What a busy month this has been as we all got our youngsters ready for school! I had many friends sending some kids off to college, and then my childless friends were just happy to get us all out of their way so we could ALL be back to our normal routines again. Well Tennessee Valley, the time has come, we are ALL happy to be into a good groove of Fall schedules.
Now the time of month has come to share with you the numbers that were compiled by the Alabama Center for Real Estate and our own Multiple listing service data. July’s numbers have been thoroughly scrubbed so let me share that report with you.
Huntsville/Madison County residential sales totaled 3,276 units in July, an increase in sales growth of 4.9% from the same period a year earlier.
The YTD Alabama sales forecast through July projected 27,605 closed transactions while the actual sales were 26,073 units. I feel that was a really great forecasting being only a 3.7 % cumulative variance.
Across Alabama, 48% of local markets reported positive sales growth compared to last July.
Pricing: Locally, our Median Sold price has decreased by 3.8% year over year, with this years average price point of $173,127 in the Huntsville/Madison County area.
Thus far in 2014 for our great State of Alabama, 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 July, this has come to fruition as prices are up in 15 of the 25 local markets. While this is good news for the market, as prices increase, sales (the typical lead story) attributable to investor bargain hunting will diminish the ability of this “buyer profile” to push the sales growth needle in the future. Distressed sales continue to significantly diminish as a percentage of total sales across the US, a trend most market watchers believe will continue in the future.
The median sales price improved by approximately 3.8% over last July and 5.4% when comparing the mid-year (Jan-July) average for a broader perspective. Still, Alabama remains below the nation’s recent pace of appreciation but the Center and most economists prefer gradual increases in pricing over spikes seen in many parts of the country. (Those were typically in markets that were hardest hit by the recession). Keep in mind that pricing can fluctuate from month-to-month due to sampling size of data and seasonal buying patterns.
Supply: Locally our current inventory or supply of homes is at 7.1 months. (6 months considered equilibrium during month of July.) So we are slightly heavier on our homes available for sale, and this is up by 26% from last year when we were very low in marketable homes at 5.6 months in July 2013.
The statewide housing inventory in July was 34,060 units, an increase of .4% from July 2013 but 17.4% below the month of July peak in 2010 (41,259 units). There was 7.8 months of housing supply in July 2014 versus 7.9 months of supply in July 2013, a 1.7 % favorable reduction. July inventory increased by .8 percent from the prior month. This direction contrast with historical data that indicates July inventory on average (09-13) traditionally decreases from the month of June by .6 percent.
Seeking Balance: Eight of our States local markets are considered near or in balance where buyer and seller enjoy equal bargaining power. More markets are inching closer so this is encouraging news. 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 (14 of 25 markets or 56 percent still have 10+ months of supply) but the supply of “quality” inventory is limiting sales according to local professionals with boots on the ground. Only 11 of 25 of local markets have single-digit months of housing supply so this is an area where more reduction would be welcome news. With that offered, metro markets representing 70% of statewide transactions, are edging closer and closer to equilibrium with 6.6 months of supply. Huntsville/Madison county is at 7.1 months of available inventory.
Industry Perspective: First with our professional perspective at Amanda Howard Real Estate. We do expect to continue to see the market remain healthy, but I do not foresee any more upward risings that would raise us above last years levels of sales of homes. As mortgage industries are improving, and consumer confidence is improving, our housing market continues to improve at that slow but steady pace. I expect to see those results next year, and we will start to see an increase over 2013 sales in 2015. Holding that though we may not see drastic drops in inventory as we have seen in other parts of the country, Huntsville will, as is typical, remain the slow and steady. However this will remain to keep our marketplace robust. Continuing to prove that Huntsville, Madison, and Madison county area is a strong area to invest in.
Now for State and national news,”Housing data point to a continued but modest rebound in the housing market, in line with our prior forecast,” said Fannie Mae Chief Economist Doug Duncan. “Recent housing activity picked up seasonally as we expected, yet many indicators remain near or below the levels for the same period last year. For all of 2014, we continue to expect total home sales to decline about 2.0 percent and total mortgage originations to decline approximately 41.0 percent. We also expect total single-family mortgage debt outstanding to rise slightly this year before strengthening further in 2015.”