Sales: Alabama home sales totaling 4,689 units during September were a decrease of 1 percent from the same month a year ago. Year-to-date, 2017 sales remained 6.5 percent ahead of sales for the first three quarters of the previous year. Two more resources to review: Quarterly Report and Annual Report.
Forecast: September sales were 3.6 percent or 161 units above the Alabama Center for Real Estate‘s (ACRE) monthly forecast. ACRE’s 2017 sales forecast through September projected 41,485 closed transactions, while the actual sales were 44,360 units.
Supply: The statewide housing inventory during September was 26,197, a decrease of 10.6 percent from September 2016 and 38.2 percent below the September peak in 2007 (42,393 units). There were 5.6 months of housing supply in September (6 months is considered equilibrium), which represents a drop of 9.7 percent from September 2016 (6.2 months).
September inventory decreased from August by 4.7 percent. This direction is consistent with historical data that indicate September inventory on average (2012-16) decreases from August by 2.5 percent.
Demand: September residential sales dropped 17.3 percent from August. Historical data indicate that September sales on average (2012-16) decrease from August by 9.7 percent. The average days on the market until a listing sold was 117 days, down 10.5 percent from last year. According to the National Association of Realtors September Existing Home Sales Report, September home sales were 0.7 percent higher than home sales during the same month in 2016.
Pricing: The September median sales price increased 6.9 percent from the same period last year to $157,421. During September, 80 percent of Alabama markets experienced price gains from September 2016. This indicator can fluctuate from month to month due to sampling size of data and seasonal buying patterns. The September median sales price increased 2.2 percent from August. This direction is consistent with historical data averages (2012-16) reflecting that the September median sales price increases 2.2 percent from August.
Seeking balance: The metro markets in Alabama representing 70 percent of all sales continued to trend toward greater seller bargaining power with 5 months of supply. Outside the metro markets, Alabama’s midsized markets are reporting 6.1 months of supply, while rural areas are reporting 7.3 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: “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 Alabama September Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.