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Reported By Alabama Center for Real Estate (ACRE)
on September 25, 2014 at 8:53 AM
Monthly Sales: Lee County residential sales totaled 142 units in August, a significant improvement in sales growth of 24.6 percent from the same period a year earlier. August sales were 7 units above our monthly forecast. The year-to-date sales forecast through August projected 996 closed transactions while actual closings were 1,009 units.
Supply: The Lee County housing inventory in August was 820 units, a decrease of 7.4 percent from August 2013 and 40.8 percent from the month of August inventory peak in 2010 (1,385 units).
August inventory in Lee County also decreased by 1.8 percent from the prior month. This direction is consistent with historical data indicating that August inventory on average (’09-’13) decreases from the month of July by 4.0 percent.
The inventory-to-sales ratio in August was 5.8 months of housing supply. Restated, at the August sales pace, it would take 5.8 months to absorb the current inventory for sale. The market equilibrium (balance between supply and demand) is considered to be approximately 7 months during the month of August. This represents the first local market in Alabama that can be officially labeled a seller’s market. The last time the market experience 5.2+/- months of housing supply was August 2006 when it was 5.3 months.
Demand: Residential sales decreased by 11.3 percent from the prior month. This direction is consistent with seasonal historical data indicating that August sales on average (’09-’13) decreases from the month of July by 30.0 percent.
Existing single family home sales account for 51 percent (down from 61% in Aug’13) of total sales while 25 percent (same as Aug’13) were new home sales and 24 percent (up from 13% in Aug’13) were condo buyers.
Pricing: The Lee County median sales price in August was $174,200, a 4.3 percent decrease from last August. The higher than normal of condo sales may have skewed, in this case, lowered the August median sales price. The August median price slipped 7.0 percent compared to the prior month. Historical data (’09-’13) indicates that the August median sales price traditionally decreases from the month of July by .1 percent. Pricing can fluctuate from month-to-month as the sample size of data (closed transactions) is subject to seasonal buying patterns so a broader lens as to pricing trends is appropriate and we recommend contacting a local real estate professional for additional market pricing information.
Industry Perspective: “The August National Housing Survey results lend support to our forecast that 2015 will likely not be a breakout year for housing,” said Doug Duncan, senior vice president and chief economist at Fannie Mae. “The deterioration in consumer attitudes about the current home buying environment reflects a shift away from record home purchase affordability without enough momentum in consumer personal financial sentiment to compensate for it. To date, this year’s labor market strength has not translated into sufficient income gains to inspire confidence among consumers to purchase a home, even in the current favorable interest rate environment. Our third quarter Mortgage Lender Sentiment Survey results, to be released later this month, are expected to show whether mortgage demand from the lender perspective is in line with consumer housing sentiment.”
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