Sales: According to the Dothan Multiple Listing Service Inc., Dothan-area residential sales totaled 128 units during March, down 3.8 percent from the 133 units sold in March 2017. The five-year average for total residential sales during March is 102 units. Two more resources to review: Quarterly Report and Annual Report.
For all of Dothan’s area real estate data, click here.
Forecast: Closed transactions in March were one unit above the Alabama Center for Real Estate’s (ACRE) monthly forecast of 127 units. ACRE forecasted 318 residential sales during the first quarter of 2018, while there were 304 actual sales.
Supply: The Dothan-area housing inventory in March was 1,085 units, an increase of 3.5 percent from March 2017. March inventory increased by 4.1 percent from last month’s total of 1,042 homes. Historical data indicates that March inventory on average (2013-2017) increases from February by 1 percent. The five-year average for total homes listed during March is 1,668 units.
Demand: March residential sales in the Dothan area increased 48.8 percent from February. Historical data (2013-2017) indicate that March residential sales on average increase by 32.6 percent from February. Homes selling in the Dothan area during March averaged 133 days on the market, a 10.1 percent improvement from March 2017’s average of 148 days on the market.
Seeking balance: The inventory for sale divided by the current monthly sales volume equals the number of months of supply. The market is considered to be in balance at approximately 6 months of supply. The Dothan area has 8.5 months of supply, down from 12.1 months in February and up from 7.9 months in March 2017.
Pricing: The Dothan-area median sales price during March was $150,500, a 9.5 percent increase from March 2017 and a 2.4 percent decrease from the prior month. Historical data indicate that March median sales prices on average (2013-2017) increase by 4.4 percent from the month of February. Differing sample sizes (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE highly recommends consulting with a local real estate professional to discuss pricing trends, as they will vary from neighborhood to neighborhood.
Industry perspective: Interest rates are likely to increase throughout 2018. The Federal Reserve’s Federal Open Market Committee (FOMC) met on March 21 and approved a quarter-point rate hike. As of April 5, the 10-Year Treasury stood at 2.83 percent, down slightly from 2.88 percent one month ago. Although daily yield curve rates have decreased slightly in the past month, many analysts are projecting that the 10-year Treasury will pass 3 percent in the months to come. According to Wells Fargo, the current interest rate on a 30-year fixed-rate mortgage is 4.58 percent (annual percentage rate).
As the overall economy continues to expand, it is not surprising to see growth in Alabama’s residential new construction market. February sales of newly constructed homes grew 22 percent month-over-month and 14 percent year-over-year. Statewide*, there were 507 new construction sales in February, up from 416 total sales in January and up from 445 total sales in February 2017. Year-to-date, new construction sales are up 6 percent from 2017.
February new construction sales in select Alabama markets
- Baldwin County – 100
- Birmingham Metro Area – 125
- Huntsville Metro Area – 112
- Lee County – 36
- Mobile Metro Area – 17
- Montgomery Metro Area – 35
- Tuscaloosa County – 15
New construction building permits and housing starts data are indicators of larger economic conditions. Generally speaking, the housing market is one of the first sectors to expand or contract during times of growth or decline. According to the U.S. Census Bureau, 1,225 building permits for new construction were issued in Alabama during February. Building permits increased 1.1 percent from January, when 1,212 permits were issued, and increased 10.1 percent from February 2017, when 1,113 permits were issued. ACRE projected 1,219 housing starts in Alabama during February. Housing starts decreased 2.9 percent from January (1,256) and increased 13 percent from February 2017 (1,079). Year-over-year increases in both building permits and projected housing starts are encouraging news, as they hint toward continued overall economic growth during the second quarter of 2018.
*ACRE receives new construction sales data from the following counties/areas: Baldwin County, Birmingham Metro Area, Calhoun County, Huntsville Metro Area, Lee County, Mobile Metro Area, Montgomery Metro Area, Tuscaloosa County and the Wiregrass Region. Combined, these counties/areas represent +/- 70 percent of Alabama’s total population.
Click here to generate more graphs from Dothan’s March Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.