Birmingham home prices rise 2 percent in past year

Birmingham home prices rise 2 percent in past year
Birmingham home sales were down 6.1 percent in September from the same month last year, but year-to-date sales for 2017 were 1.5 percent ahead of sales for the first three quarters of 2016. (iStock)

Click here to view or print the entire monthly report compliments of the ACRE Corporate Cabinet.

Sales: According to the Greater Alabama Multiple Listing Service, Birmingham metro-area residential sales totaled 1,215 units during September, 6.1 percent below the same time last year. Total home sales during September 2016 were 1,294. Year to date, Birmingham-area sales are up 1.5 percent from the same period in 2016. Two more resources to review: Quarterly Report and Annual Report.

For all of the Birmingham area’s housing data, click here.

Forecast: September sales were 104 units or 7.88 percent below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE’s 2017 sales forecast through September projected 11,851 closed transactions, while the actual sales were 11,591 units.

Supply: The Birmingham-area housing inventory in September was 6,254 units, a decrease of 10.3 percent from September 2016 and down 53.9 percent from the September peak in 2007 (13,560 units). September inventory in the Birmingham metro area decreased by 3.1 percent from August.

According to the Greater Alabama MLS, in the Birmingham metro-area market, there were 5.1 months of housing supply during September, down 4.4 percent from 5.4 months of supply during September 2016. The “months of housing supply” is a simple calculation – homes listed (supply) divided by homes sold (demand). In general, about 6 months is considered the point of equilibrium.

Demand: September residential sales decreased by 16.4 percent from the prior month. Historical data indicate that September sales, on average (2012-16), decrease from August by 0.4 percent.

Existing single-family home sales accounted for 84 percent of sales, up from 80 percent in September 2016, while 12 percent were new home sales and 4 percent were condo sales.

Pricing: The median sales price in September was $194,000, an increase of 2.1 percent from September 2016 ($190,000). The September median sales price decreased 2.1 percent from August. This direction is consistent with historical data (2012-16) indicating that the September median sales price on average decreases from August by 4.6 percent. Pricing can fluctuate from month to month as the sample size of data is subject to seasonal buying patterns. ACRE recommends consulting with a local real estate professional who has access to pricing data at the neighborhood level.

Industry perspective: “The impacts from this season’s hurricanes on the U.S. economy were wide-ranging but should dissipate over time. These include the loss of momentum in consumer spending and residential investment, as well as a decline in September payrolls and August home sales and contract signings,” said Fannie Mae Chief Economist Doug Duncan. “We expect economic activity to rebound in coming months. The recovery will likely be slower for home sales and home building, however, as the labor shortage and rising material prices will likely worsen after the hurricanes, exacerbating already-tight inventory. While we expect full-year economic growth for 2017 to come in at the same rate projected in our prior forecast, we now believe that total home sales will be essentially flat this year compared with the moderate rise predicted in the prior forecast. Despite muted underlying inflation, we continue to expect the Fed to raise rates for the third time this year in December.”

Click here to generate more graphs from the Birmingham September Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply. 

The Birmingham Residential Monthly Report is developed in conjunction with the Greater Alabama MLS and the Birmingham Association of Realtors to better serve Birmingham metro-area consumers.

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