Sales: According to the Valley Multiple Listing Service, there were 69 residential sales in the Gadsden area during February, a increase of 32.7 percent from one year ago. Existing single-family homes accounted for 97 percent of all residential sales, with new construction and condo sales accounting for 1 percent each. Two more resources to review: Quarterly Report and Annual Report.
Click here to view all of the Alabama Center for Real Estate’s Gadsden residential data.
Forecast: February sales were one unit or 1.4 percent below the Alabama Center for Real Estate’s monthly forecast. ACRE forecasts a total of 927 residential sales in the Gadsden area during 2018. There were 896 actual sales in 2017.
Supply: A total of 599 homes were listed for sale in the area during February, a increase of 7.9 percent from one year ago. Current inventory in the area is 0.6 percent below the five-year January average of 687 listings.
Demand: February residential sales increased 46.8 percent from January. This trend is consistent with historical data indicating that February residential sales on average (2013-2017) increase from January by 2.5 percent. Residential sales in the Gadsden area averaged 132 days on the market in February, up 16.8 percent from the 113 days on the market one year ago.
Seeking balance: The inventory for sale divided by the current monthly sales volume equals the number of months of supply. The market is considered to be in balance at approximately 6 months of supply. There were 8.6 months of supply in the Gadsden area during February, down from 10.7 months one year ago. In other words, at the February sales pace, it would take 8.6 months to absorb the current inventory for sale.
Pricing: The Gadsden-area median sales price in February was $126,000, an increase of 72.7 percent from one year ago. The median sales price increased 0.1 percent from the prior month. Historical data trends from 2013 through 2017 indicate that the median price in the area drops an average of 2.4 percent from January to February. 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 10-year treasury is a crucial indicator of economic expansion. As of March 1, 2018, the 10-year treasury stood at 2.88 percent, a slight increase from last month’s rate of 2.86 percent. Mortgage rates also experienced a slight increase recently as the current rate on a 30-year fixed-rate mortgage is 4.57 percent, up from 4.38 percent one month ago. As the economy continues to strengthen, people will have more money in their pockets with the intent to spend. This increase in spending will most likely create higher stock prices and lower bond prices. With this increase of confidence in the market, mortgage interest rates can be expected to increase.
The National Association of Home Builders (NAHB) produces economic analyses of the home-building industry based on government data. The Housing Market Index (HMI) depicts market conditions for the sale of new homes. The HMI ranges from 0 to 100; a rate greater than 50 represents good sales conditions.
The HMI in the South has stayed relatively steady in the past few months with a score of 73. However, the HMI is lower in some regions of the United States, such as the Northeast, which has a rate of 56. The West has a higher HMI of 77, and a better market for good housing conditions.
The Federal Housing Finance Agency uses the House Price Index (HPI) to measure the average price changes in repeat sales or refinancing on the same properties. The FHFA’s national HPI was up 6.7 percent from the previous year compared to Alabama, which has increased from the previous year by 5.6 percent. The HPI rose in all 49 states except for Mississippi.
Compared to the national housing market conditions, Alabama’s real estate market has been showing improvement. Although total residential sales in Alabama decreased 2.3 percent from January 2017, the statewide median sales price increased 2.3 percent from January 2017. Statewide, homes in Alabama are selling much more quickly than in recent years as the average days on the market decreased 19.6 percent from one year ago.
Click here to generate more graphs from the Gadsden February Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.