Home sales improved slightly in November, with 65 properties sold compared with 59 in October.
New construction (most selling between $180,000 and $200,000) accounted for 37% of all the sales on the Eastern Shore of the Mobile, Alabama, metro area.
For the price-per-square-foot fans, the average in new construction sales was $98.76 a square foot; the low, $77.94; and the high, $126.60. These numbers are significant as an indicator of what sellers of existing homes could hope to sell for, particularly in neighborhoods with competing new construction.
The appeal of new construction is not new, but with the home-buyer tax credit initially targeting first-time buyers who are often younger buyers, the attraction of "new" is even stronger. In fact, Move.com reported in November that a survey shows 5 percent expect to buy a home in 2010 and those buyers are also most likely to be 34 years and younger.
On the Eastern Shore, new construction incentives sometimes include generous closing cost assistance for buyers, upgrade packages (fences and the like) and selling incentives to Realtors.
All of this makes it more difficult for existing home-sellers to compete for sales.
Mortgage interest rates remain low - below 5 percent.
However, recently announced proposed changes at the Federal Housing Administration may impact the market. FHA loans accounted for 3% of loans in 2006, but now have been used by 30% of borrowers as conventional mortgage credit standards have tightened. Also, FHA loans currently require only 3.5 percent down, a figure that's attractive to home-buyers who suffered financial losses in the market crash.
Walking a fine line between helping the housing market and protecting the viability of the FHA, the Obama administration has proposed but not yet adopted:
- Requiring more money down
- Limiting seller-paid closing costs to 3 percent instead of the present 6 percent
- Increasing the mortgage insurance premium
FHA loans are limited to $285,000 in Baldwin County.
There are other changes expected in January that will affect the duration of time between contract and closing and the viability of some mortgage brokers (as opposed to lenders and banks) to approve loans.
Here are the stats for the Eastern Shore:
Total houses for sale: 1,218
Spanish Fort: 164
Daphne: 381
Fairhope: 549
Lake Forest: 124
Pending sales
Total: 110 (39 are new construction)
Spanish Fort: 17
Daphne: 49
Fairhope: 32
Lake Forest: 12
Closed sales for November 2009
Total: 65
Average sales price: $192,968, down from $204,107 in October, $233,867 in September and $263,997 in August.
Median sales price: $$182,801, up from $179,900 in October, but down from $184,900 in September.
List to sale percentage: 95.96%, down from 96.82% in October and 96.19% in September
Spanish Fort: 9
Daphne: 26
Fairhope: 18
Lake Forest: 12
(Data from the Baldwin County Multiple Listing Service)
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