Birmingham real estate is on track to finish 2014 strong, judging by the latest report from the Alabama Center for Real Estate (ACRE).
ACRE’s monthly report for November was released on the 21st, and shows more evidence that the market is becoming more and more balanced with each passing month as we inch closer to a bonafide sellers’ market.
Here is a review of key stats and trends revealed in the report.
Sales Rise; Supply Falls Based on data supplied by the Greater Alabama MLS, there were 827 residential sales in November in the Birmingham metro area. This is up by 2.4 percent from November 2013; year-to-date sales are up by 5.6 percent compared to this point in time last year. Inventory for the metro area in November stood at 6,880 units, which was down by 10.4 percent from November 2013. That is a substantial drop that suggests a weakening of supply amidst higher demand. Supply also fell month-to-month, from October to November, by 0.3 percent. Overall, there are 8.3 months of housing supply, compared to 9.5 months this time last year. This 12.5 percent drop is a positive sign for the market as we approach equilibrium (here represented by eight months of supply for your typical November market). Eighty-three percent of all sales in November were existing single-family home sales; 14 percent were new home sales, and three percent were condo sales.
Prices Dip Slightly According to ACRE, the area’s median sales price stood at $165,000, meaning half of all homes were priced lower than that, and half were priced higher. This is down slightly by 0.6 percent from last year, and was the same as it was a month ago. The thing to note about prices is that they are subject to a significant degree of fluctuation when viewed from a month-to-month (and even year-to-year) perspective. To really understand pricing trends and movements, it’s best to look at a specific area and examine pricing data at the neighborhood level (since that means the most to a buyer or seller).
Synopsis Overall, the Birmingham real estate market continues to improve. We’re not seeing spectacular results, but the improvement, while gradual, has been noticeable. The market is still linked quite considerably to economic factors, like access to credit and household income. For us to see more significant improvement would have to come from significant improvement in economic conditions.