Sales: According to the Phenix City Board of Realtors Multiple Listing Service, Phenix City area residential sales totaled 68 units during February, unchanged from the same month a year earlier. Results were 7.6 percent below the five-year February average of 74 sales. Two more resources to review: Quarterly Report and the Annual Report.
For all of Phenix City’s area home sales data, click here.
Forecast: February sales were 17 units, or 20 percent, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 85 sales for the month, while actual sales were 68 units. ACRE forecasts a total of 1,205 residential sales in the Phenix City area during 2018. There were 1,138 actual sales in 2017.
Supply: Phenix City area housing inventory in February totaled 437 listings, a decrease of 22.9 percent from February 2017. Inventory levels have reduced 66.4 percent from the 10-year February peak reached in 2008, when 1,300 units were listed for sale. The inventory-to-sales ratio in February was 6.4 months of housing supply. Restated, at the February sales pace, it would take 6.4 months to absorb the current inventory for sale. The market equilibrium (balance between supply and demand) is considered to be approximately 6 months.
Demand: February sales increased 4.6 percent from the prior month. This direction is consistent with historical data indicating that February sales on average (2013-17) increase from January by 20.6 percent. The average number of days on the market until homes sold was 132 days, up 10 percent from the previous year.
Pricing: The Phenix City median sales price in February was $148,100, an increase of 1.4 percent from one year ago and an increase of 16.7 percent from the prior month. This direction is inconsistent with historical data (2013-17) indicating that the February median sales price on average decreases from January by 11.3 percent. The differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.
Industry perspective: The 10-year treasury is a crucial indicator of economic expansion. As of March 1, 2018, the 10-year treasury stood at 2.88 percent, a slight increase from last month’s rate of 2.86 percent. Mortgage rates also experienced a slight increase recently as the current rate on a 30-year fixed-rate mortgage is 4.57 percent, up from 4.38 percent one month ago. As the economy continues to strengthen, people will have more money in their pockets with the intent to spend. This increase in spending will most likely create higher stock prices and lower bond prices. With this increase of confidence in the market, mortgage interest rates can be expected to increase.
The National Association of Home Builders (NAHB) produces economic analyses of the home-building industry based on government data. The Housing Market Index (HMI) depicts market conditions for the sale of new homes. The HMI ranges from 0 to 100; a rate greater than 50 represents good sales conditions.
The HMI in the South has stayed relatively steady in the past few months with a score of 73. However, the HMI is lower in some regions of the United States, such as the Northeast, which has a rate of 56. The West has a higher HMI of 77, and a better market for good housing conditions.
The Federal Housing Finance Agency uses the House Price Index (HPI) to measure the average price changes in repeat sales or refinancing on the same properties. The FHFA’s national HPI was up 6.7 percent from the previous year compared to Alabama, which has increased from the previous year by 5.6 percent. The HPI rose in all 49 states except for Mississippi.
Compared to the national housing market conditions, Alabama’s real estate market has been showing improvement. Although total residential sales in Alabama decreased 2.3 percent from January 2017, the statewide median sales price increased 2.3 percent from January 2017. Statewide, homes in Alabama are selling much more quickly than in recent years as the average days on the market decreased 19.6 percent from one year ago.
Click here to download graphs from the Phenix City January Housing Report, including Total Sales, Average Sales Price, Days on the Market, Total Inventory and Months of Supply.