Alabama new home sales in October improved by 34.8 percent from the same period in 2011. Year-to-date (YTD) through October, sales are up 7.1 percent from 2011.
Click here for entire monthly report.
October new home sales in Alabama’s five metro markets, representing approximately seventy percent of all statewide transactions, experienced a .3 percent decrease from the prior month. Real estate sales are seasonal and September represents the annual transitional month when the market anticipates a slower pace in closed transactions, a trend that traditionally continues into the winter quarters.
Eighty percent of metro areas have experienced YTD increase in new home sales compared to 2011 with Montgomery (up 18%) posting the best results followed by Birmingham (15%),Tuscaloosa (12%) and Huntsville (1%). YTD new home sales have declined in Mobile (down 11%).
Demand: In October, Alabama new home sales outperformed the US market which reflected an increase of 17.1 percent from October 2011 but .3 percent below the prior month, according to the US Census Bureau & HUD. The release also reported that the results from the South region were up 9.3 percent from October 2011 but 11.6 percent down from last month.
Alabama’s metro markets in October reflect 4.8 months of new home supply, a decrease from 6.7 months of supply in October 2011 and slightly higher than 4.6 months in September 2012. According to the US Census Bureau & HUD, the US inventory of new homes for sale increased to 147,000 homes or 4.8 months’ supply, also a big improvement from 6.1 months of supply in October 2011 (down 21%).
Pricing: Alabama’s metro market’s median new home sales price in October was $205,741, a decrease of 3.3 percent from last month and 3.1% when compared to October 2011.
New Home Pipeline: October statewide housing starts increased by 2.2 percent from the prior month and increased 16.4 percent from October 2011. YTD housing starts are up 4.6%. October statewide building permits were up 4.7 percent from the prior month and 27.6 percent from October 2011. YTD building permits are up 6.9%.
Residential Construction Employment: According to the Alabama Dept. of Industrial Relations, statewide residential construction employment was up .8 percent (300 jobs) to 61,700 from last month and is now at the same level as last year for the first time in 2011.
Local Results: 13 out of the 27 home builder associations (48% – up from 26% in prior month) reported gains in building permits from the prior month (Sept’12) while 14 associations (52% – up from 30%) reported gains in housing starts.
As the market continues through year-end, statistical volatility is anticipated. Real estate sales are seasonal and the sales pace begins to slow during the winter quarters. With that said, through October seventy-six percent (19 of 25) of the local housing markets have experienced year-to-date sales growth from 2011 and that is welcome news for Alabama consumers as well our state’s real estate community. On a more somber note, according to Global Insight’s most recent short-term economic outlook, “The economy still has only weak forward momentum. We expect growth in the 1.5–2.0% region in the fourth quarter. Some underlying fundamentals are improving—most importantly, housing. But uncertainty at home and abroad is holding back the business sector. If the uncertainty over the fiscal cliff remains extreme at the end of the year, consumer sentiment and spending will be damaged as well. How quickly those uncertainties clear up—especially over domestic fiscal policy—will determine how quickly the overall growth rate can pick up. We expect that the fog of uncertainty will gradually clear during 2013, setting the stage for a broad-based improvement in growth in 2014.”
Click here to see how your local real estate area performed in October compared to prior periods in time.
View the current monthly Alabama Residential Report here.
The ACRE New Construction Monthly Report is work product stemming from our partnership with the Home Builder’s Association of Alabama Foundation.
About ACRE. ACRE was founded in 1996 by the Alabama Real Estate Commission, the Alabama Association of REALTORS and the Office of the Dean, UA Culverhouse College of Commerce. ACRE is not a state-funded entity, rather its operates in part because of the goodwill & generosity of our statewide ACRE Partners.