Sales: According to the Montgomery Area Association of Realtors’ Multiple Listing Service, Montgomery-area residential sales totaled 343 units during September, a decrease in sales of 1.7 percent from September 2016’s total of 349 units. Year to date, sales are up 1.1 percent from the same period of 2016. Another resource to review is the Annual Report.
Forecast: Closed transactions during September were 6 units or 1.8 percent above the Alabama Center for Real Estate’s monthly forecast. ACRE’s year-to-date sales forecast through September projected 3,171 closed transactions, while the actual sales were 3,343 units.
Supply: The Montgomery area housing inventory in September was 2,269 units, a decrease of 10.7 percent from September 2016 and 37.5 percent below the month-of-September peak in 2007 (3,629 units).
There were 6.6 months of housing supply during September, a decrease of 9.1 percent from the same time in 2016. About 6 months of supply is considered a balanced market, with buyer and seller having equal bargaining power.
September inventory in the Montgomery area decreased 0.9 percent from the prior month. This direction is consistent with historical data indicating September inventory on average (2012-2016) decreases from August by 1.6 percent.
Demand: September residential sales decreased 12.7 percent from the prior month. This direction contrasts with seasonal patterns and historical data indicating that September sales, on average (2012-2016), increase from August by 1.7 percent.
Existing single-family home sales accounted for 85 percent of total sales, while new construction sales made up 13 percent and condos made up 2 percent.
Pricing: The Montgomery-area median sales price in September was $150,000, up 1.4 percent from September 2016 ($148,000). The median sales price decreased 6.3 percent from the prior month. Historical data (2012-2016) indicate the September median sales price typically decreases from August by 1.3 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: “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.”