November Alabama Coastal Real Estate Sales Slow Slightly

Baldwin County & Alabama Coastal MLS*: Observations for the Month of November 2015

Sales dollars decreased 24% in November to $90,943,509 from October $120,159,190. This is 5% under November last year at $95,902,473. (Sect A p.2). This is the 1st month in the last year that sales dollars are slightly lower than the last year. I imagine that late sales reported next month will raise the total above last year’s numbers. Nonetheless, the month was slower than expected. The 12 month moving average line of sales, which had continued to point up steadily for three years, has now gotten a healthy upwards tilt. The 12 month average is close to the record levels achieved in 2006 with more homes sold, but at lower average prices. Lack of new construction now seems to be depressing sales somewhat. Inventories are trending down.

Sales in most price categories show consistent improvement. Inventories are improving, but remain high at over a year for anything over $500,000. This month the $400,000-$500,000 inventory dipped to 10 months.

In concert with ACRE, The Alabama Center for Real Estate, we have projected expectations for 2015. We use the ACRE provided data for the projections, which differs slightly from the data in this report. The projection for 2015 located here expected a unit increase of 17% over 2014 actual. Through October cumulative sales are running 8% ahead of the projection. For the month of October sales were 5% above the projection.

On a unit basis, sales of all houses were off 19% at 388 this month vs. last month at 481, which is 10% below last year’s healthy level of 429. There is still substantial inventory (used) available to satisfy demand.

Used Home sales decreased 17% to 345 this month vs. 414 last month, which is off 6% from last year’s 368 (Sect A p.18). New Home sales were 43 this month vs 67 last month and compared with 61 last year.

New listings for New homes increased to 133 from 117 in October. Used homes New listings decreased to 518 from 640 in October 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 November, there were 3,261 Active Used homes, a reduction from 3,755 in October and a new multi year low level. The New home market, which peaked in November 2006 at 2,144 Active, now sits at 508.

The Absorption rate for New homes was 7 months of inventory in November vs. 7 in October. The Absorption rate for Used homes was 7 months of inventory in November vs. 8 in October. Over the last four years the drop in months of inventory for Used homes has been steady and impressive from 25 months plus in October 2008 to 7 months this November. The inventory of homes in the upper price range remains high with homes over $500,000 at over a year’s supply, but even here we are seeing improvement. I would expect to see construction begin to pick-up in the under $400,000 range, but so far have not seen it.

Average sales price for all homes has been improving modestly for the past year. For New units, prices decreased to  $227,591 from $293,618 last month. (Sect A p.14). Average Used home prices decreased to $235,238 from $242,722 in October. The price trend is up for the year. Average Days On Market for New Sold properties in November was 170 vs last month of 177. Days On Market for Used was 149 compared to last month 143.

TWB 12/13/2015


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