277,200), the market favors buyers in general. The increasing number of homes for sale in Alabama, up by 10.6% YoY, indicates that buyers will soon have more inventory options.

    Housing markets like Mountain Brook and Theodore have cooled due to low competition. The median home sale price in these cities has decreased YoY due to low demand. Alabama housing market predictions for 2025 suggest continued growth in most regions, as the market adjusts to economic factors. But, as of January 2025, the housing market in Alabama favors buyers. While 14% homes are sold above listing price, 24.5% have seen price drops. So, if you plan on buying a home in Alabama, this is the right time. Just make sure to consider property taxes, insurance costs, and HOA fees.

    Nationwide Migration Trends

    Alabama was the sixth most popular moving destination for inbound migration in 2024. Many new homebuyers migrate to cities like Huntsville, Madison and Auburn. Most of these migrants are from neighboring states like Georgia, Florida, Mississippi, Tennessee and Texas.

    The cost of living index of Alabama is 87.9, the third-lowest in the country. Most people migrate to Alabama for its affordable cost of living and attractive job market.

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    Frequently Asked Questions

    How have home prices in Alabama changed over the past years?

    Are home prices dropping in Alabama?

    What’s the average price of a house in Alabama?

    What are the Alabama housing market predictions for 2025 and beyond?

    Is now a good time to buy or sell a home in Alabama?

    How is the Alabama housing market compared to the national market?

    What are the best cities to buy a home in Alabama right now?

    How can I list my home for sale in Alabama?

    What is the current mortgage rate for buyers in Alabama?

    When will the housing market crash in Alabama?

    Data provided by Redfin, a national real estate brokerage.

    Important Legal Disclosures

    For Sale By Owner

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    Houzeo Corp. holds real estate brokerage licenses in Alabama (License No. 000157023 - 0) and Texas (License No. 9013396)

    TREC: Info About Brokerage Services, Consumer Protection Notice.

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