Sales: According to the Gulf Coast Multiple Listing Service, Mobile-area residential sales totaled 355 units in October, an increase of 17.5 percent from the same period last year (302 units). Year-to-date sales through October were up 14.9 percent from 2014. Two more resources to review: Quarterly Report and Annual Report.
Forecast: October sales were 20 units, or 5.9 percent, above our monthly forecast. The Alabama Center for Real Estate’s (ACRE) year-to-date sales forecast through October projected 3,512 closed transactions, while the actual sales were 3,675 units, an increase of 4.6 percent.
Supply: The Mobile-area housing inventory in October was 2,397 units, a decrease of 11.9 percent from October 2014. Inventory has now declined 31.2 percent from the October peak (3,485 units) reached in 2009. There was 6.8 months of housing supply in October 2015 (6.0 months represents a balanced market for this time of year) versus 9.0 months of supply in October 2014, a favorable decline of 25 percent. The market continues to move toward equilibrium, where buyer and seller have equal bargaining power, which is encouraging news.
October inventory in the Mobile area also decreased 1.1 percent from the prior month. As seller confidence in the housing market continues to gradually strengthen, more listings for sale can be anticipated in the future, including more new home construction. This is important because the “quality” of inventory has become a market impediment, according to recent surveys.
Demand: October sales decreased 2.2 percent from the prior month. This direction is consistent with historical data, which indicate sales, on average (2010-14), decrease from September by 6.2 percent.
Existing single-family home sales accounted for 90 percent (up from 89 percent in October 2014) of total sales, while 7 percent (down from 10 percent in October 2014) were new home sales and 3 percent (up from 1 percent in October 2014) were condo transactions.
Pricing: The Mobile area median sales price in October was $122,000, up 5 percent from last October. The October median sales price decreased 2.8 percent when compared to the prior month. This month-over-month direction is consistent with historical data (2010-14) indicating, on average, October median sales prices increase from September by 8 percent. Pricing can fluctuate from month to month as the sample size of data (closed transactions) is subject to seasonal buying patterns. ACRE highly recommends consulting with a local real estate professional to discuss prices, which can and will vary from neighborhood to neighborhood. The 2014 Mobile-area median sales price improved 5.7 percent from 2013.
Industry Perspective: “Despite recent headwinds, which likely will slow economic growth compared to the first half of 2015, we see positive trends for consumer spending and housing heading into the fourth quarter,” said Fannie Mae Chief Economist Doug Duncan. “Strong home price gains should help drive an increase in household net worth again in the third quarter, and, combined with low gasoline prices and mortgage rates, should support strong consumer spending throughout the rest of the year.” For full report click here.
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]rhouse.ua.edu. The Mobile Area Residential Monthly Report is work product developed in conjunction with the Mobile Area Association of Realtors to better serve gulf coast 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 an area 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.