Baldwin County condo sales slow significantly in April

Baldwin County condo sales slow significantly in April
The COVID-19 pandemic has softened current demand for coastal condominiums sharply. (iStock)

Sales: According to the Baldwin Realtors, April condominium sales decreased 51.8% year-over-year from 164 to 79 closed transactions. Going against seasonal trends, April sales decreased 47.7% from March. Sales are down 11.6%% year-to-date, and future demand is likely to soften because of the growing economic impact of the COVID-19 pandemic. Two more resources to review: Quarterly Report and Annual Report.

For all of Baldwin County’s condominium data, click here.

Inventory: Total condos listed for sale in April declined 1.5% year-over-year from 756 to 745 listings. Months of supply increased from 4.6 months to 9.4, reflecting a shift toward a buyer’s market in the area.

Pricing: The Baldwin County condo median sales price in April was $295,000, a decrease of 15.1% from one year ago and a decrease of 16.9% from March. This indicator can fluctuate from month to month because of the sampling size of data and seasonal buying patterns. Condos sold in April averaged 74 days on the market (DOM), selling 18 days faster than one year ago.

Forecast: April sales were 101 units, or 56.1%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 180 sales for the month, while actual sales were 79 units. ACRE forecast a total of 588 condo sales year-to-date, while there were 450 actual sales through April, a difference of 23.5%.

NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide fell 17.8% during April (seasonally adjusted annual rate). This represents the second month of declining sales activity caused by the pandemic, and the largest month-over-month drop since July 2010. Sales prices, however, remained somewhat stable. The nationwide median sales price for existing homes increased 7.4% year over year, extending the streak of year-over-year price gains to 98 straight months.

When addressing slowing economic activity, Lawrence Yun, NAR chief economist, said, “The economic lockdowns – occurring from mid-March through April in most states – have temporarily disrupted home sales. But the listings that are on the market are still attracting buyers and boosting home prices.”

Yun added that “Record-low mortgage rates are likely to remain in place for the rest of the year, and will be the key factor driving housing demand as state economies steadily reopen. Still, more listings and increased home construction will be needed to tame price growth.”

ACRE commentary: Closed sales data from April shows that total statewide residential sales declined 8.9% year-over-year. Statewide sales prices, however, increased 13.9% Y/Y in April, a sizable gain. Inventory (properties listed for sale) was tight before the pandemic, and inventory continues to be constrained as listings declined 16% from one year ago. As expected, sales activity for the foreseeable future when compared to the prior year is likely to decline because of the growing economic impact of the pandemic. For additional context, April sales are up 5.2% when compared to the month’s five-year average. Sales prices are likely to remain stable or decline slightly later in the year if demand continues to soften. Pricing dynamics driven by the law of supply and demand are always at work moving toward or away from market equilibrium (6 months of supply), where buyer and seller have equal bargaining power. In April months of supply was at 3.4.

Click here to view the entire monthly report.

The Baldwin County Condominium Monthly Report is developed in conjunction with the Baldwin Realtors to better serve Gulf Coast consumers.

Editor’s Note: All information in this article reflects data provided to the Alabama Center for Real Estate for April 1-30, 2020. Thus, the performance represented is historical and should not be used as an indicator of future results, particularly considering the upcoming impact of COVID-19 on the housing market.

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