Alabama residential home sales in April virtually unchanged from prior year while pricing improves.
Alabama residential sales totaled 3,837 units in April, a slip in sales growth of .9 percent from the same period a year earlier but only 106 units shy of our monthly forecast. But for the severe weather outbreak experienced at the end of the month when conditions postponed several closings in many parts of the State into May, the growth percentage rate for the State would have been virtually unchanged when compared to April 2013. See how Alabama compares to national market here.
The YTD Alabama sales forecast through April projected 13,703 closed transactions while the actual sales were 12,951 units, a 5 percent variance which is within the margin of error. YTD sales through April have been sluggish in most markets across the State.
The sales pace during the balance of the 2nd quarter may provide a glimpse into what we can anticipate during the balance of the year and will be monitored very closely by the industry. The Center’s annual sales forecast for Alabama projects modest growth in sales of 5 percent over the previous year (sales grew 10% in 2013) – the sales growth through the first four months is .6 percent. The Center will revisit forecast after the month of June (midway point) and provide a recast if deemed appropriate.
Across Alabama, 40 percent of local markets reported positive sales growth compared to last April. This figure increases to 56 percent when taking into account total YTD sales compared to 2013.
Pricing: Thus far in 2014, the lead story relates to pricing. The Center shared in earlier reports that pricing represents the primary indicator that still has the greatest upside in the future. At least through four months, this has come to fruition as prices are up in 21 of 25 or 84 percent of local markets. While this is good news for the market, as prices increase, sales (the typical lead story) attributable to investor’s bargain hunting will diminish this sectors ability to push the sales growth needle in the future.
The median sales price improved by approximately 9.1 percent over last April and 7.2 percent when comparing the first four-month (Jan-April) average for a broader perspective. Still, Alabama remains below the nation’s recent pace of appreciation but the Center prefers gradual increases in pricing over spikes seen in many parts of the country (typically in markets hardest hit by the recession). Remember, pricing can fluctuate from month-to-month due to sampling size of data. The median price improved 9.7 percent from the prior month. This direction is consistent with historical data (09-13) that reflects that the April sales price traditionally increase from the month of March by 4.0 percent.
Supply: The statewide housing inventory in April was 33,592 units, an increase of 1.1 percent from April 2013 and 17.1 percent below the month of April peak in 2008 (40,535 units). There was 8.8 months of housing supply (7 months considered equilibrium during month of April) in April 2014 versus 8.6 months of supply in April 2013, 2 percent above last year. April inventory increased by 3.2 percent from the prior month. This direction is consistent with historical data that indicates April inventory on average (Â09-13) traditionally increases from the month of March by 1.8 percent. In contrast to reports of lack of inventory at the national level, Alabama still has above the needed levels of supply in most local markets but the supply of “quality” inventory is limiting sales according to local professionals with boots on the ground. Only 10 of 25 or 40 percent of local markets have single-digit months of housing supply so this is an area where more reduction would be welcome news. On a positive note, this figure is an improvement from last month when it stood at 36 percent. With that said, metro markets representing 70 percent of statewide transactions, are edging closer and closer to equilibrium with 7.7 months of supply.
Demand: As anticipated, April statewide residential sales improved 6.5 percent from the prior month. This direction is consistent with seasonal trends & recent historical data that indicates April sales, on average (09-Â13), increase from the month of March by 3.5 percent. The fact that there are fewer distressed properties changing hands when compared to last year also has an impact on the the narrowing percentage changes associated with sales growth.
Please click here for the entire article.