Archive for the Real Estate News Category

By: Alabama Center for Real Estate (ACRE)

Sales: Alabama residential sales totaling 4,594 units in August reflect an increase of 9.6 percent growth from the same period a year earlier. Sales for the month continue to trend upward for the state, which bottomed out at 3,000 sales in August 2010, but has improved each year since. Sales are 21.5 percent above the August five-year sales average (’10-’14) of 3,781 units. Year-to-date sales through August are up 13.8 percent from 2014.

Forecast: August sales were 1.9 percent or 89 units above our monthly forecast. ACRE’s year-to-date sales forecast through August projected 28,071 closed transactions while the actual sales were 34,467 units, a 22.7 percent cumulative variance.

Supply: The statewide housing inventory in August was 33,203 units, a decrease of 1 percent from August 2014 and 21.2 percent below the month of August peak in 2007 (42,150 units). There was 7.2 months of housing supply in August (6.0+/- months NSA considered equilibrium), which represents a favorable drop of 9.7 percent from August 2014 (8 months). August inventory also decreased from July by 2 percent. This direction contrast with historical data that indicates August inventory on average (’10-’14) increases from the month of July by .4 percent.

Demand: July residential sales decreased 13.2 percent from the prior month. This direction contrasts with historical statewide data indicating that August sales on average (’10-’14) increase from the month of July by .4 percent. The average Days on Market (DOM) until a listing sold was 149 days, 8.2 percent faster than last year. Nationally, August sales were 6.2 percent above the same period last year (SA).

In August across Alabama, 76 percent (was 84 percent in July) of local markets report positive sales growth compared to last August. Sales during the month were 53.1 percent above the month of August bottom experienced in 2010 but remains 18.7 percent off the August 2005 peak.

Pricing: The August median sales price increased .4 percent from the same period last year. In August, 12 of 25 or 48 percent of local markets experienced price gains from August 2014. Keep in mind that this indicator can fluctuate from month-to-month due to sampling size of data and seasonal buying patterns. The August median sales price increased 2 percent from the prior month. This direction contrasts with historical data averages (’10-’14) reflecting that the August median sales price increases 5 percent from the month of July.

Seeking Balance: The metro markets in Alabama representing 70 percent of all sales continued to trend toward greater seller bargaining power with 6.5 months of supply. Outside of the metro markets, Alabama’s mid-sized markets are reporting 7.7 months of supply, while rural areas are still reporting 10 months of supply. With that said, there has being significant improvements from inventory peaks experienced during the recession. The supply of “quality” inventory in the past has impacted sales according to some local professionals with boots on the ground.

National Industry Perspective: “Home sales have trended up and inventories are lean, supporting strong home price appreciation. That price growth, driven by laggard supply response, helps build equity for existing owners but is a headwind for first-time buyers,” said Doug Duncan, senior vice president and chief economist at Fannie Mae.”Given significant uncertainties from Greece and China, continued global monetary easing, and an expected slow pace of monetary tightening by the Fed, we anticipate mortgage rates to rise only gradually through next year, which should continue to help support mortgage demand.”