Montgomery is one of the state's hottest housing markets

Brad Harper
Montgomery Advertiser
A house for sale on Montezuma Road in the Cloverdale neighborhood of Montgomery, Ala., on Wednesday, May 22, 2019.

There just weren’t any homes for sale in the neighborhood. But with a determined buyer on the line, Montgomery Realtor Kim McElroy had an idea: Call an old friend to see if they wanted to sell their house.

The deal went through with the home never officially going up for sale. “We’re having to look outside the box to find houses for our buyers,” McElroy said. “We’ve really noticed in the past year that we have no inventory to sell. People are fighting over houses.”

In fact, the Montgomery area is the most in-demand major housing market in Alabama, according to industry tracking groups.

April data from the Alabama Center for Real Estate shows that residential home sales in the Montgomery area hit their highest point since 2007, and are up 14% over the past year. Meanwhile, there are 17% fewer homes available to buy than this time last year.

Data from the Alabama Center for Real Estate shows total home sales in the Montgomery area since 2001.

The average listing price has jumped from $202,068 to $232,410 since last April, according to the Montgomery Area Association of Realtors. “If we had more houses, we could sell more,” said Brad Owen, the group’s executive vice president.

Some of the state’s other major metro areas have more overall sales or a similar drop in listings, but none have seen the same overall surge of activity. McElroy said that’s because this area is still playing catch-up after the recession, a time during which new home building slowed to a crawl and existing home owners locked in historically low interest rates.

Data from the Alabama Center for Real Estate shows the average home price in the Montgomery area since 2001.

“We like it when you want to move every five years,” said McElroy, a Keller Williams agent who serves as president of MAAR. “But with the rates down as low as (they were), people were buying what they thought they wanted for a while. So now, I think everybody’s more satisfied with where they are so there are less houses on the market.

“Because of the new starts being low for several years, it’s caught up with us and we’re behind. I’ve still got people moving here and can’t find housing.”

She points to the east Montgomery neighborhood of Ryan Ridge, which averages two home sales per month and currently has two homes listed for sale. That’s a one-month supply. “That’s existing homes. There are new houses blowing and going out there, but their numbers look about the same as this,” she said.

Data from the Alabama Center for Real Estate shows the average days on the market for homes in the Montgomery area.

For the market as a whole, there’s about a four-month supply of homes for sale. That’s the lowest supply since the spring of 2006.

Now, Realtors say more new houses are finally being built across the area.

“We’ve had a really good year,” said Jeff Dickey of New Waters Realty in the Pike Road community. There, crews are building new homes that have been pre-sold as well as custom lakefront homes, and “inventory homes” that are selling soon after being built.

Dickey noted that the community’s five-year arc of growth coincided with the opening of Pike Road Schools. “The school just finished its fourth year,” he said.

The Montgomery Public School system has been a source of scrutiny and concern within the city limits. Despite the success of its magnet programs, MPS came under state intervention in 2017 and was threatened the loss of accreditation in 2018.

Still, some of the area’s hottest home-buying markets are within the city. For instance, McElroy said the Cloverdale neighborhood lost very little value during the recession and rebounded quickly when the recession ended. “It’s just a phenom in this area,” she said.

That doesn’t mean every Montgomery home will sell quickly, or at all. McElroy said buyers increasingly avoid anything that needs major work.

“People are wanting new, or they’re wanting updated,” she said.

Krista Johnson contributed to this report.