Sales: According to the Tuscaloosa MLS, Tuscaloosa area residential sales totaled 190 units in September, an increase in sales growth of 16 percent or 26 units above the same period last year. Year-to-date sales through September are up 10.2 percent from 2014. Two more resources to review market: Quarterly Report and Annual Report
Forecast: September results were 30 units or 18 percent below our monthly forecast. ACRE’s year-to-date sales forecast through September projected 1,651 closed transactions while the actual sales were 1,648 units, a cumulative variance of -.18 percent.
Supply: Tuscaloosa September housing inventory totaled 1,346 units, a decrease of 9.7 percent from September 2014. September inventory remained unchanged from the prior month. Historical data indicates that September inventory on average (’10-’14) decreases from the month of August by 1.8 percent. Inventory has now declined 31 percent from the month of September peak (1,960 units) reached in 2007.
Seeking balance: The inventory-to-sales ratio declined 22 percent year-over-year in September to 7.1 months. Restated, at the September sales pace, it would take 7.1 months to absorb the current inventory for sale. The market equilibrium (balance between supply and demand on non-seasonally adjusted basis) is considered to be approximately 6.0 months during month of September. The encouraging news remains that the inventory-to-sales ratio has now declined 60.2 percent from the month of September peak (17.8 months) reached in 2010.
Demand: September residential sales were 4.4 percent above the prior month. The decrease contrasts with seasonal buying patterns and historical data indicating that September sales on average (’10-’14) decrease from the month of August by 16.8 percent. Existing single family home sales accounted for 81 percent (down from 83 percent in September ’14) of total sales while 13 percent (down 1 percent from September ’14) were new home sales and 6 percent (up from 5 percent in September ’14) were condo buyers.
Pricing: The Tuscaloosa median sales price in September was $161,250, representing an increase of 4;1 percent when compared to September 2014. The median sales price dipped 3.9 percent from August’s price. This month-over-month price direction is consistent with historical data indicating that the September median sales price on average (’10-’14) decreases from the month of August by 3 percent. It should also be noted that differing sample size (# of residential sales of comparative months) can contribute to statistical volatility including pricing. The Center highly recommends consulting with a real estate professional to discuss pricing as it can and will vary from neighborhood to neighborhood.
Industry Perspective: “Our forecast for the year is largely unchanged despite recent market volatility. Fundamentals are positive, suggesting potential for some improvement in the fourth quarter,” said Fannie Mae Chief Economist Doug Duncan. “While core personal consumption expenditures experienced their weakest gain in more than four years in July, real consumer spending rebounded during the month and August auto sales were stronger than they have been in a decade. Consumers may get an added boost during the year from subdued inflation given the stronger dollar and low oil prices. Overall, we anticipate economic growth of 2.4 percent for 2015, up slightly from 2.1 percent in the prior forecast. Consumer and government spending as well as nonresidential and residential investment are expected to contribute to growth while net exports and inventory investment will likely pose headwinds.” For full report click HERE.
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Bryan Davis is the Research/Media Coordinator for the Alabama Center for Real Estate housed within the Culverhouse College of Commerce at the University of Alabama. He can be reached at 205-348-5416 or at [email protected]
The Tuscaloosa Residential Monthly Report work product developed in conjunction with the Tuscaloosa Association of REALTORS to better serve West Alabama consumers. The ACRE monthly report is provided to illustrate the “general” market direction & trends when comparing prior periods with the most current residential data available. Real estate is local and statistics will fluctuate between areas within a city including subdivisions, and ACRE recommends that you consult a local real estate professional for “specific” advice associated with your market. The Alabama Center for Real Estate‘s core purpose is to advance the real estate industry in Alabama by providing relevant resources in the areas of research, education and outreach. Join the Center mailing list HERE.