Mobile-area home sales decline 20.3% year-over-year in October

Sales: According to the Mobile Area Association of Realtors, home sales in the area in October decreased 20.3% year-over-year (Y/Y) from 502 to 400 closed transactions. Sales decreased by 7% compared to September. Sales are down 9% so far this year. Two more resources to review: Quarterly report e Annual Report.

For all mobile area housing data, click here.

Inventory: October listings (823) were up 7% from September and up 30.6% from a year ago. At the current rate of sales, all active inventory on the market would be sold in 2.1 months, compared to 1.8 months in September and 1.3 months in October 2021. The break-even point where buyers and sellers have roughly equal power of negotiation is 4-5 months of supply.

Price: The average sales price in October was $225,000, up 7.7% from a year ago and up 3.7% from September. The different sample size (number of residential sales in the comparison months) can contribute to statistical volatility, including prices. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.

Homes sold in October had an average of 32 days on the market, six days more than in October 2021.

Forecast: October sales were 117 units, or 22.6%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 517 sales for the month, while actual sales were 400 units. ACRE forecast a total of 5,377 residential sales last year, while there were 4,632 actual sales through October, a difference of 13.9%.

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New construction: The 33 new homes sold represent 8.3% of all residential sales in the area in October. Total sales increased by 17.9% year-on-year. The average sale price in October was 293,900 dollars, which represents a decrease of 1.3% compared to a year ago and the same as in September.

Summary at the state level: Home sales in Alabama slowed in October as escalating mortgage rates dampened buyer demand. Sales decreased by 23.4% year-on-year and by 8.9% so far this year. Buyer demand is back below pre-Covid levels, with October sales down 12.6% from the five-year average. Additional declines are likely in the coming months, with a 10-15% slowdown expected from last year’s pace.

Growth in home sales prices moderated in October and the average sales price across the state rose 11.4% year-over-year, down from an average of 14.6% from January to September. The statewide median sales price increased 1.7% since September. Going forward, slowing sales and rising inventory are likely to moderate home price growth to 8-10% by the end of the year.

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Inventory increased slightly from September, but has increased significantly (40.1%) since October 2021, when strong demand drove inventory to near-record lows. However, inventory is still relatively thin as the 14,370 properties sold are 20.9% below the five-year average. Unsold inventory was at 3.1 months of supply, below the breakeven point of 4-5 months of supply.

National Summary: According to the National Association of Realtors (NAR), existing home sales decreased 5.9% since September (seasonally adjusted annual rate), marking the ninth consecutive month of slowing sales activity. All four regions posted year-over-year declines, with home sales down 28.4% from the October 2021 pace.

The median sales price for all home types rose 6.6% year-over-year to $379,100, the 128th consecutive year-over-year increase. However, home prices have retreated slightly over the past four months from an all-time high of $413,800 in June.

Properties sold in an average of 21 days, two days slower than a year ago. Inventory is slowly rising from lows seen during the post-pandemic housing boom. The 1,220,000 quotas at the end of October represent a decrease of 0.8% with respect to September and from October 2021. The 3.3 months of supply in October exceeded the 3.1 in September and the 2.4 in a year ago

Lawrence Yun, NAR’s chief economist, said, “In October, more potential homebuyers were excluded from qualifying for a mortgage as mortgage rates rose. The impact is greatest in expensive areas of the country and in markets that have seen significant increases in house prices in recent years.”

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Yun said inventory remains tight and contributed to nearly a quarter of October listings selling above list price. He said, “”Inventory levels are still tight, so some homes for sale are still receiving multiple offers. In October, 24% of homes received above the asking price. Conversely, homes that remained on the market for more than 120 days saw their prices reduced by an average of 15.8%.

Cash sales accounted for 26% of all closed sales in October, up from 22% in September and 24% a year ago. Second home buyers and individual investors bought 16% of homes sold in October, up from 15% in September, but down from 17% a year ago.

Foreclosures and short sales accounted for approximately 1% of transactions in October, down from 2% in September and the same as a year ago.

Click here to view the full monthly report.

The Mobile Residential Monthly Report is developed in relation to Association of Real Estate Brokers of the Mobile Area to better serve consumers in the area.

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