Over 550 Real Estate Professionals responded to the fourth quarter survey which was conducted during the last two weeks of September. The survey, conducted by the Alabama Center For Real Estate (PDF available there) now has the largest participation of any Real Estate Survey and provides important market insights for regions in Alabama. The survey projects expectations for the fourth quarter of 2010.
The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.
The overall (residential & commercial combined) confidence level was not significantly different from the survey results for the last quarter, although the overall score has dropped each quarter. The statewide overall score dropped from 44 to 43 (see red line above), indicating a continued deterioration in expectations from the previous quarter. The largest change was on the coast (see blue line above) where the overall score jumped from 36 to 42 which still indicates declining markets but not nearly as severe as last quarter when the oil spill was unchecked.
The expectations for the nation are ranked at 43, indicating that respondents expect real estate conditions nationally to continue to deteriorate modestly.
Expectations for Alabama at 49 are more positive than the national outlook at 43 which is even with last quarter. This score indicates “modestly unfavorable expectations” for the overall Alabama Real Estate market.
Commercial market participants were very slightly more positive in their outlook this quarter than last with results up 1 point. Rural residential market participants were considerably more optimistic about financing availability. The rating for credit availability jumped by 10 points, to 40, a level which indicates contraction but not nearly as unfavorable as last quarter.
North Alabama continues to have the highest overall scores, but at the same time continues to drift downward. The total score of 45 indicates a consensus for slight deterioration in coming quarter. The outlook for the Alabama market remains comparatively high at 52, but this is a drop of 4 from the prior quarter, 56. Market participants are more pessimistic on the sales outlook for the 3rd quarter than they were for the 2nd at 52 this quarter vs. 53 last. This is still above the neutral rating of 50. Inventory is expected to increase to 43, a deterioration of 5 from last quarter.
Where we do not have sufficient respondents to provide a good sample, such as the “commercial categories”, we indicate that with NA.
North Central Region
The North Central Region is slightly more unfavorable than the North region of the state. The overall score decreased from 45 last quarter to 43 this quarter. The rural respondents see the Residential market getting worse but at a slower rate. The inventory score increased by ten points indicating an almost neutral, at 48. Residential pricing score is at 36 indicating continuing pressure for the coming quarter. Additionally, the North Central residential participants see credit availability as being tight at 41, although commercial participants are almost neutral at 49.
South Central Region
The South Central Region participants outlook remains unfavorable regarding the national outlook. While there was a decline in the national outlook it now sits at 41 down 5 points. There was continued improvement in credit expectations in the rural areas with an improvement of 9 points, but still unfavorable at 40.
The Southern Region had the most dramatic improvement in market outlook in most measures, due in large part to capping of the oil spill. The overall statistics showed the largest improvements of any area of +6 for the quarter to 42, still unfavorable, but improved. The respondents rated the national outlook at 45, but they ranked their own outlook 46, up 11 from last quarter. Sales expectations are up to 49, a 15 point improvement from last quarter.
The ACRE Leadership Council determined the need for a statewide industry confidence index and this was adopted as the Council’s first initiative. Tom Brander, Council Member, was selected by the Council and Grayson Glaze, ACRE Executive Director, to spearhead and work with the Center to conduct and produce its Alabama Real Estate Confidence Index (ARECI). The Council appreciates everyone who participated.