According to the Alabama Center for Real Estate's latest affordability index, homes in the county were 3.16 percent less affordable in the first quarter of the year compared to the fourth quarter last year. Affordability decreased due to a jump in sales prices during the same period. The price increases, brought on by rising demand and a drop in cheap foreclosures, signal the market is recovering and returning to a more stable, pre-recession level, some housing industry experts say.
Leonard Zumpano, professor of finance at the University of Alabama and the chair of real estate economics for the Alabama Association of Realtors, said those economic signs represent a healthier housing market.
"It is true that housing in general, if affordability decreases, then the ability for buyers to purchase homes decreases," Zumpano said earlier this week. "But coming from a deep recession, the fact that prices are rising and interest rates are remaining stable is probably a sign of a recovering market."
The housing market crashed in 2008, leading to a recession and a high number of foreclosed homes that depressed prices. The industry has struggled to recover ever since. The federal government has kept mortgage interest rates at historically low levels to encourage home buying.
The statistics show the county had an affordability index of 300 during the first quarter compared to an index of 309.7 during the fourth quarter last year. The affordability index is based off a point system — the higher the score, the more affordable the housing market. An index of 100 means a family earning the state's median income has just enough buying power to qualify for a loan on the state's median-priced, single family home.
The county's score means a family earning the state's median income has triple the buying power necessary for a median-priced, single family home. Also, the county's score makes it the fifth most affordable housing market in the state.
"Housing affordability is still better than before the market crashed," Zumpano said.
Everett King of ERA King Real Estate in Anniston agreed with Zumpano that the decrease in the area housing market's affordability was a good sign.
"We're returning to the traditional real estate market of the last 50 years," King said. "Every day more mortgages are getting in a spot to where owners can sell."
King said rising prices must be why affordability is dropping. The statistics show the county had a median home sales price of $101,983 during the first quarter of the year compared to a $97,817 median home sales price in the fourth quarter of 2012. Meanwhile, median family income for the county was $53,100 during the first quarter of 2013 compared to $52,200 in the fourth quarter of 2012.
"Foreclosures are clearing out and interest rates are already low," King said. "What we're only left with is price."
Joey Crews of Keller Williams Realty in Anniston said he has seen improvement in the area housing market in the last few months.
"Foreclosures have become much more limited and there is less inventory on the market than there has been in a long time," Crews said.
Crews said the market changes are particularly good for sellers.
"It's an indicator for buyers that are looking to buy to go ahead and do it," Crews said.
Larry Jackson, owner of Jackson Mortgage in Anniston, said the rising prices will encourage more people to buy, further stimulating the housing market.
"When people looking to buy a home now see prices are edging up, that will cause some to go ahead and pull the trigger," Jackson said.
King said the improving market is also good news for homeowners who since the recession have been underwater, meaning they owe more on their mortgages than their homes are worth.
"Every day, more and more mortgages are coming out from being underwater," King said. "Now what we're seeing is people who thought they couldn't sell ... now they're getting more and more resales at normal levels."
Staff writer Patrick McCreless: 256-235-3561. On Twitter @PMcCreless_Star.