Sales: According to the Montgomery Area Association of Realtors’ Multiple Listing Service, Montgomery-area residential sales totaled 393 units during August, a decrease in sales of 1.5 percent from August 2016’s total of 399 units. Year to date, sales are up 1.4 percent from the same period of 2016. Another resource to review is the Annual Report.
Forecast: Closed transactions during August were 6 units or 1.5 percent above the Alabama Center for Real Estate’s monthly forecast. ACRE’s year-to-date sales forecast through August projected 2,834 closed transactions, while the actual sales were 3,000 units.
Supply: The Montgomery area housing inventory in August was 2,289 units, a decrease of 10.7 percent from August 2016 and 33 percent below the month-of-August peak in 2007 (3,434 units).
There were 5.8 months of housing supply during August, a decrease of 9.4 percent from the same time in 2016. About 6 months of supply is considered a balanced market during August, with buyer and seller having equal bargaining power.
August inventory in the Montgomery area increased 0.8 percent from the prior month. This direction contrasts with historical data indicating August inventory on average (2012-2016) decreases from July by 1.7 percent.
Demand: August residential sales decreased 0.8 percent from the prior month. This direction is consistent with seasonal patterns and historical data indicating that August sales, on average (2012-2016), decrease from July by 2.4 percent.
Existing single-family home sales accounted for 83 percent of total sales, while new construction sales made up 16 percent and condos made up 1 percent.
Pricing: The Montgomery-area median sales price in August was $160,000, up 7.4 percent from August 2016 ($149,000). The median sales price increased 5 percent from the prior month. Historical data (2012-2016) indicate the August median sales price typically decreases from July by 4.5 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.
Industry perspective: “For the first time in 2017, we have increased our full-year growth outlook. The upgrade reflects economic activity gaining momentum at the end of the second quarter, though we see a great deal of uncertainty surrounding the forecast,” said Fannie Mae Chief Economist Doug Duncan. “The list of uncertainties now extends beyond the geopolitical and legislative, as the effects of Hurricanes Harvey and Irma will require time to untangle. Historically, natural disasters that hit heavily populated areas led to substantial near-term declines in economic activity but meaningful rebounds in subsequent quarters due to rebuilding efforts. Thus, economic growth in the second half of 2017 could still average a slightly stronger pace than the first half. Unfortunately, we continue to expect home sales to be flat during the second half of the year compared to the first half due to strong home price appreciation and lean inventories.”