TUSCALOOSA, Ala. – The number of existing homes sold in Alabama has fallen for the third consecutive month, according to data from the Alabama Real Estate Research and Education Center at The University of Alabama.
“In contrast to the two previous months, when the decline in home sales was marginal, this time the decline was far more substantial,” said Dr. Leonard Zumpano, director of the center. He said the number of existing homes sold in September fell by 20.4 percent from 5,175 to 4,121.
“While some of this sales decline may be weather related and, year-to-date, home sales are still ahead of last year, the trend does suggest the housing market may be slowing down as we approach the end of the year. The number of existing homes sold is up 16.2 percent from last year, so we are still in record territory,” Zumpano said.
During September, the average number of days a house was on the market rose 14.3 percent from 126 to 144. This is a sizable increase in average selling time and further evidence of a possible slowdown in Alabama’s housing market, according to the center’s statistics.
At the same time, the number of homes listed fell from 25,306 to 25,217. Given the sales rate in September, this translates into a 6.1 month supply of homes, according to Zumpano. This represents a significant increase in supply compared to August when the absorption rate was 4.9 months. Year-to-date, the number of homes listed in Alabama fell by 3.5 percent from 240,090 to 231,784 between 2003 and 2004.
On the other hand, Alabama’s average selling price increased again in September by 1.8 percent from $137,112 to $139,570. Existing home prices are up 12 percent from 2003.
Indications of a softening market are also apparent in the region, Zumpano noted. Although still slightly ahead of last year’s pace, the number of existing homes sold in the South fell 0.7 percent from 2,690,000 in August to 2,670,000 in September.
The average selling price in the Southern region of the country fell 1.5 percent from $221,200 in August to $218,000 in the September. This is at an 8.9 percent increase over the average selling price of September 2003.
On the national level, the National Association of REALTORS® (NAR) reported that the number of existing homes sold actually increased by 3.1 percent from 6,550,000 to 6,750,000, but this is only up 1 percent compared to last year (on an annualized, seasonally-adjusted basis). The nation’s average selling price fell by 1.1 percent from $239,900 to $237,300, but it is up 9.5 percent compared to September 2003.
Within Alabama, existing home sales decreased in 18 of the areas tracked by the research center and remained unchanged in two locations. Walker County was the only location to report an increase in home sales during September. Baldwin County took a hit in September with a 44.4 percent decrease in number of existing homes sold. This largely reflects the impact of Hurricane Ivan which hit the Alabama Gulf Coast in mid-September.
Mobile and Calhoun Counties also saw sizeable decreases in existing homes sold of 25.6 percent and 28.8 percent, respectively.
Average selling price increased in 11 of the tracked areas and decreased in the remaining 10 locations. This accounts for the slight increase in average selling price seen in September. There were several records set during September. Mobile, Tuscaloosa, Jackson County, and Phenix City all broke their previous highs for the year in average selling price.
As far as the new home market is concerned, McGraw Hill reports that new residential construction in Alabama during September was the lowest monthly total recorded so far this year. (Residential construction encompasses one and two family houses and apartments).
On a year-to-date basis, however, residential construction for September in the state of Alabama is up 35.5 percent compared to September 2003.
According to CNN Money, 30-year mortgage rates are up 0.11 percent from last week. However, even as rates rise, mortgage demand continues to rise. New loan applications climbed 12.6 percent from last week. Refinancing requests are up 3.1 percent compared to last week.
“With the September housing statistics now in the book, there is no question that Alabama’s housing market slowed during the third quarter,” Zumpano said. “While part of the September sales decline was weather related, sales also fell in July and August. As we move into the winter months the housing sector may remain sluggish, but there are no fundamental problems evident in the data. We still expect the housing market to end the year near last year’s record levels.”
The Alabama Real Estate Research and Education Center is part of The University of Alabama’s Culverhouse College of Commerce and Business Administration. The UA business school, founded in 1919, has been recognized repeatedly for offering a high-quality, cost-effective education.
Research assistant Alan J. Lloyd contributed to this report.
Contact
Bill Gerdes, UA Business Writer, 205/348-8318, bgerdes@cba.ua.edu
Source
Dr. Leonard Zumpano, professor of finance, chair of real estate and director, Alabama Real Estate Research and Education Center, 205/348-8988