Sale: According to Baldwin Realtors, August home sales fell 12.7% year-on-year (Y/Y) from 838 to 732 completed transactions. Revenue rose 7.1% from July. Year-to-date sales are down 5.1%. Two other resources to view: quarterly report and annual report.
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inventory: Listings in August (1,871) are up 4.1% compared to July and 35% yoy. At the current selling pace, all active inventory in the market would be sold in 2.6 months, the same as in July and after 1.7 months in August 2021. The equilibrium point, where buyers and sellers have roughly equal bargaining power, is 4 -5 months of supply.
Pricing: Baldwin County’s August median selling price was $370,740, a record high and up 23.6% year over year and 12% from July. The different sample size (number of home sales in comparable months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as this will vary from neighborhood to neighborhood.
Homes sold in August spent an average of 26 days on the market, selling three days faster than August 2021.
Forecast: August sales were 47 units, or 6%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE forecast 779 sales for the month while actual sales were 732 units. ACRE forecast 6,450 total home sales year-to-date, while through August there were 6,285 actual sales, a 2.6% difference.
New build: The 112 new homes sold accounted for 15.3% of all home sales in August. Total sales fell 11.1% year over year. The average selling price for new home sales was $370,740, up 38.7% year-on-year and 3.8% from July.
Nationwide summary: Home sales in Alabama fell in August as rising mortgage rates dampened buyer demand. Revenue fell 11.3% year over year and 6.4% year-to-date. Buyer demand has returned to pre-COVID levels, with August sales down slightly (0.5%) from the five-year average. Further declines are likely in the coming months, with a 10-15% slowdown expected from last year’s pace.
Growth in home selling prices moderated in August, with the nationwide median home selling price rising 11.8% year-on-year, compared with an average of 15.6% from January to July. The nationwide median selling price fell 2.3% from an all-time high of $247,706 hit in July. Going forward, falling sales and rising inventories are likely to cause home price growth to moderate to 8-10%.
Inventories have risen slightly since July but have risen significantly (24.7%) since August 2021, when increased demand pushed inventories to a record low. However, inventory is still relatively tight, with 13,921 properties for sale down 29.4% from the five-year average. Unsold inventory was at 2.2 months supply, well below the equilibrium point of 4-5 months supply.
National summary: According to the National Association of Realtors (NAR), existing home sales eased slightly in August, falling 0.4% (seasonally adjusted annualized rate) from July, marking the seventh consecutive month of slowing sales activity. All four regions of the country reported year-on-year declines as home sales fell 19.9% year-on-year.
The median selling price for all home types increased 7.7% year-over-year to $389,500, the 126th consecutive year-over-year increase. However, home prices have declined somewhat over the past two months from a record high of $413,800 in June.
Properties are sold in an average of 16 days, one day faster than a year ago. Inventories are slowly trending up from the lows seen during the post-pandemic housing boom. The 1,280,000 listings at the end of August represent a 1.5% decrease from July and are flat from August 2021. August supply of 3.2 months was flat from July and up from 2.6 a year ago.
Lawrence Yun, NAR’s Chief Economist, said, “The real estate sector is the most sensitive to changes in Federal Reserve interest rate policy and experiences the most immediate impact. Weakness in home sales reflects this year’s escalating mortgage rates. Nonetheless, homeowners are doing well as there are almost no distressed home sales and home prices are still higher than a year ago.”
Yun also shared his outlook for the supply side of the market, saying, “Inventory levels will remain tight in the coming months and even years. Some homeowners are unwilling to trade up or down after locking in historically low mortgage rates in recent years, increasing the need for more new construction to boost supply.”
Cash sales accounted for 24% of all completed sales in August, flat from July but up from 22% a year ago. Second home buyers and individual investors bought 16% of home sales in August, up from 14% in July and 15% a year ago.
Foreclosures and short sales accounted for about 1% of transactions in August, essentially flat from July 2022 and August 2021.
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The Baldwin County Residential Monthly Report is being developed in conjunction with the Baldwin real estate agent to better serve Gulf Coast consumers.