Sales: There were 5,353 residential sales in Alabama during March, an increase of 2.5 percent from one year ago. Current sales results are 25.9 percent above the five-year monthly average of 4,250 transactions. Two more resources to review: Quarterly Report and Annual Report.
Forecast: March sales were 6.9 percent or 345 units above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 12,311 residential sales statewide year-to-date, while there were 12,497 actual sales through March.
Supply: The statewide housing inventory during March was 24,127 listings, a decrease of 8.9 percent from March 2017 and 41.7 percent below the 10-year March peak in 2008, when 41,398 units were listed for sale. March inventory increased from February by 2.9 percent. This is consistent with historical data trends indicating that March inventory on average (2013-2017) increases 2.9 percent from February.
Demand: March residential sales increased 40.1 percent from February. This rise in sales is consistent with historical data trends indicating that March sales on average (2013-2017) increase from February by 30.5 percent. The average number of days on the market until a listing sold was 152 days, up 14.5 percent from one year ago, when listings across the state averaged 133 days on the market.
Pricing: The statewide median sales price during March was $154,752, an increase of 10.4 percent from one year ago. The March median sales price increased 3.5 percent from February. This direction is consistent with historical data averages (2013-2017) indicating that the March median sales price on average increases 4.2 percent from February. During March, 84 percent of Alabama markets experienced price gains from one year ago. This indicator can fluctuate from month to month because of sampling size of data and seasonal buying patterns.
Seeking balance: The metro markets in Alabama representing 70 percent of all sales shifted away from equilibrium (balance between supply and demand) with 3.8 months of housing supply during March. Outside the metro markets, Alabama’s midsize metro areas are reporting 4.6 months of housing supply, while non-metro areas are reporting 6.9 months of supply. There have been significant improvements from inventory peaks experienced during the recession.
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 Alabama March Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.