Alabama home sales enjoy best 4Q since 2006
Earlier this week Bryan Davis with the Alabama Center for Real Estate at the University of Alabama released the fourth quarter numbers of 2016 for Alabama and the results are impressive. Some highlights from the ACRE report are below:
Alabama residential sales during the fourth quarter of 2016 continued to improve, up 11 percent compared to the same period a year earlier. Total sales of 12,116 units represent the best fourth quarter since 2006. With that said, fourth-quarter sales are still 13 percent below the quarterly peak established in 2005, when 14,016 units were sold.
Supply: The statewide housing inventory average during the fourth quarter was 28,955 units, a decrease of 10 percent from the same period in 2015 and 29 percent below the fourth-quarter peak in 2007 (40,935 units). There were 7.2 months of housing supply in the fourth quarter of 2016 (with 8 months considered equilibrium during the fourth quarter), representing a favorable decline of 15 percent from the same period last year. Historical data indicate that the fourth-quarter inventory-to-sales ratio in 2016 decreased 29 percent from the five-year average (10 months) and decreased 22.5 months from the three-year average (9.3 months).
Demand: Historical data indicate that fourth-quarter sales in 2016 increased by 17 percent from the most recent three-year average (2013-15) and 24 percent from the five-year quarterly average (2011-15).
Pricing: The statewide median sales price during the fourth quarter was $141,555, an increase of 5.2 percent from the same quarter in 2015. Historical data indicate that the fourth-quarter median price in 2016 increased by 7.8 percent from the most recent three-year average and 11 percent from the five-year quarterly average (2011-15).
Sales: According to the Montgomery Area Association of Realtors’ Multiple Listing Service, Montgomery-area residential sales totaled 303 units during November, an increase in sales of 6 percent from the same month last year. Year-to-date sales decreased 1.8 percent from the same period of 2015.
Forecast: Closed transactions during November were nine units or 3 percent below the Alabama Center for Real Estate’s monthly forecast. ACRE’s year-to-date sales forecast through November projected 3,994 closed transactions, while the actual sales were 3,921 units, a negative difference of 2 percent.
Supply: The Montgomery area housing inventory in November was 2,280 units, a decrease of 12 percent from November 2015, and 34 percent below the month-of-November peak in 2007 (3,432 units).
There were 7.5 months of housing supply during November, a decrease of 17 percent from the same time last year. About 6 months of supply is considered a balanced market during November, with buyer and seller having equal bargaining power.
November inventory in the Montgomery area decreased 6 percent from the prior month. This direction is consistent with historical data indicating November inventory on average (2011-2015) decreases from October by 3 percent.
Demand: November residential sales decreased 3 percent from the prior month. This direction is consistent with seasonal patterns and historical data indicating that November sales, on average (2010-2014), decrease from October by 13 percent.
Existing single-family home sales accounted for 84 percent of total sales, while new construction sales made up 15 percent.
Pricing: The Montgomery-area median sales price in November was $139,900, up 4 percent from last November ($135,000). The median sales price decreased 0.8 percent from the prior month. Historical data (2011-2015) indicate the November median sales price typically decreases from October by 4 percent. Pricing can fluctuate from month to month as the sample size of data (closed transactions) is subject to seasonal buying patterns. ACRE recommends contacting a local real estate professional for additional market pricing information.