Local home sales hit new record in '04
National Realtor expects demand to stay high in future

Home sales in Huntsville and Madison reached a new record last year, making 2004 the third consecutive record-setting year for home sales here.

The number of new and existing homes was 5,537, a number based on residential sales transactions processed through the Multiple Listing Service at the Huntsville Area Association of Realtors. That's an 11.6 percent increase over 2003 sales of 4,962.

Cliff Mann, the 2005 president of the Huntsville Area Association of Realtors, said continued low mortgage rates "played a big part" in the sales record, while greater flexibility in financing options, especially those for first-time home buyers, also helped.

"The Huntsville economy has remained strong and quite diverse," Mann said.

The median selling price for homes in the county in 2004 was $133,325, up 6.7 percent over 2003 and 12.6 percent higher than 2002.

Even if mortgage rates increase this year as expected, the increase won't significantly affect the housing market, said Al Mansell, the president of the National Association of Realtors.

The demand for new construction last year far exceeded the supply, and "for the next five years, demand will remain strong," said Mansell, a state senator from Utah who was in Huntsville Friday to speak to the Huntsville association.

David Lereah, the chief economist of the National Association of Realtors, has said he expects the 30-year, fixed-rate mortgage rate will increase to 6.5 percent by the end of this year.

Mann said the Housing Affordability Index for Madison County remained strong - at 213.5 for the third quarter of 2004. The index, which is based on a formula developed by the National Association of Realtors, essentially measures how much home a consumer can buy if making the media income for a metropolitan area.

"A person making the media income can purchase a home that is approximately two times the median selling price in our area," Mann said. Factors contributing to the affordability index ranking are a median income that is higher than the national average, a local median selling price below the national average and favorable interest rates.