The survey projects expectations for the 2nd quarter of 2011. The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.
Spring is on the way and the Alabama real estate community is optimistic about sales. The sales index is at it highest level since we started the survey a bit over a year ago. While much of this is seasonal, sales expectations for the upcoming 2nd quarter was 60 compared to last years’ at 56. It is a welcome sign of a market showing improvement. The “overall” index (which includes National expectations) remains below the 50 mark at 49, which indicates slightly unfavorable expectations, the State score at 57 and local sales score of 60 were both improved from last quarter so a real trend seems to have begun. Inventory and prices are still expected to be troubled but the expectation there is also improving, every level is better than last year at this time. The only index to show modest decline on a quarter to quarter basis is the availability of credit at 41 this quarter vs. 42 last quarter.
Expectations for Alabama (green in the above chart) are up from 55 last quarter to 57 this quarter. This score indicates favorable expectations for the overall Alabama Real Estate market. The overall (residential & commercial combined) confidence level was improved from the survey results for the last quarter. The statewide overall score improved modestly from 47 to 49 (see red line above), in short, while sales are expected to improve, the inventory, price and credit indications are still below the 50 mark. Sales will be up, but sellers are likely to be frustrated by competition and pricing and some buyers will continue to have problems getting financing.
The coastal areas continued on an upward trend (see blue line below). The coastal overall score jumped from 48 to 49 which indicates a neutral market view. Sales expectations however were up to 61 while Alabama economic conditions are scored at 57, a level indicating improvement.
The expectations for the state (total (red) in the chart above) are ranked at 49 up from 47 last quarter, indicating that respondents expect real estate conditions statewide to remain about the same as in the prior quarter. This reflects the tension between buyers and sellers.
Perhaps more important than the absolute number is the fairly dramatic change in direction expressed across each of the measured questions with all measures showing improvement for two quarters now, and a reversal of the downtrend in evidence from when the survey began in the 1st quarter of 2010. All of the point values can be seen in the table at the end of this report.
Commercial market participants were slightly more positive in their outlook this quarter than last at 51 this quarter vs. 50 last for overall and up to 58 for sales expectations. Price expectations remain weak, at 44 indicating continued pricing pressure in all markets. The rating for credit availability remains poor, at 47 down 3 points from last quarter, a level which indicates expected contraction in credit availability.
North Alabama continues to have strong scores relative to the rest of the state. This quarter the expectations improved quite a bit. The total score of 53 indicates a consensus for national improvement in coming quarter. The outlook for the Alabama market is comparatively high at 64. Market participants are more positive on the sales outlook for the 2nd quarter than they were for the 1st at 64 this quarter vs. 55 last. Inventory is expected to remain with a score of 51. The price score is approaching neutral at 47.
North Central Region
The North Central Region along with the South Central Region showed the least change of the states’ four geographic areas. The sales score improved 2 points to 58. Inventory, pricing and credit are all still below the 50 mark at 45, 39 and 41 respectively.
South Central Region
The South Central Region participants outlook for sales improved 3 points to 58.
The Southern Region continues to improve in its sales score up 5 points to 61 close to the Northern region as the most optimistic sales area.
About the Alabama Real Estate Confidence Index and Survey:
Close to 700 professionals responded to the 2nd quarter 2011 survey which was conducted during the month of March 2011. The survey, conducted by the Alabama Center For Real Estate now has the largest participation of any Real Estate Survey it provides important market insights.
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.