Alabama Coastal Real Estate Sales Continue Robust in February

Baldwin County & Alabama Coastal MLS*: Observations for the Month of February 2014

Sales dollars improved 16% in February to $98,810,427 from an unusually strong January of
$84,995,336. This is 45% above February last year at $67,838,269. (Sect A p.2). This is a good showing for February and the normally slower winter season. The 12 month moving average line of sales has continued to point up steadily for three years now. Inventories are trending down.

This year in concert with ACRE, The Alabama Center for Real Estate, we are doing projections for 2014 full year sales. We are using the ACRE provided data for the projections, which differs slightly from the data in this report because of the way the data is processed. The ACRE data starts in 2005. Keep in mind that the data has been impacted by both weather events and the BP oil spill. We use smoothing methods to adjust for these cases as well as the tax credit in 2009 which moved sales into the last quarter of 2009 and reduced sales in
2010. With all that, we are projecting unit sales for Baldwin county as increasing by 47.7% over 2013 levels. While it seems quite incredible, the first two months seem to indicate that the projections are at least directionally correct. See projections chart on the next page.

On a unit basis, sales of all houses were up 24% to 396 this month vs. last month at 320, which is up 13% from last year’s 351. In spite of the substantially improved sales climate, it is important to point out that the inventory of homes over $400,000 while improving from really bad levels, remains at over a 12 month supply.This suggests that even with the large projections outlined above sufficient inventory is available to satisfy demand.

Used Home sales improved 24% to 396 this month vs. 320 last month, which is 13% better than last year’s 351 (Sect A p.18). New Home sales were 34 this month vs 30 last month compared with 35 last year.

Increasing year over year sales of New Homes continues to point to a recovering market.
New listings for New homes decreased to 57 from 74 in January. Used homes New listings decreased to 741 from 487 in January with net inventory down.

The absolute number of Used Active homes on the market, which had a slight peak mid­summer of ‘09, has once again been improving. In February, there were 3,404 Active Used homes, a reduction from 3,627 in January. The New home market, which peaked in February 2006 at 2,144 Active, now sits at 369.

The Absorption rate for New homes was 8 months of inventory in February vs. 9 in January. The Absorption rate for Used homes was 7 months of inventory for February vs. 8 in January. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in February 2008 to 7 months this February. As I observe above though, the inventory of homes in the higher price range remains high.

Average sales price for all homes has been improving modestly for the past year. For New units, prices decreased to $253,705 from $306,058 last month. (Sect A p.14). Average Used home prices decreased to $249,128 from $261,426 in January. The price trend is up for the year. Average Days On Market for New Sold properties in February was 216 this month vs. 179 last month. Days On Market for Used was 156 this month vs. 127 last month.

TWB 3/9/2014


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