MARCH 2011 HOUSING REPORT

SALES UP-DAYS ON MARKET DOWN- PENDING SALES UP
PRICES DOWN-GAS HIGHER

• 415 homes were sold in March versus 345 homes in February – A 20% increase from February, a slight decrease from 2010. March, April, May & June-2010 were the final months of the 1^st time Homebuyer tax credit.
• Average home prices fell sharply in March with the average price falling to $135,561 versus to $154,580 in February – a 12% decrease. Average sales price for 2010 was $150,845.00.
• The time it takes to sell a home fell to 101 days in March from 117 in February. Average time for 2010 was 100.
• Pending home sales spiked to 577 in March versus 456 in February. A 27% increase.
• Supply of available inventory creeped lower to 11.13 months versus to 12.66 months in February. Average supply for 2010 was 14.28 months. Total houses on market remained under 4,600.

“The Mobile housing market quickly shrugged off the EADS and Carnival announcements and kept making gains in March.  Sales up, inventory down, days on market down and pending sales way up. The pending sales number was the most impressive statistic from March. Pending sales are homes that are under contract pending closing. If the numbers follow through we have an opportunity to close over 500 homes in April. The last time the market closed over 500 homes was in July of 2008. 500 would be a major accomplishment but it will be different than in 2008. The average price per home in July of 2008 was $191,700 in March of 2011 it was $135,561.  At $135,000 per home the total volume of houses sold would be down almost 30 million dollars! While total sales are important sales across all price points are important for a healthy housing market. Mortgage Bankers are also reporting a significant increase in home loan applications. Lola Connert’s Mortgage America Real Estate Report-“Purchase applications for home loans increased 6.7 percent last week, reaching its highest level of the year, according to the Mortgage Bankers Association. The MBA reports that government loan applications reached their highest level since May 2010.” May of 2010 was the end of the 1^st Time Home Buyers Tax Credit, another big number. We will continue to keep an eye on the price of oil/gas, we believe that a sustained $4.00/gallon gas price will crush any possibility of an economic or housing recovery. Congratulations to Elaine Campbell on being our top sales agent for March and Linda Chamlee our top listing agent.” Tommy Praytor, President Praytor Realty

FEBRUARY 2011 HOUSING REPORT

SALES UP-PRICES UP-CAUTIOUS OPTIMISM
 

• 345 homes were sold in February versus 276 homes in January – A 25% increase from January, a 6% increase over last February.
• Average home prices rose sharply in February with the average price rising to $154,580 versus $136,051 in January – a 14% increase. Average sales price for 2010 was $150,845.00.
• The time it takes to sell a home fell to 117 days in February from 127 days in January. Average time for 2010 was 100.
• Pending home sales kept pace with January, 456 new in February compared to 441 in January.
• Supply of available inventory dropped sharply to 12.66 months in February versus  15.52 in January. Average supply for 2010 was 14.28 months. Total houses on market remained under 4,600.

“After a raucous Mardi Gras the beginning of Lent seems to be an appropriate time for this months housing report. February was another strong month in every category, sales up, price up, days on market down and supply of houses down. All in all a solid month and a bright start to the spring home selling season. So why the lent analogy? Recent events that were supposed to send Mobile’s economy soaring didn’t quite work out as planned. EADS not getting the tanker contract was a swift kick in the, well you know where. While we were down the proverbial bus/ship backed up over us as Carnival announced they were leaving Mobile. They say bad news comes in threes and the worst of the three over the near term is higher gas prices. While there were many contributing factors to the economic downturn, we point to $4.00 gallon gas as the final nail in the coffin. Our people are so dependent on gas that $4.00 gas just simply sucks every available dollar for discretionary spending out of the economy. To put it in perspective we received this oil consumption number from Scott Hunter at Raymond James: “The US consumes 21.7% of the world’s daily production of oil, more than double the 10.4% consumed by China.  The USA’s population is 311 million.  China’s population is 1.319 billion.” We’re not at $4.00 yet but gas is already a topic of conversation at the barbershop, our opinion is that gas needs to remain around the $3.00 mark for gas not be a factor in this economy. We believe our housing market is much like the Mardi Gras/Lenten season. We have a good little time the last couple of months and now we’re going to slow down a little, hopefully just for 40 days. Congratulation to Linda Chamlee on being our top agent in February.” Tommy Praytor, President Praytor Realty

JANUARY 2011 HOUSING REPORT

SALES OUTPACE EXPECTATIONS

INVENTORY DOWN AGAIN
 

• 276 homes were sold in January versus 331 homes in December – A 17% decrease from December, a 9% increase over last January.
• Average home prices fell sharply in January with the average falling to $136,051 versus $160,275 in December – a 15% decrease. Average sales price for 2010 was $150,845.00.
• The time it takes to sell a home rose to 128 days in January from 119 days in December. Average time for 2010 was 100.
• Pending home sales rose dramatically to 441 in January versus 330 in December- a 33% increase.
• Supply of available inventory rose to 15.52 in January versus 14.32 months in December. Average supply for 2010 was 14.28 months. Total houses on market fell again now under 4,600.

“The over under for January sales was 250, we projected sales to be between 260 and 270 that actual number was 276 exceeding expectations and we believe giving direction to the 2011 housing market. We believe sales will outpace 2010 by 5 to 10%, leaning more towards double digits than 5. The correction in the housing market will be small but noticeable. Consumer confidence is already shifting with the November elections and Austal’s new ship building contract. An airplane contract would obviously be a game changer to the plus side and another oil spill type issue would take us back to the down side. The number of homes on the market continues to drop, while the days on market of houses that are selling is going higher. The days on market number is climbing because we are clearing out old inventory that people have finally realized their pricing was too high. Pending home sales were up and that is to be expected on a seasonally adjusted basis December/January. A deeper look inside the Pending home number show that December2010/January2011 increase was up 33% versus a 27% increase December2009/January2010 and the 441 pending sales in 2011 is 18% higher than January Pending sales in 2010. January’s higher pending sales number points to a robust Spring selling season. Congratulations to Lora Parnell as Praytor Realty’s top selling agent in January and Thomas “Moose” Praytor as the top listing agent. We also want to welcome aboard Calvin Weaver, Jr. as the newest member of our team.” Tommy Praytor, President Praytor Realty

DECEMBER 2010 HOUSING REPORT

SALES FIRM-PRICE FIRM

INVENTORY DOWN AGAIN
 

• 331 homes were sold in December versus 318 homes in November – A 4% increase from November.
• Average home prices rose again in December with the average price climbing to $160,660 versus $159,180 in November – a 1% increase. Average sales price for 2009 was $157,935.00.
• The time it takes to sell a home remained flat at 119 days in December. Average time for 2009 was 93.2.
• Pending home sales fell to 330 in December versus 354 in November- an 7% decrease.
• Supply of available inventory fell to 14.32 months in December versus 15.82 in November. Average supply for 2009 was 14.25 months. Total houses on market fell again now under 4,800.

“December was a solid end to a wild and not so well oiled real estate year along the Gulf Coast. Sales remained stable and the average sold price kept climbing. If there was a negative from the December number, it was the pending homes sold were down again. Pending sales in December are the sold’s we’ll be talking about in January. The last 2 years, January has been the worst month of the year for sales and the market builds all year long after starting at the bottom. With the BCS Championship game Monday night we’ll use a football term to determine what we’re looking for in January. The over under for January sales is 250. Under 250 and we’re up the proverbial creek without paddle or boat. 250-300 means we’ve maintained the momentum the market has been picking up since the BP rig was plugged.  Over 300 and we could be on to something special. We believe the number will be between 250-300 and more specifically in the 260-270 range. Pieces of the housing puzzle are coming together for the Mobile area and we are working on a year in review housing report along with what we see for 2011. Congratulations to Elaine Campbell on being Praytor Realty’s top agent in December.” Tommy Praytor, President Praytor Realty

NOVEMBER 2010 HOUSING REPORT

SALES STABLE-PRICES UP DRAMATICALLY

INVENTORY UNDER 5,000 IN ALMOST 3 YEARS!

• 318 homes were sold in November versus 314 homes in October – A 1% increase from October. Last year October to November sales were down 20%!
• Average home prices rose dramatically in November with the average price climbing to $159,180 versus $142,823 in October – a 11% increase. Average sales price for 2009 was $157,935.00.
• The time it takes to sell a home rose to 119 days in November versus 93 in October- a28% increase. Average time for 2009 was 93.2.
• Pending home sales fell to 354 in November versus 399 in October- an 11% decrease.
• Supply of available inventory remained flat at 15.82 months in November versus 15.71 in October. Average supply for 2009 was 14.25 months. Total houses on market fell under 5,000 for the first time in 2010!

“After months of really rough housing news the market is starting to show signs of life. As we often say, one month doesn’t make a trend but November bucked a seasonally downward trend that resulted in a 20% drop in sales last year. Not only did sales keep pace with October the average sales price jumped 11%. Some of the increase can be attributed to some larger homes selling but the percentage of sales over $200,000 increased while the percentage of the market represented by foreclosures decreased. The biggest news in the November numbers is the reduction of inventory to 4,994 houses on the market. This is the first time we’ve had less than 5,000 houses on the market since February, 2008. Reducing inventory will be a significant factor in increasing demand and moving prices higher. We have been saying for months the next game changer in housing would be the November elections. The extensions of the Bush tax cuts coupled with the extension in unemployment benefits sends a solid message to the country that some balance is returning to Washington. Our country works better when both parties have to work together to get things done. We believe the next game changer will be interest rates. Rates are already up more than half a point in the last 30 days as bond markets are concerned over the possibility of rising inflation. We wish everyone a very happy and safe holiday season!” Tommy Praytor, President Praytor Realty

iSEPTEMBER 2010 HOUSING REPORT

iSALES FLAT-PRICES DOWN

hTIME TO SELL DOWN

iFORECLOSURES UP TO 39% OF THE MARKET
 

• 333 homes were sold in September versus 329 homes in August – A 1% increase from August.
• Average home prices fell in September with the average price falling to $143,588 versus $149,472 in August – a 4% decrease. Average sales price for 2009 was $157,935.00.
• The time it takes to sell a home fell to 97 days in September versus 111 in August- a 13% decrease. Average time for 2009 was 93.2.
• Pending home sales fell to 413 in September versus 460 in August, 449 in July, 404 in June and 335 in May.
• Supply of available inventory remained flat at 16.40 months in September versus 16.85 in August. Average supply for 2009 was 14.25 months.

“It doesn’t take a rocket scientist to see we’re in a tough market. Looking inside the numbers there is one segment of the market that is moving briskly, foreclosures. The percentage of total sales that were foreclosures jumped from 31% to 39% in September. More importantly foreclosures are 39% of sales but represent only 8% of the homes listed. We basically only have a 90 day supply of houses that are foreclosures, a very healthy market. The flip side of that coin is not very good, homes that are not foreclosures. In September only 208 homes sold that were not foreclosures and we have 4,780 non-foreclosed homes on the market.  Divide 4,780 by 208 sales and that equals a 23 month supply of homes, 23 MONTHS! So what’s the take away? IT’S THE PRICE! Foreclosures are selling while nothing else is because asset managers have been told to sell. Every 30-45 days prices are reduced until the house sells. In this market if the house is not perceived as a deal or absolutely move in perfect it’s going to sit. The good news is if your moving inside the market you’re going to pay less and the interest rate your going to pay is cheaper than at any other time in history.” Tommy Praytor, President Praytor Realty

AUGUST PENDING SALES RISE SLIGHTLY

SALES DOWN-PRICES DOWN-TIME UP

FORECLOSURES REMAIN 31% OF THE MARKET
 

• 329 homes were sold in August versus 366 homes July – A 10% decrease from July.
• Average home prices fell in August with the average price falling to $149,472 versus $150,883 in July – a 1% decrease. Average sales price for 2009 was $157,935.00.
• The time it takes to sell a home rose to 111 days in August versus 101 in July- a 10% increase. Average time for 2009 was 93.2.
• Pending home sales rose to 460 in August versus 449 in July, 404 in June and 335 in May.
• Supply of available inventory rose again to 16.85 months in August versus 15.52 in July. Average supply for 2009 was 14.25 months.

Closed sales continued lower in August but we are expecting September to reverse that trend for several reasons. Pending sales hit a bottom after the expiration of the homebuyer tax credit and have been climbing every month since. September is the first month we should see the higher pending sales starting to close. August pending sales were up again over July and those sales should carry forward to October.  For a little extra pop, September is the final month to close the contracts made during the tax credit and still get the tax credit. The near term in housing appears to be solid. Despite Moody’s recent downward forecast for the Mobile economy the freshest numbers prove the economy is improving. The USA Center for Real Estate Studies Mobile Business Activity Index increased again in June after an increase in May. Additionally, 1200 new workers were added to the workforce in the same period. USA’s Dr. Don Epley takes issue with the Moody forecast and we agree with his assessment. Real time numbers show our economy is improving slightly, the spill has produced a huge infusion of cash and labor opportunities into the market. Not only does the near term in housing look good so does the near term in the overall Mobile economy. On Wednesday, Sheila Bair, Chairperson, of the FDIC will headline the Coastal Economic Outlook here in Mobile as a host of national experts descend on Mobile. Ahead of the conference, looking forward into 2011, big questions still need to be answered. I believe with the tanker announcement being pushed to next year and absent a hurricane, the next big game changer will be the November elections. A Republican House or Senate will bring some balance back to Washington and that balance could be the impudence business needs to start hiring and investing.” Tommy Praytor, President Praytor Realty

MID YEAR REPORT

JUNE CLOSINGS ADD TO MAY GAINS

PENDING SALES REBOUND

COASTAL PROPERTIES SLIMED

FORECLOSURES 25% OF THE MARKET

 

• 492 homes were sold in June versus 480 homes May – A 3% increase over May and 94%  increase over January.
• Average home rose in June with the average price rising to $156,177 versus $151,135 in May – a 2% increase. Average sales price for 2009 was $157,935.00.
• The time it takes to sell a home remained constant at 95 days in June. Average time for 2009 was 93.2.
• Supply of available inventory remained flat at 11.52 months in June. Average supply for 2009 was 14.25 months.

SUPPLY: The supply of houses in the Mobile/Baldwin area remain extremely high. A 6-month supply is a good market, we’re over 11-months and have been higher. 5,500 houses with an average days on market at 126 is just too many. Half Empty.

FORECLOSURES-DISTRESSED PROPERTY: Foreclosures and distressed (short sale) properties are the buzz in the market. In June, foreclosures were 25% of all homes sold versus 6% in June of 2005. While foreclosures represent one-fourth of the homes sold only 1 out of 10 homes listed fall into this category. So 10% of the market is producing 25% of the sales. Half Empty.

BP: It will be years if not decades before we know the full effects of the BP disaster but as the spill approaches the 90 day mark some of the short term economic ripple effects are becoming evident. Like all other disasters on the coast, money is pouring in to overcome it's effect. Almost every sector of the economy not related directly to the water is getting a boost. Commercial real estate, hotels (non coastal), car rentals, car sales, construction, apartments, and many more have all experienced positive effects. The outside cash flowing into the coast will pump up the local economy over the near term, 6 months to 1 year, and by the end of the year if not sooner we will see a positive ripple effect on housing. While covered in oil this part of the BP disaster is adding water to the glass. If you want to drain the glass all the way empty just talk to Realtors who made their living from coastal properties. Their stories of 80- 90% cancellations in the days after the spill are just the tip of the iceberg that will sink the BP ship. No tourist, no vacation rentals, no restaurants, no groceries, no drinks, no gas, no boats, the ripple effects are unending. The Summer is the time for our coastal communities to store up for the lean winter months. Instead of storing up they are struggling to stay open. If they are struggling to stay open now think about where they will be in December, January and February. As it purely relates to real estate, thousands of condo owners use their Summer rentals to pay their mortgage payments for the year, no tourist no rent. How long will they last before a wave of BP forced foreclosures roll in across the coast? Start multiplying this effect to everyone who has anything to do with the coastal tourism business. Do the same exercise for the seafood industry and others effected by the spill and it gets pretty ugly. Frankly 20 billion is not near enough and it should be a slap in the face to those on the coast affected by the spill. To put it in historical perspective lets look back at Katrina. For a 1 day event State Farm paid $9 billion in claims. That was one company, for one day, $9 billion. BP is responsible for everyone’s claim, not just for 1 day, not just until they get it capped, not just until they get it cleaned up, they are on the hook for everyone until tourism and seafood return to their pre-spill levels. Back to lessons from Katrina, New Orleans is not back to pre-Katrina levels and it’s 5 years later. So how deep is the BP hole? Let’s go back to Katrina again, the Federal Government spent approximately $200 billion. $200 billion and they weren’t responsible for EVERYBODY. But $200 billion would bankrupt BP, exactly. One of two things and maybe both is getting ready to happen, BP as we know it will not survive or whole bunch of folks are getting ready to get screwed. BP is working on selling off assets and looking for equity partners, that’s a good sign for the coast because they need the cash. On the other hand we have reports from the Realtor committee dealing with BP they have put non-rental real estate claims on hold. Either way you look at it appears BP realizes it needs cash and lots of it. Did I drain your glass? While the numbers look bad, there is a part of the equation I’ve left out, something you can’t put a number on, the people of the Gulf Coast. Rebuilding from disasters is a way of life on the Coast and it is our people that I believe will fill the glass back up.” Tommy Praytor, President, Praytor Realty, Co., Inc.

MAY SALES KEEP PACE-TROUBLE BREWING

• 480 homes were sold in May versus 465 homes April – A 3% increase over April and 90%  increase over January.
• Average home prices fell sharply in May with the average price falling to $151,135 Versus $168,601 in April – a 10.4% decrease. Average sales price for 2009 was $157,935.00.
• The time it takes to sell a home dropped 1 day to 95 days in May versus 96 in April- a 1% decrease.  Average time for 2009 was 93.2.
• Supply of available inventory fell to 11.49 months in May versus 11.65 in April. – a 1% decrease. Average supply for 2009 was 14.25 months.

“May closings kept pace with April and even added a little, we expect closings to continue to be strong through June. Buyers trying to take advantage of the tax credit must close by the end of June. There may be some carry forward to July with closings that didn’t make the deadline but after that the picture gets a little murky. We have been tracking pending sales, a pending sale is when a contract is accepted but not closed, by month. Pending sales normally take 30-60 days to close, what goes in pending this month is a good indicator as to what will close 30-60 days from now. In the month of May pending sales tumbled 46% from April. We expected some fall off after the end of the tax credit but almost half is a drastic reduction. This level of pending sales would indicate closed sales in July would be in the 300 area versus 480 in May. Additionally, we will lose contracts already in the pipeline because of the new Fannie Mae regulation that effectively eliminates FHA or VA financing on Fannie Mae foreclosures with the right of redemption outstanding. To put the icing on the negative cake, Realtors working coastal properties are already reporting losing contracts to the oil spill and the forecast for a market that was just coming off life support is back in ICU. The financial effects to employment in the recreation and seafood industry are devastating. But as they say, one persons disaster is another persons opportunity. If there is hope for this market over the short term it appears to be bubbling up out of the Gulf of Mexico. BP and the people who are coming to work the spill are spending money. BP has already purchased an office building on Michael and Downtowner, $2.4 million, and has leased 40,000 square feet at Brookley at a short-term rate that was almost double the normal market rate. Hotels are reporting higher occupancy rates while apartment managers are seeing increased rentals from companies and individuals that are here to support BP. While home sales have not yet seen a ripple effect from the spill, the single-family rental market is brisk. By the end of the year, if not sooner, the increased employment and money being spent in the area from the spill will put Buyers back in the market. Since they can’t seem to clog a pipe in 2 months, it would appear that the people looking for short-term housing will be here for some time. As a point of reference the Ixotoc spill in the Gulf of Mexico in 1979 took 290 days to stop and it was only in 500 feet of water. The jury is still out on the long-term effects from the spill. How long will it take Buyers and Renters not to see the oil on the beaches long after it’s gone? How long will it be before diners see “Gulf Shrimp” on a menu as a delicacy again? How long can BP foot the bill for this disaster?.” Tommy Praytor, President, Praytor Realty, Co., Inc.
 

FEBRUARY SALES UP 24%

PRICES DROP TO BELOW KATRINA LEVELS

 

• 311 homes were sold in February versus 251 in January – A 24% increase over January. February 2009 Sales 322 homes.
• Average home prices declined in February again with the average price declining to $141,788 versus $144,736 in January- a 2% decrease. Average sales price for 2009 was $157,935.00.
• The time it takes to sell a home rose 16 days to 100 days in February versus 84 in Januray- a 19% increase.  Average time for 2009 was 93.2.
• Supply of available inventory fell seasonally in February. At the end of February there was a 16.76 months supply of homes, in January it was 20.33 – an 18% decrease. Average supply for 2009 was 14.25 months.

JANUARY 2010 HOME SALES KEEP PACE WITH 2009

NUMBER OF HOMES ON MARKET DECLINE

• 249 homes were sold in January versus 346 in December – A 28% decrease from December-however an 8% increase over January 2009.
• Average home declined in January with the average price declining to $144,736 versus $158,090 in December- an 8% decrease. Average sales price for 2009 was $157,935.00.
• The time it takes to sell a home dropped 8 days to 83 days in January versus 91 in December- a 7% decrease.  Average time for 2009 was 93.2.
• Supply of available inventory rose sharply in January. At the end of January there was a 20.38 months supply of homes, in December it was 14.86 – a 27% increase. Average supply for 2009 was 14.25 months.

“As expected January home sales were off significantly from December. The seasonal drop from December to January has become a regular occurrence on the Gulf Coast. However, this year’s drop was less than last years and January, 2010 sales were 8% higher than January, 2009. January, 2010 sales mark the 4^th consecutive month that home sales were higher than the previous year. Our research indicates the last time this happened was during the Katrina era. With the homebuyer tax credit expiring on April 30^th, the market over the near term would seem to have room for growth. February closed sales could be affected by the extreme weather conditions of late December and early January. The average home price declined in December with the follow through closings of first time homebuyers. Sellers are still averaging close to 95% of their list price, which indicates less expensive homes are selling. With the new existing homeowner tax credit in place we expect the average sales price to move higher in 2010. In November of 2009 83% of the homes sold were under $200,000, in January it was down to 78%. If that trend continues we could finally be seeing some move ups in the market. Available inventory was a mixed bag in January; we’re up to a 20.38-month supply of homes, which is a direct correlation to the lower number of sales in January. The good news there is we reduced the number of listings in the system by almost 300 homes. We are still holding with the idea that sales will start soft in 2010 and build forward.” Tommy Praytor, President, Praytor Realty, Co., Inc.