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Click here to view or print the entire November report compliments of the ACRE Corporate Cabinet.
Alabama residential sales totaled 3,072 units in November, virtually matching the volume from the same period a year earlier and 194 units below our monthly forecast. While the increase was by one unit, November represents the fifth consecutive month whereby sales have eclipsed last year's pace. Nationally, November sales were 2.1 percent above the same period last year. See more details of how Alabama compares to the broader US market here.
ACRE's year-to-date (ytd) Alabama sales forecast through November projected 42,017 closed transactions while the actual sales were 41,1219 units, a 2.1 percent cumulative variance. Alabama YTD sales through November have been sluggish in most markets across the State but remain 3.0 percent above the 2013. Sales were up 3.3 percent in the third quarter compared to 2013.
Across Alabama, 60 percent of local markets reported positive sales growth compared to last November. In comparison, this figure was 84 percent in October, 76 percent in September, 64 percent in August and 48 percent in July. This figure is also 60 percent when taking into account total YTD sales through November compared to 2013.
Pricing: While the return of more consistent year-over-year sales gains during the second half is encouraging news, the lead story in 2014 relates to pricing. The Center shared in prior monthly reports that pricing represents the primary indicator that still had the greatest upside in the future. Through November, this has come to fruition as the YTD median sales price is up in 17 of 25 or 68 percent of local markets. While this is good news for the market, as prices increase, sales (the typical lead story) attributable to investors bargain hunting will diminish the ability of this "buyer profile" to push the sales needle in the future. Distressed sales also continue to significantly diminish as a percentage of total sales across the US, a trend most market watchers content will continue in the future.
The median sales price has improved by approximately 5.2 percent from 2013 when comparing the year-to-date (Jan-November) average. Still, Alabama remains below the nation's recent pace of appreciation but the Center prefers gradual increases in pricing over spikes seen in many parts of the country (typically in markets hardest hit by the recession). Keep in mind that pricing can fluctuate from month-to-month due to sampling size of data and seasonal buying patterns. The median sales price increased 1.2 percent from last November but was 2.6 percent below the prior month. This direction is consistent with seasonal and historical data (09-13) that reflects that the November median sales price traditionally decreases 2.7 percent from the month of October.
View full sizeAlabama housing inventory in November was virtually unchanged from last year. November inventory now down 20% from the November peak in 2007. Infograph courtesy of ACRE. All rights reserved. Supply: The statewide housing inventory in November was 32,846 units, a decrease of .5 percent from November 2013 and 20.0 percent below the month of November peak in 2007 (41,059 units). There was 10.7 months of housing supply (8.0 months NSA considered equilibrium during month of November) in November 2014 - the same months of supply as November 2013. October inventory decreased .5 percent from the the prior month. This direction is consistent with historical data that indicates November inventory on average (09-13) traditionally decreases from the month of October by 2.2 percent.
Demand: As anticipated, November statewide residential sales declined 18.8 percent from the prior month. While at a higher percentage change, this direction is consistent with seasonal trends & historical data that indicates November sales, on average (09-13), decrease from the month of October by 7.5 percent. Encouraging news is that sales during the month were 41.6 percent above the month of November bottom experienced in 2008.
The fact that there are fewer distressed properties (attracting bargain hunting investors - typically cash buyers) changing hands when compared to last year has also narrowed the favorable percentage change associated with sales growth.
Seeking Balance: Seven or 28 percent of local markets are considered near or in balance where buyer and seller enjoy equal bargaining power in November. This direction is down from 48 percent in October.
In contrast to reports of lack of inventory at the national level, Alabama still has a significant level of housing supply in most local markets (21 of 25 markets or 84 percent still have 10.0+ months of supply) but the supply of "quality" inventory is limiting sales according to some local professionals with boots on the ground.
National Industry Perspective: "November's National Housing Survey results support the 2014 trend of gradual, but often sporadic and unspectacular, improvement across a range of indicators measuring consumer attitudes toward housing - mirroring the uneven recovery in housing activity this year," said Doug Duncan, senior vice president and chief economist at Fannie Mae. "More encouraging is the steady upward trend this year in consumers' assessment of their personal finances, with 46 percent of Americans - near the survey's high - expecting their personal financial situation to improve over the next 12 months. We expect consumer attitudes toward housing to improve as the pickup in the overall economy lifts employment and income prospects. However, a sustained improvement in sentiment that could support a robust housing recovery, as policy support is removed, will require meaningful gains in household income. While such gains have so far been elusive, the strength in the November jobs report, which points to faster growth in labor income in the current quarter, marks a good start." For full report, go HERE.
This monthly report is provided compliments of the ACRE Corporate Cabinet.
2013 Alabama Residential Recap - Sales Up 10%
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