Sales: According to the North Alabama Multiple Listing Service, Athens-area residential sales totaled 103 units during January, an increase of 4 percent from the same month in 2017, when sales totaled 99 units. Existing single-family homes accounted for 63 percent of all January residential sales, while newly constructed homes were 36 percent and condos were 1 percent. Two more resources to review: Quarterly Report and Annual Report.
For all Athens-area housing data, click here.
Forecast: January sales for the Athens area were three units, or 3 percent, above the Alabama Center for Real Estate’s monthly forecast. ACRE projected 100 sales for the area during January, while the actual sales were 103 units. ACRE forecasts 1,931 total sales for the Athens area in 2018; the actual 2017 sales totaled 1,700 units.
Supply: Housing inventory in the Athens area totaled 524 units during January, a decrease of 20.2 percent from the same month in 2017. January inventory was 5.6 percent below the prior month. This trend goes against historical data indicating that January inventory on average (2013-17) increases from December by 2.9 percent. The inventory-to-sales ratio in January was 5.1 months of housing supply. Restated, at the January sales pace, it would take 5.1 months to absorb the current inventory for sale. This is a decrease of 23.3 percent from 6.6 months of supply in January 2017. The market equilibrium (balance between supply and demand) is approximately 6 months.
Demand: January residential sales in the Athens area dropped 22 percent from the prior month. This is consistent with historical data indicating that January residential sales on average (2013-17) decrease from December by 20.6 percent. Homes selling in January averaged 82 days on the market, representing a decrease of 14.6 percent from the same month in 2017. Homes in the Athens area are selling much more quickly than in previous years, as the five-year days-on-market average for January is 123 days.
Pricing: The Athens-area median sales price in January was $195,000, an increase of 15.4 percent from January 2017 and a decrease of 10.9 percent from December. Pricing can fluctuate from month to month as the sample size of data (closed transactions) is subject to seasonal buying patterns. ACRE recommends consulting a local real estate professional.
Industry perspective: The recent headlines in the real estate world have revolved around rising interest rates. As of Jan. 31, the interest rate on a 30-year fixed-rate mortgage was 4.38 percent. This is up from 4.18 percent on Jan. 10 and up from 4.08 percent on Dec. 6, 2017. The stock market has rebounded somewhat from its large selloff on Friday, Feb. 2, and Monday, Feb. 5, as investors adjust from an accommodating monetary policy to one with some inflation and higher interest rates. The recent market decline is a signal of a return to normalcy and higher debt costs. Rising interest rates, however, do not cause housing activity to come to a halt, in the same way that rising rates do not cause businesses to go into hibernation. In the spring of 2006, the Federal Reserve stopped raising interest rates after raising rates 16 times over a three-year period. The economy was performing well during this time (2004-2005) of rising interest rates. The Great Recession happened, interestingly enough, at a time when interest rate increases were halted.
Home ownership rates increased to 64.2 percent during 2017 after falling to a post-1965 low of 62.9 percent in 2016. Not surprisingly, home ownership rates peaked during 2005 at approximately 69 percent. Millennial home ownership rates are also on the rise as their employment situations continue to improve. Millennials, in fact, have been recently credited with an improvement in suburban housing markets as not all are city dwellers. This rise in home ownership was highlighted recently at the annual TrendLines 2018 program in Washington, D.C., with an analysis of Census Bureau housing data presented by Sage Policy Group, Delta Associates and Transwestern. The following excerpt is from the closing paragraph from the home ownership report, and is encouraging news for residential real estate markets across the nation:
“This year, the most common age in America will be 26 years old. There is also an abundance of 25- and 27-year-olds. All of these people are millennials, America’s largest and most educated generation. As more of this demographic block marches into their 30s, demand for ownership opportunities will rise. While there may be downturns that occasionally suspend these demographics, the next decade stands to emerge as a period of rapidly expanding home ownership and single-family homebuilding in America.”
Click here to generate more graphs from the Athens/Limestone January Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.
The Athens/Limestone County Residential Monthly Report is developed in conjunction with the Athens/Limestone County Association of Realtors to better serve North Alabama consumers.