Forecast: May sales were 12 percent or 649 units above the Alabama Center for Real Estate‘s (ACRE) monthly forecast. ACRE’s 2017 sales forecast through May projected 21,230 closed transactions, while the actual sales were 22,830 units.
Supply: The statewide housing inventory during May was 26,851 units, a decrease of 12 percent from May 2016 and 37 percent below the May peak in 2008 (42,675 units). There were 4.6 months of housing supply in May (6 months is considered equilibrium), which represents a drop of 20 percent from May 2016 (5.8 months).
May inventory decreased from April by 9 percent. This direction contrasts with historical data that indicate May inventory on average (2012-16) increases from April by 2 percent.
Demand: May residential sales increased 22 percent from April. This direction is consistent with historical statewide data indicating that May sales on average (2012-16) increase from April by 15.7 percent. The average days on the market until a listing sold was 135 days, down 1.5 percent from last year. According to the National Association of Realtors March Existing Home Sales Report, May home sales were 2.7 percent higher than home sales during the same month in 2016. See how Alabama compares with the U.S. residential market by clicking here.
Pricing: The April median sales price increased 1 percent from the same period last year to $146,792. During May, 64 percent of Alabama markets experienced price gains from May 2016. This indicator can fluctuate from month to month due to sampling size of data and seasonal buying patterns. The May median sales price decreased 2 percent from April. This direction contrasts with historical data averages (2012-16) reflecting that the May median sales price increases 2.4 percent from April.
Seeking balance: The metro markets in Alabama representing 70 percent of all sales continued to trend toward greater seller bargaining power with 4.2 months of supply. Outside the metro markets, Alabama’s midsized markets are reporting 4.9 months of supply, while rural areas are reporting 6.1 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: “Once again, our full-year growth forecast remains intact as the economy grinds along, with the prospect of material policy changes appearing to be delayed,” said Fannie Mae Chief Economist Doug Duncan. “We expect consumer spending to resume its role as the biggest driver of growth in the second quarter amid improvements in the labor market. Positive demographic factors should continue to reshape the housing market, as rising employment and incomes appear to be positively influencing millennial homeownership rates. However, the tight supply of homes for sale continues to act as both a boon to home prices and an impediment to affordability.”
Click here to generate more graphs from the Alabama May Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.