Forecast: June sales were 8 percent or 454 units above the Alabama Center for Real Estate‘s (ACRE) monthly forecast. ACRE’s 2017 sales forecast through June projected 26,664 closed transactions, while the actual sales were 28,678 units.
Supply: The statewide housing inventory during June was 20,557 units, a decrease of 33 percent from June 2016 and 53 percent below the June peak in 2008 (43,536 units). There were 3.5 months of housing supply in June (6 months is considered equilibrium), which represents a drop of 37 percent from June 2016 (5.6 months).
June inventory decreased from May by 23 percent. This direction is consistent with historical data that indicate June inventory on average (2012-16) decreases from May by 4 percent.
Demand: June residential sales were unchanged from May. Historical data indicate that June sales on average (2012-16) increase from May by 2.6 percent. The average days on the market until a listing sold was 116 days, down 22 percent from last year. According to the National Association of Realtors March Existing Home Sales Report, May home sales were 0.7 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 June median sales price increased 10 percent from the same period last year to $167,807. During June, 72 percent of Alabama markets experienced price gains from June 2016. This indicator can fluctuate from month to month due to sampling size of data and seasonal buying patterns. The June median sales price increased 14 percent from May. This direction is consistent with historical data averages (2012-16) reflecting that the June median sales price increases 4.5 percent from May.
Seeking balance: The metro markets in Alabama representing 70 percent of all sales continued to trend toward greater seller bargaining power with 4 months of supply. Outside the metro markets, Alabama’s midsized markets are reporting 4.9 months of supply, while rural areas are reporting 8.4 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: “While second-quarter growth is poised to rebound, we expect growth to moderate through the remainder of 2017. Consumer spending, traditionally the largest contributor to economic growth, is sluggish and is lagging positive consumer sentiment and solid hiring,” said Fannie Mae Chief Economist Doug Duncan. “While labor market slack continues to diminish, wage growth is not accelerating and inflation has moved further below the Fed’s target. These conditions support our call that the Fed will continue gradual monetary policy normalization, announce its balance sheet tapering policy in September, and wait until December for additional data, especially on inflation, before raising the fed funds rate for the third time this year.”
Click here to generate more graphs from the Alabama June Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.