Sales: According to the Baldwin County Association of Realtors Multiple Listing Service, Baldwin County condo sales, which include condos along the Gulf Coast, totaled 101 units during January, a 16.5 percent decrease from one year ago. Current sales results are 10.3 percent above the five-year January average of 92 condo sales. Two more resources to view: Quarterly Report and Annual Report.
For all of Baldwin County’s condo sales data, click here.
Forecast: January sales were 10 units or 11 percent above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE forecasts a total of 1,556 condo sales in Baldwin County during 2018. There were 1,781 actual condo sales in 2017.
Supply: Baldwin County condo inventory totaled 713 units in January, an increase of 2.1 percent from one year ago. Condo inventory was up 6.7 percent from the prior month. This recent trend goes against historical data from 2013-17 indicating that January inventory on average decreases 0.8 percent from December. Condo inventory during January peaked in 2008 at 2,385 units, and the current inventory is down 70.1 percent from that peak.
Demand: Baldwin County condo sales decreased 10.6 percent from the previous month. This is consistent with historical data indicating that January condo sales on average (2013-17) decrease from December by 23.8 percent. Condos selling in January averaged 93 days on the market. This is a significant improvement from one year ago, when condos averaged 146 days on the market.
Seeking balance: The inventory of condos for sale divided by the current monthly sales volume equals the number of months of housing supply. The market is considered to be in balance at approximately 6 months of supply. During January the area had 7.1 months of condo supply, up from 5.9 months of supply last month and up from 5.8 months one year ago.
Pricing: The Baldwin County condo median sales price in January was $310,000, up 6.9 percent from one year ago. The median sales price decreased 8.6 percent from the prior month. This is consistent with historical data trends from 2013-17 indicating that the January median sales price on average decreases 2 percent from December. ACRE highly recommends consulting with a real estate professional to discuss pricing, as it 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.”
The Baldwin County Condo Monthly Report is developed in conjunction with the Baldwin County Association of Realtors to better serve both local and worldwide consumers interested in the beaches along Alabama’s Gulf Coast.