Sales: Alabama home sales totaling 4,035 units during December were an increase of 6 percent from the same month a year ago. Annual home sales for the state through December were up 7.6 percent compared to 2015. Two more resources to review: Quarterly Report and Annual Report.
Forecast: December sales were 11 percent or 422 units above the Alabama Center for Real Estate‘s (ACRE) monthly forecast. ACRE’s sales forecast for 2016 through December projected 49,032 closed transactions, while the actual sales were 53,752 units, a favorable difference of 9.6 percent.
Supply: The statewide housing inventory during December was 26,003 units, a decrease of 10 percent from December 2015 and 35 percent below the December peak in 2007 (39,706 units). There were 6.4 months of housing supply in December (6 months is considered equilibrium), which represents a favorable drop of 15 percent from December 2015 (7.6 months).
December inventory decreased from November by 13 percent. This direction is consistent with historical data that indicate December inventory on average (2011-15) decreases from November by 6.1 percent.
Demand: December residential sales increased 1.5 percent from November. This direction is consistent with historical statewide data indicating that December sales on average (2011-15) increase from November by 11.6 percent. The average days on market until a listing sold was 148 days, up 4.3 percent from last year. According to the National Association of Realtors November Existing Home Sales Report, December home sales were 0.7 percent higher than home sales during the same month in 2015. See how Alabama compares with the U.S. residential market by clicking here.
Pricing: The December median sales price increased 0.6 percent from the same period last year to $134,525. During December, 48 percent of local markets experienced price gains from December 2015. This indicator can fluctuate from month to month due to sampling size of data and seasonal buying patterns. The December median sales price decreased 7.2 percent from November. This direction contrasts with historical data averages (2011-15) reflecting that the December median sales price increases 5.5 percent from November.
Seeking balance: The metro markets in Alabama representing 70 percent of all sales continued to trend toward greater seller bargaining power with 5.8 months of supply. Outside the metro markets, Alabama’s midsized markets are reporting 6.8 months of supply, while rural areas are reporting 9.5 months of supply. There have been significant improvements from inventory peaks experienced during the recession. The supply of quality inventory in the past has affected sales, according to some boots-on-the-ground professionals.
Industry perspective: “The tenor of our forecast effectively remains unchanged: signs of cautious consumers this quarter, rising interest rates, the renewed increase in the U.S. dollar to a 14-year high, and heightened uncertainty in the political sphere suggest conservatism in our outlook,” said Fannie Mae Chief Economist Doug Duncan. “While we are encouraged that confidence is rising across investors, consumers, businesses, economists and homebuilders, much of it appears to be in anticipation that the forthcoming Administration and the new Congress will enact fiscal policies and deregulation that will help spur growth. While we believe that some pro-growth policies could be adopted next year, it would take time for them to benefit the economy, barring any offsetting initiatives such as more restrictive trade policies.”
Click here to generate more graphs from the Alabama December Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.