Sales: There were 58 residential sales in the Lake Martin area during March, down 14.7 percent from 68 total sales in the area one year ago. March sales were 16.9 percent above the five-year average of 50 sales. Two more resources to review: Quarterly Report and the Annual Report.
For all of Lake Martin’s area housing data, click here.
Forecast: March sales were five units or 7.9 percent below the Alabama Center for Real Estate’s monthly forecast. Through the combined months of January, February and March, 134 total residential sales have been recorded, equal to expectations. ACRE’s sales forecast projects a total of 684 sales in the area during 2018; there were 665 actual sales during 2017.
Supply: The Lake Martin area housing inventory in March was 408 listings, a decrease of 0.7 percent from a year earlier. March inventory increased by 11.2 percent from the prior month. This trend is consistent with historical data from 2013-17 indicating that March inventory on average increases from February by 8.6 percent.
Demand: Residential sales increased by 18 units or 45 percent from the prior month. This trend is consistent with historical data from 2013-17 that indicates March sales on average increase from February by 90.3 percent. Listings selling in the Lake Martin area during March averaged 127 days on the market before selling. This represents an improvement of 17.5 percent from one year ago, when the average was 154 days.
Seeking balance: The inventory for sale divided by the current monthly sales volume equals the number of months of supply. Most real estate professionals consider the market to be in balance at approximately 6 months of supply. There were 7 months of housing supply in March, down from 9.2 months in February and up from 6 months of supply one year ago.
Pricing: The Lake Martin area median sales price in March was $214,000, a decrease of 2.7 percent from one year ago. The current median price in the area is 3.1 percent above the five-year average for March sales. Pricing can and will fluctuate from month to month because of changing composition of actual sales (lakefront vs. non-lakefront) and the sample size of data (closed transactions) being subject to seasonal buying patterns. ACRE recommends contacting a local real estate professional for additional market pricing information.
Industry perspective: Interest rates are likely to increase throughout 2018. The Federal Reserve’s Federal Open Market Committee (FOMC) met on March 21 and approved a quarter-point rate hike. As of April 5, the 10-Year Treasury stood at 2.83 percent, down slightly from 2.88 percent one month ago. Although daily yield curve rates have decreased slightly in the past month, many analysts are projecting that the 10-year Treasury will pass 3 percent in the months to come. According to Wells Fargo, the current interest rate on a 30-year fixed-rate mortgage is 4.58 percent (annual percentage rate).
As the overall economy continues to expand, it is not surprising to see growth in Alabama’s residential new construction market. February sales of newly constructed homes grew 22 percent month-over-month and 14 percent year-over-year. Statewide*, there were 507 new construction sales in February, up from 416 total sales in January and up from 445 total sales in February 2017. Year-to-date, new construction sales are up 6 percent from 2017.
February new construction sales in select Alabama markets
- Baldwin County – 100
- Birmingham Metro Area – 125
- Huntsville Metro Area – 112
- Lee County – 36
- Mobile Metro Area – 17
- Montgomery Metro Area – 35
- Tuscaloosa County – 15
New construction building permits and housing starts data are indicators of larger economic conditions. Generally speaking, the housing market is one of the first sectors to expand or contract during times of growth or decline. According to the U.S. Census Bureau, 1,225 building permits for new construction were issued in Alabama during February. Building permits increased 1.1 percent from January, when 1,212 permits were issued, and increased 10.1 percent from February 2017, when 1,113 permits were issued. ACRE projected 1,219 housing starts in Alabama during February. Housing starts decreased 2.9 percent from January (1,256) and increased 13 percent from February 2017 (1,079). Year-over-year increases in both building permits and projected housing starts are encouraging news, as they hint toward continued overall economic growth during the second quarter of 2018.
*ACRE receives new construction sales data from the following counties/areas: Baldwin County, Birmingham Metro Area, Calhoun County, Huntsville Metro Area, Lee County, Mobile Metro Area, Montgomery Metro Area, Tuscaloosa County and the Wiregrass Region. Combined, these counties/areas represent +/- 70 percent of Alabama’s total population.
Click here to generate more graphs from the Lake Martin area March Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.