Click here to view or print the entire monthly report compliments of the ACRE Corporate Cabinet.

Sales: According to the Multiple Listing Service of the Shoals Area Association of Realtors, there were 115 residential sales in the Shoals area during February, down 5 percent from the same month in 2017. The 10-year peak for February sales was reached in 2017 with 121 residential sales for the month, while the February trough was in 2010 with 64 total sales. Two more resources to review: Quarterly Report and the Annual Report.

For all Shoals-area real estate data, click here.

Forecast: February’s 115 home sales were one unit or 0.9 percent below the Alabama Center for Real Estate’s monthly forecast. ACRE forecasts a total of 1,688 residential sales in the Shoals area during 2018; there were 1,723 actual sales during 2017.

Supply: Shoals area housing inventory totaled 883 units, a decrease of 8.4 percent from one year ago. February’s inventory has declined 23.2 percent from the 10-year peak of 1,149 listings in February 2010. February inventory increased 1.1 percent from the previous month. This trend contrasts with historical data indicating that February inventory on average (2013-17) decreases 1.1 percent from January.

Demand: February sales in the Shoals area increased 9.5 percent from the prior month’s total of 105 sales. This is consistent with historical data from 2013-17 indicating that February sales on average increase 16.1 percent from January. Homes selling in the area during February averaged 88 days on the market, selling nine days faster than one year ago. The five-year days-on-market average is 126 days for the month of February.

Seeking balance: The inventory for sale divided by the current monthly sales volume equals the number of months of housing supply. The market equilibrium, or balance between supply and demand, is considered by most real estate professionals to be approximately 6 months. The Shoals area has 7.7 months of housing supply, down from 8 months one year ago. In other words, at the February sales pace, it would take 7.7 months to absorb the current inventory for sale.

Pricing: The Shoals area median sales price in February was $139,500, a 4.9 percent increase from February 2017’s median sales price of $133,000. The median sales price was up 26.5 percent from the prior month. This trend goes against historical data trends that indicate the February median sales price on average (2013-17) decreases 5.2 percent from January. Pricing can fluctuate from month to month as the sample size of data (closed transactions) is subject to seasonal buying patterns. ACRE recommends contacting a local real estate professional for additional market pricing information.

Industry perspective: The 10-year treasury is a crucial indicator of economic expansion. As of March 1, 2018, the 10-year treasury stood at 2.88 percent, a slight increase from last month’s rate of 2.86 percent. Mortgage rates also experienced a slight increase recently as the current rate on a 30-year fixed-rate mortgage is 4.57 percent, up from 4.38 percent one month ago. As the economy continues to strengthen, people will have more money in their pockets with the intent to spend. This increase in spending will most likely create higher stock prices and lower bond prices. With this increase of confidence in the market, mortgage interest rates can be expected to increase.

The National Association of Home Builders (NAHB) produces economic analyses of the home-building industry based on government data. The Housing Market Index (HMI) depicts market conditions for the sale of new homes. The HMI ranges from 0 to 100; a rate greater than 50 represents good sales conditions.

The HMI in the South has stayed relatively steady in the past few months with a score of 73. However, the HMI is lower in some regions of the United States, such as the Northeast, which has a rate of 56. The West has a higher HMI of 77, and a better market for good housing conditions.

The Federal Housing Finance Agency uses the House Price Index (HPI) to measure the average price changes in repeat sales or refinancing on the same properties. The FHFA’s national HPI was up 6.7 percent from the previous year compared to Alabama, which has increased from the previous year by 5.6 percent. The HPI rose in all 49 states except for Mississippi.

Compared to the national housing market conditions, Alabama’s real estate market has been showing improvement. Although total residential sales in Alabama decreased 2.3 percent from January 2017, the statewide median sales price increased 2.3 percent from January 2017. Statewide, homes in Alabama are selling much more quickly than in recent years as the average days on the market decreased 19.6 percent from one year ago.

Click here to generate more graphs from the Shoals Area February Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply. 

The Shoals Area Residential Monthly Report is developed in conjunction with the Shoals Area Association of Realtors to better serve its area consumers.