Overall, the 2010 housing market on the Eastern Shore showed marked improvement over 2009 with the number of sales up 13%. But remember, 2009 was pretty bad.
The free-fall depreciation in home values in Fairhope, Daphne and Spanish Fort of 17.5% in 2009 slowed to 3.5% in 2010. Where and when we will hit bottom, no one knows.
The market is giving mixed signals about the future. So let's take a simple supply-and-demand look at it.
- Oversupply: 83% of all sales in 2010 were for houses price under $300,000, yet 38% of all the homes currently listed are priced over $300,000.
- Undersupply: 24% of all sales were new construction, yet only 14% of the current housing inventory is new. Because rampant over-building hurt this market (evidenced by many subdivisions that look they were visited by the apocalypse), I'm hesitant to encourage increased homebuilding. An undersupply of new construction may also help boost existing home sales. However, new home construction employs so many that it's hard to root against it.
- Oversupply: 25% of all sales were foreclosures or short sales and there's no way this can be good for a housing market. But there's actually an undersupply here with only 10% of current inventory on the Eastern Shore in the foreclosure/short sale category. Looking at default notices and receiving requests for price opinions from companies that manage troubled assets, I'm seeing a new round coming for foreclosures hitting the market.
- Oversupply: The market absorption rate stands at 13 months, meaning that if no other houses were listed it would take 13 months for every current listing to sell. Industry experts consider 6 months to be a healthy inventory load.
Recently announced hiring of workers by a major ship builder may help this housing market, but if it tracks like the steelmaker ThyssenKrupp, the process will be a long one, benefiting Mobile County as much if not more than Baldwin County.
Finally, a few trivial details from 2010 ... The cheapest house to sell on the Eastern Shore was on Pollard Road. This 3-bedroom, 1.5-bath, 1024 sf home, built in 1950, went for $27,000.
The most expensive sale was a 5-bedroom, 5.5-bath home with 4,792 square feet, built in 2000, with 100 feet on Mobile Bay. It sold for $2.3 million
On to the numbers:
For the year, there were 948 sales, with an average price of $228,658, compared to 803 sales in 2009, with an average price of $237,020. On average, sellers took 5% off their list price in order to sell in 2010. Average marketing time decreased from 183 days in 2009 to 169 days in 2010.
In the 4th quarter, 216 homes sold with an average price of $234,490. Sellers took on average almost 5.5% off list prices to sell.
Fairhope: 347 homes sold in 2010, compared to 271 homes in 2009. But the average sales price continued to drop, from $353,765 in 2008 to $275,373 in 2009, to $255,370 in 2010. Average market time: 182 days.
In the 4th quarter, 85 homes sold, unchanged from the previous quarter. Average price rose from $242,220 to $254,799. But days on market stretched to 210.
Daphne: 446 homes sold in 2010 vs. 303 sales in 2009. Average price dropped from $238,999 to $197,794 in 2010. This past year, sellers took an average of 4.5% off list in order to sell vs 3.5% in 2009. Market time decreased from 170 days to 161 days.
In the 4th quarter, 89 homes sold, down from the 113 sales last quarter. Average sale price rose from $200,757 in the 3rd quarter to $205,610 in the 4th quarter.
Sellers took on average 5.5% less than list price. Average market time: 158 days.
Spanish Fort: 155 homes sold, compared to 125 in 2009. Average sales price rose from $227,496 in 2009 to $257,665 in 2010. List-to-sale percentages were little changed with sellers settling for about 3.25% off list in '09 vs. 3.75% off in '10. Market time increased from 149 days to 159 days.
In the 4th quarter, 42 homes sold, up from 33 sales in the previous quarter. Average sales price dropped from $285,775 in the 3rd quarter to $254.586 in the 4th quarter. Sellers took on average 4% less than list price. Average market time: 155 days.