November sales were 13.7 percent or 523 units above the Alabama Center for Real Estate‘s (ACRE) monthly forecast. ACRE’s 2017 sales forecast through November projected 49,528 closed transactions, while the actual sales were 53,177 units.
The statewide housing inventory during November was 24,990, a decrease of 9.4 percent from November 2016 and 40.6 percent below the November peak in 2007 (42,039 units). There were 5.1 months of housing supply in November (6 months is considered equilibrium), which represents a drop of 6.2 percent from November 2016 (6.5 months).
November inventory decreased from October by 1 percent. This direction is consistent with historical data that indicate November inventory on average (2012-16) decreases from October by 1.7 percent.
November residential sales rose 5.8 percent from October. Historical data indicate that November sales on average (2012-16) decrease from October by 1.7 percent. The average days on the market until a listing sold was 126 days, down 2.9 percent from last year. According to the National Association of Realtors November Existing Home Sales Report, November home sales were 0.4 percent higher than home sales during the same month in 2016. See how Alabama compares with the U.S. residential market by clicking here.
The November median sales price increased 2.2 percent from the same period last year to $176,222. During November, 36 percent of Alabama markets experienced price gains from November 2016. This indicator can fluctuate from month to month because of sampling size of data and seasonal buying patterns.
The metro markets in Alabama representing 70 percent of all sales continued to trend toward greater seller bargaining power with 4.3 months of supply. Outside the metro markets, Alabama’s mid-sized markets are reporting 5.2 months of supply, while rural areas are reporting 6.6 months of supply. There have been significant improvements from inventory peaks experienced during the recession. The supply of quality inventory in the past has affected sales, according to some boots-on-the-ground professionals.
“The economy and real estate markets continue to show they are resilient. Regardless of the economic metric — GDP, monthly jobs or home prices — the dashboard registers an ‘all-systems-go’ economy,” said KC Conway, director of research and corporate engagement at the Alabama Center for Real Estate. “GDP started the year off with its best Q1 reading in several years and followed it up with above 3 percent readings for Q2 and Q3. (This year) will be the first year since the financial crisis that the economy registered an annual GDP greater than 2 percent. It was just plus 1.6 percent for 2016.
“Job growth is healthy as well. The first week of December the market received solid monthly jobs reports from both ADP (which measures private industry job formation) and the BLS (the government’s monthly jobs report produced by the Bureau of Labor Statistics). ADP reported a healthy new 190,000 private-sector jobs for November and a monthly average of 210,000 jobs over the prior 12 months. The BLS reported November jobs at a higher-than-expected level of 228,000 jobs – and its year-to-date monthly average is 174,000. Unemployment remains low at 4.1 percent, and inflation was just reported on December 13th at 1.7 percent for the “core rate” (which excludes the more volatile food and energy components) and 2.2 percent overall annualized due to higher energy prices.
“The Federal Reserve is taking note of the expanding economy and followed up its prior two rate hikes earlier in 2017 with a 0.25 percent rate increase at its December 13th meeting. Housing conditions remain conducive to growth in new supply and more transaction activity. Single-family home inventories are below demand levels across the nation, Southeast and most Alabama markets. The national rate of appreciation is running above 6 percent on the heels of 5-plus percent in 2016. This is leading builders and lenders to be more receptive to adding inventory. New housing starts and permits will likely end 2017 at or above the 1.3 million units level, split 30 percent multifamily and 70 percent single-family. The outlook heading into 2018 is the best we have seen in a decade.”
Click here to generate more graphs from the Alabama November Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.
Republished with permission from the Alabama NewsCenter.