Sales: Calhoun County residential sales totaled 108 units during January, up 5.9 percent from the same month last year. In January, 98 percent of residential sales in the area were existing single-family homes, while 1 percent were condos and 1 percent were newly constructed homes. Two more resources to review: Quarterly Report and Annual Report.
For all of Calhoun County’s real estate data, click here.
Forecast: January sales were 8 units or 8 percent above the Alabama Center for Real Estate’s (ACRE) monthly forecast of 100 closed transactions in the area. ACRE’s forecast for the Anniston area calls for 1,669 total transactions in 2018. Actual sales during 2017 totaled 1,646 units, which was 12.4 percent above ACRE’s forecast of 1,465 total sales.
Supply: Calhoun County housing inventory totaled 764 units, a decrease of 18 percent from January 2017. Inventory decreased 26.9 percent from the prior month. Historical data indicate that January inventory on average (2013-2017) increases by 2 percent from the month of December.
Demand: January residential sales decreased 17.6 percent from December. Historical data from Calhoun County indicate that January sales on average (2013-2017) decrease from December by 12.8 percent. The average number of days on the market until a listing sold was 93 days, down 17 percent from the previous January. Homes sold at a quicker pace during January, as the five-year average for the month is 122 days on the market.
Seeking balance: The inventory for sale divided by the current monthly sales volume equals the number of months of housing supply. Most real estate professionals consider the market to be in balance at approximately 6 months. Calhoun County had 7.1 months of housing supply in January, a decrease of 22.6 percent from the 9.1 months of supply during the same month last year. Calhoun County’s inventory-to-sales ratio is 1.1 months above equilibrium, indicating that buyers in the area have slightly elevated bargaining power.
Pricing: The Calhoun County median sales price in January was $117,450, an increase of 2.6 percent from January 2017’s median sales price of $114,450. January’s median price was 11.8 percent above the five-year monthly average of $105,070. Pricing can fluctuate from month to month as the sample size of data (closed transactions) is subject to seasonal buying patterns. ACRE recommends consulting with a local real estate professional to discuss prices, as they will vary from neighborhood to neighborhood.
Industry perspective: The recent headlines in the real estate world have revolved around rising interest rates. As of Jan. 31, the interest rate on a 30-year fixed-rate mortgage was 4.38 percent. This is up from 4.18 percent on Jan. 10 and up from 4.08 percent on Dec. 6, 2017. The stock market has rebounded somewhat from its large selloff on Friday, Feb. 2, and Monday, Feb. 5, as investors adjust from an accommodating monetary policy to one with some inflation and higher interest rates. The recent market decline is a signal of a return to normalcy and higher debt costs. Rising interest rates, however, do not cause housing activity to come to a halt, in the same way that rising rates do not cause businesses to go into hibernation. In the spring of 2006, the Federal Reserve stopped raising interest rates after raising rates 16 times over a three-year period. The economy was performing well during this time (2004-2005) of rising interest rates. The Great Recession happened, interestingly enough, at a time when interest rate increases were halted.
Home ownership rates increased to 64.2 percent during 2017 after falling to a post-1965 low of 62.9 percent in 2016. Not surprisingly, home ownership rates peaked during 2005 at approximately 69 percent. Millennial home ownership rates are also on the rise as their employment situations continue to improve. Millennials, in fact, have been recently credited with an improvement in suburban housing markets as not all are city dwellers. This rise in home ownership was highlighted recently at the annual TrendLines 2018 program in Washington, D.C., with an analysis of Census Bureau housing data presented by Sage Policy Group, Delta Associates and Transwestern. The following excerpt is from the closing paragraph from the home ownership report, and is encouraging news for residential real estate markets across the nation:
“This year, the most common age in America will be 26 years old. There is also an abundance of 25- and 27-year-olds. All of these people are millennials, America’s largest and most educated generation. As more of this demographic block marches into their 30s, demand for ownership opportunities will rise. While there may be downturns that occasionally suspend these demographics, the next decade stands to emerge as a period of rapidly expanding home ownership and single-family homebuilding in America.”
Click here to generate more graphs from Calhoun County’s January Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.