March sales now up 16% from its sales bottom in 2009.
Alabama residential sales totaled 3,596 units in March, an improvement in sales growth of 1.5 percent from last year and 347 units short of the ACRE monthly forecast. The YTD sales forecast through March projected 9,766 closed transactions while the actual sales were 9,120 units, 6% off which is just outside the margin of error. Sales for the first quarter were….”sluggish”. The next quarter will be a big factor in determining how the year goes. The annual sales forecast is for modest growth of 5% - but the sales growth through the first quarter was 1.2%.
Across Alabama, 52 percent of local markets reported positive sales growth compared to last March, which is decent.
Supply: The statewide housing inventory in March was 32,560 units, an increase of 0.9% from March 2013 and 17.9 percent below the month of March peak in 2010 (39,660 units). There was 9.1 months of housing supply (8 months considered equilibrium) in March 2014 versus 9.1 months of supply in March 2013, so slightly better. March inventory increased by 2.7% from February. This direction is consistent with historical* data that indicates March inventory on average traditionally increases from the month of February by 1.9%. Altho National Markets are reporting shortages, we still have the quantity, but possibly not the quality (best have been snatched up). Only 9 of 25 or 36% of local markets have single-digit months of housing supply, so this is not very good but better than last month where only 5 were that low with the metro areas leading the sales push!
Demand: As anticipated, March statewide residential sales improved at a rate of 23.4%, similar to the historical* figure of 31.1% from February. Fewer foreclosures & short sales factor into the drop.
Pricing: As can be expected when taking into account our overall level of supply (see above), pricing represents the primary indicator that still has the greatest upside in the future. The median sales price did improve by approximately 6.4 percent over last year across Alabama during the first quarter of 2014 but remains below the nation's recent pace of appreciation. A gradual increases in pricing is preferred over the spikes seen in many parts of the country.
Industry Perspective: per Lawrence Yun, an economist of NAR, recently commented on the sluggish sales in early 2014, "We had ongoing unusual weather disruptions across much of the country last month, with the continuing frictions of constrained inventory (at national level), restrictive mortgage lending standards and housing affordability less favorable than a year ago. Some transactions are simply being delayed, so there should be some improvement in the months ahead. With an expected pickup in job creation, home sales should trend up modestly over the course of the year."
2013 Alabama Residential Recap - Sales Up 10%
* “historic” = 2009-2013
This Report is developed in conjunction with the Alabama Association of REALTORS and its local associations, compliments of the ACRE Corporate Cabinet..