Forecast: March sales were 13 percent or 607 units above the Alabama Center for Real Estate‘s (ACRE) monthly forecast. ACRE’s 2017 sales forecast through March projected 11,403 closed transactions, while the actual sales were 12,189 units.
Supply: The statewide housing inventory during March was 28,997 units, a decrease of 3 percent from March 2016 and 30 percent below the March peak in 2008 (41,398 units). There were 5.5 months of housing supply in March (6 months is considered equilibrium), which represents a favorable drop of 14.5 percent from March 2016 (6.5 months).
March inventory increased from February by 11.4 percent. This direction is consistent with historical data that indicate March inventory on average (2012-16) increases from February by 3 percent.
Demand: March residential sales increased 47 percent from February. This direction is consistent with historical statewide data indicating that March sales on average (2012-16) increase from February by 27 percent. The average days on the market until a listing sold was 133 days, down 7 percent from last year. According to the National Association of Realtors March Existing Home Sales Report, March home sales were 6 percent higher than home sales during the same month in 2016, making it the strongest month for home sales since February 2007 nationwide. See how Alabama compares with the U.S. residential market by clicking here.
Pricing: The March median sales price increased 7 percent from the same period last year to $140,129. During March, 64 percent of Alabama markets experienced price gains from March 2016. This indicator can fluctuate from month to month due to sampling size of data and seasonal buying patterns. The March median sales price increased 2.2 percent from February. This direction is consistent with historical data averages (2012-16) reflecting that the March median sales price increases 6.2 percent from February.
Seeking balance: The metro markets in Alabama representing 70 percent of all sales continued to trend toward greater seller bargaining power with 4.6 months of supply. Outside the metro markets, Alabama’s midsized markets are reporting 5.2 months of supply, while rural areas are reporting 12.7 months of supply. There have been significant improvements from inventory peaks experienced during the recession. The supply of quality inventory in the past has affected sales, according to some boots-on-the-ground professionals.
Industry perspective: “Our economic forecast remains in a conservative holding pattern as we await word on the particulars of the new Administration’s plans for fiscal stimulus,” said Fannie Mae Chief Economist Doug Duncan. “In the meantime, economic sentiment from most industry stakeholders continues to reach new heights: consumers, as demonstrated by our National Housing Survey, are more positive than at any time since the survey’s inception in 2010 about the direction of the economy, while homebuilders’ optimism remains near an 11-year high. Tight inventory remains a boon to home prices and Americans’ net worth, but it also continues to price out many would-be first-time homebuyers. However, our research suggests that aging millennials, now boasting higher real wages, are beginning to narrow the homeownership attainment gap.”
Click here to generate more graphs from the Alabama March Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.