Sales: According to the Gulf Coast Multiple Listing Service, Mobile-area residential sales totaled 348 units during November, an increase of 5.5 percent from the same month last year. Total home sales in November 2016 were 330. Year-to-date sales in the area through November are down 0.8 percent from 2016. Two more resources to review: Quarterly Report and Annual Report.
Forecast: October sales were 34 units above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE’s 2017 sales forecast through October projected 4,033 closed transactions, while the actual sales were 4,141 units.
Supply: The Mobile-area housing inventory in November was 1,644 units, a decrease of 2.4 percent from November 2016. Inventory has declined 52.1 percent from the November peak (3,429 units) reached in 2010. There were 4.7 months of housing supply last month (6 months represents a balanced market).
Demand: November sales increased 3 percent from October. Historical data indicate November sales, on average (2012-16), decrease from October by 3.9 percent.
Pricing: The Mobile-area median sales price in November was $141,600, an increase of 8.9 percent compared to the median sales price from last November. The November median sales price increased 0.1 percent when compared to October. Historical data indicate the November median sales prices typically decreased 3.9 percent from the month of October from 2012 through 2016. Pricing can fluctuate from month to month as the sample size of data is subject to seasonal buying patterns. ACRE highly recommends consulting with a local real estate professional to discuss prices, which can vary from neighborhood to neighborhood.
Industry perspective: “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.”
The Mobile Area Residential Monthly Report is developed in conjunction with the Mobile Area Association of Realtors to better serve Gulf Coast consumers.