May residential sales in Alabama experienced an 13.8 percent increase when compared to May 2011. May represents the eleventh consecutive month that Alabama home sales have improved when compared to the same month from the prior year. Alabama’s residential inventory also continues to shrink and that is favorable news as the market enters the peak home buying season.
Supply: The statewide housing inventory in May was 34,479 units, a decrease of 11.1 percent from May 2011 and 16.0 percent from the month of May’s peak in 2008 (41,031 units).
There was 9.0 months of housing supply (6 months considered equilibrium) in May 2012 versus 11.5 months of supply in May 2011, a significant decrease of 21.9 percent.
May inventory in Alabama experienced a 1.1 percent increase when compared to the prior month. Historical data indicates that May inventory on average (’07-’11) traditionally increases from the month of April 2.1 percent.
Demand: May residential sales in Alabama experienced an 13.8 percent increase when compared to May 2011. In our April report, ACRE estimated that 150 home sales that were scheduled to close in April 2011 were unable to do so between 27th and 30th due to the deadly tornado outbreak in the state. Many of those transactions were pushed into May 2011 while some of the homes were destroyed, making those sales null and void. But for the events of April 27th, the comparative figure in May 2011 may have been lower and thus the percent growth from May 2012 to May 2011 marginally higher – likely an additional 3 to 5 percent on top of the actual growth rate stated above. Either figure represents significant progress for our statewide real estate market and are consistent with our 2012 forecasts.
In May, Alabama residential sales outperformed the US market which showed an increase of 9.6 percent from the prior year (May 2011), according to the National Association of REALTORS (NAR). NAR also reported that the South region sales were up 9.2 percent from last May. Investors accounted for 17 percent of nationwide sales while 28 percent were all-cash sales and 34 percent were first-time home buyers.
May statewide residential sales were up 9.4% up from the prior month. This movement is consistent with historical data indicating that May sales, on average (’07-’11), increase from the month of April by 11.3 percent.
In comparison, US sales declined 1.5 percent from last month while the South region slipped .6 percent increase from the prior month (April 2012).
Pricing: The statewide median selling price in May was $127,143, an increase of 2.4 percent from last May and the third increase over the last eight months. This figure also represents an increase of 4.8 percent when compared to the prior month. Historical data (’07-’11) indicates that the May median selling price traditionally increases from the month of April by 4.2 percent. Nationwide, NAR says that distressed homes – foreclosures and short sales sold at deep discounts – accounted for 25 percent of May sales (15 percent were foreclosures and 10 percent were short sales), compared with 28 percent in April and 31 percent in May 2011. Foreclosures typically sold for an average 19 percent below market price in May, while short sales were discounted 14 percent.