Mobile-area days on market hits record low in May
Sales: According to the Mobile Area Association of REALTORS, May home sales in the area increased 26.7% year-over-year (Y/Y) from 423 to 536 closed transactions, marking 12 consecutive months of Y/Y gains. Sales increased 4.3% from April. Sales are now up 19.7% year-to-date. Two more resources to review: Quarterly Report and Annual Report.
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Inventory: Homes listed for sale decreased 46.5% from 874 listings one year ago to 468 in May. Months of supply dropped from 2.1 to 0.9, reflecting a market where sellers generally have elevated bargaining power.
Pricing: The median sales price in May was $214,400, a record high and an increase of 28.8% from one year ago and an increase of 12.8% from April. The differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.
Homes sold in May averaged 22 days on the market (DOM), a record low and 27 days faster than May 2020.
Forecast: May sales were 13 units, or 2.5%, above the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 523 sales for the month, while actual sales were 536 units. ACRE forecast a total of 2,281 residential sales year-to-date, while there were 2,366 actual sales through May, a difference of 3.7%.
New Construction: The 45 new homes sold represent 8.4% of all residential sales in the area in May. Total sales increased 45.2% year-over-year. The median sales price in May was $278,900, an increase of 23.5% from one year ago and a decrease of 5.4% from April.
NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide decreased for the fourth consecutive month in April, falling 0.9% from April (seasonally adjusted annual rate). However, sales did increase 44.6% year-over-year. The median sales price for existing homes hit another historic high ($350,300), rising 23.6% year-over-year, also a record gain. Rising home prices are largely a result of extremely low housing inventory amid significantly elevated demand. The 1.23 million units listed for sale represent a decline of 20.6% year-over-year, resulting in 2.5 months of supply (4.8 in May 2020).
Lawrence Yun, chief economist for NAR said, "Home sales fell moderately in May and are now approaching pre-pandemic activity. Lack of inventory continues to be the overwhelming factor holding back home sales, but falling affordability is simply squeezing some first-time buyers out of the market.”
Yun added that the market outlook is encouraging: “Supply is expected to improve, which will give buyers more options and help tamp down record-high asking prices for existing homes.”
ACRE commentary: Home sales in Alabama increased year-over-year (Y/Y) for the 12th consecutive month in May, rising 27.6%.The growth rate in home sales was higher than usual due to the pandemic-related lockdowns of May 2020. Home sales prices continue to rise but at slower rates, even amid record-low inventory. The statewide median sales price gained 11.6% Y/Y in May while it averaged 13% from January-April 2021 and 13.8% from June-December 2020. Housing inventory in the state continued to tighten, reaching another record low of 9,363 listings across the state in May, a decrease of 2.3% from April and down 45.1% from one year ago.
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The Mobile Residential Monthly Report is developed in connection with the Mobile Area Association of Realtors to better serve area consumers.
Editor's Note: All information in this article reflects data provided to the Alabama Center for Real Estate for the time period May 1 - 31, 2021. Thus, the performance represented is historical and should not be used as an indicator of future results.