Alabama Coastal Real Estate Cools Off In June

Baldwin County & Alabama Coastal MLS*: Observations for the Month of June 2013

Sales dollars declined 16% in June to $113,046,228 from May’s $133,939,944. This is very slightly below June last year at $113,239,607. (Sect A p.2). A reduction in June sales is somewhat unusual and may be early evidence of a slight cooling in an otherwise improving market. The 12 month moving average line of sales has continued to point up steadily for three years now. Inventories are steadily trending down.

On a unit basis, sales of all houses were off 16% at 482 this month vs. last month at 575, which is up 2% from last year’s 473. In spite of the substantially improved sales climate, it is important to point out that the inventories of homes over $300,000 remains at over a 12 month supply.

Used Home sales declined 19% to 422 this month vs. 518 last month, which is down 2% from last year’s 429 (Sect A p.18). New Home sales were 60 this month vs 57 last month compared with 44 last year. Increasing sales of New Homes is indicative of a recovering market.

New listings for New homes increased to 94 from 63 in May. Used homes New listings decreased to 772 from 791 in May with net inventory down.

The absolute number of Used Active homes on the market, which had a slight peak mid-summer of ‘09, has once again been improving. In June, there were 3,597 Active Used homes, a reduction from 3,910 in May. The New home market, which peaked in June 2006 at 2,144 Active, now sits at 363.

The Absorption rate for New homes was 9 months of inventory for June vs. 10 in May. The Absorption rate for Used homes was 10 months of inventory for June vs. 11 in May. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in June 2008 to 10 months this June. As I observe above though, the inventory for higher priced homes remains high.

Average sales price for all homes have been improving modestly for the past year. For New units, prices increased to $259,851 from $222,465 last month. (Sect A p.14). Average Used home prices decreased to $230,936 from $234,092 in May. The price trend is up for the year.

Average Days On Market for New Sold properties in June was 190 this month vs. 201 last month. Days On Market for Used was 193 this month vs. 168 last month.

We see improvement in the second home market, which is needed for the coastal area to gain strength. While there is still a lot of inventory particularly in the upper price ranges, sales are continuing to improve. I think the situation on the coast has turned quite positive.

TWB 7/14/2013


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