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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.
“We’ve reached the halfway point of
2010 and on the surface it would appear the glass is half full but like the
Gulf there is a lot going on under the surface we can’t see yet. Closed
sales continue to out perform 2009 and with the extension of the closing
deadline for first time homebuyers the near term appears moving in the
forward direction, Half Full. After taking a dive in May, pending sales
rebounded sharply, not to pre-tax credit levels but solid, Half Full. USA’s
Dr, Don Epley will send out a report this week that employment in the Mobile
area grew by 1,000 full time jobs before the spill, Half Full. That’s 3
pretty good halves shouldn’t the glass be overflowing? While we’re pouring
water in our glass we have a few leaks:
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.
By my count that’s gets us back to
halfway-Half Full or Half Empty. That bring us to the 400 pound guerilla in
the room that everyone is talking about but not really sure what to do with,
BP.
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.
PRICES JUMP 12.7% IN APRIL
APRIL
SALES ADD TO MARCH GAINS
-
465 homes were sold in April versus
435 in March – A 7% increase over March and 85% increase over
January.
-
Average home prices rose sharply
in April with the average price rising to $162,360 Versus $144,049
in March – a 12.7% increase. Average sales price for 2009
was $157,935.00.
-
The time it takes to sell a home
dropped 3 days to 96 days in April versus 99 in March- a 3%
decrease.
Average time for 2009 was 93.2.
-
Supply of available inventory fell
to 11.74 months in April versus 12.11 in March. – a 2% decrease.
Average supply for 2009 was 14.25
months.
“Sales were up again in
April after a huge gain in March. We should see solid sales throughout
the next 60 days as homebuyers close on contracts initiated during the
tax credit period. We’ll be keeping an eye on homes going under contract
for the next 60 days as an indicator of where the market is headed post
tax credit. The biggest change in April were home sales over $200,000.
The over $200,000 share of the market has been hovering around 20% for
some time. In April the over $200,000 market rebounded claiming 32% of
the 465 homes that were sold. The market still has a way to go to reach
the more than 40% level of 3 years ago but April was the first
significant improvement in this area in some time. As we always say, one
month doesn’t make a trend but the over $200,000 market is a key to a
healthy housing market. Most areas showed signs of improvement with
Springhill, Cottage Hill and Daphne/Montrose posting 50% gains in April.
On the negative side of the ledger the supply issue is not getting any
better. Last month we brought forward the idea that all economic sectors
needed to be positive in order to have a healthy housing market. The
recent volatility in the stock market is an area of concern to housing,
we believe a solid stock market is a key to a solid housing market.
Locally, the oil spill has created serious question marks for the beach
market and the sectors that rely on the seafood industry. There is no
question that the oil disaster will leave it’s mark on the Gulf Coast,
just as other disasters, Frederick, Ivan, Katrina have before it. While
we are all familiar with the economic impact of a hurricane, an oil
spill will be different because the oil spill did not effect everyone
directly. Everybody didn’t lose power, have shingles ripped off and
trees down. This disaster has only directly effected those on the water
or those who rely on the water to make a living. The rest of us went to
work this morning just like we did 3 weeks ago. However, over the short
term we are already seeing a positive economic impact, hotel occupancy
rates are reporting higher and there have been numerous commercial
prospects in the market. It appears the clean up will take months if not
years to complete with workers and equipment needed which should help
spur employment over the near term. Last month I said a rising tide
raises all boats, the jury is still out if a brown tide will too.” Tommy
Praytor, President, Praytor Realty, Co., Inc.
MARCH SALES UP
40%!!!!!!
PRICES SHOW IMPROVEMENT
-
435 homes were sold in
March versus 311 homes in February – A 40%
increase over February and 73% increase over
January.
-
Average home
prices rose in March with the average price rising
to $144,049 versus $141,788 in February- a 1.5%
increase. Average sales price for 2009 was
$157,935.00.
-
The time it takes
to sell a home dropped 1 day to 99 days in March
versus 100 in February- a 1% decrease.
Average time for 2009
was 93.2.
-
Supply of
available inventory fell to 12.11 months in March
versus 16.23 in February. – a 25% decrease.
Average supply for
2009 was 14.25 months.
“Sales were up 40% in March, 40%! We expected sales to
climb as we get closer to the expiration of the tax
incentives but 435 homes in March is a big number. Most
areas had gains but of significant note every area of
Baldwin County had higher sales, every area. One month
doesn’t make a trend but we all know what happens when
Baldwin County gets hot. In addition to strong sales in
March in Mobile and Baldwin County, Fannie Mae released
a survey on Tuesday that 64% of Americans think that now
is a good time to buy a home. Pretty significant,
considering the same survey in 2003, during the go-go
years, was just 2 points higher at 66%. All begging the
question who’s driving the economy? Stock Market? Real
estate? Jobs? Those answers are for academicians and
economist but from the street it appears that a rising
tide is raising all boats. The stock market is close to
11,000, job loss is down and the real estate market is
showing signs that it has the potential to continue to
move higher. Don’t break out the champagne just yet;
there are still significant issues to overcome in the
real estate market. Most prognosticators are foreseeing
another big wave of foreclosures, I disagree. The
proactive stance lenders are taking on short sales,
letting a homeowner sell for less than they owe on it,
we believe will head off a significant number of
foreclosures. There is also an issue of supply; we have
way too many houses on the market, over 5,000. Inside of
the supply number is another nagging issue, houses over
$200,000 aren’t selling. When people with money start
spending again everything will get better. It should be
obvious to everyone that the real estate market and our
economy cannot improve without every segment of the real
estate market participating in the recovery. A rising
tide raises all boats.” 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.
“Sales rose 24%
in February, close to a normal increase from January to February. However,
February broke the 4-month string of increases in monthly sales over
previous years. As we talked about last month we believe that the harsh
weather at the end of December and first part of January did hurt February
closed sales. While sales did not continue the 4-month string of increases
there appears to be increased activity in February and early March. In
addition to the monthly sales being lower than last year, the average sales
price dropped to $141,788. The average home sales price is now lower than
pre-Katrina levels. In the last year we have attributed the lower prices to
the first time homebuyer tax credit. While the first time homebuyer tax
credit is still a significant driver in our market, in the last couple of
months we’ve noticed that the percentage of the sales price compared to the
list price has been dropping and is now under 94%. The trend suggests homes
that have been on the market for long periods of time are now selling at
significantly reduced prices. As we head into the expiration of the first
time homebuyer tax credit, sales should continue to climb over the first
half of 2010. Of course Ray Charles could see that coming. The tougher
question is what happens to the market in the second half of the year with
no tax credit. We see cautious optimism amongst every sector we’ve talked
to. In short the momentum building in the first half of 2010 will carry
forward. However, we have yet to canvas any sector that sees a rapid
rebound.”
Tommy Praytor, President, Praytor Realty, Co., Inc.
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 4th
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 30th, 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.
PRICES
JUMP IN DECEMBER
SALES
REMAIN SOLID
NUMBER OF
HOMES ON MARKET DECLINE
346 homes were sold in December versus
344 in November – Flat
for the month and up 49.6% since
January!
Average home prices rose sharply in
December with the average price rising to $158,090 versus $148,841
in November- a 6% increase. Average sales price for the
year $158,090.00.
The time it takes to sell a home rose 5
days to 91 days in December versus 86 in November- a 7% increase.
Average time for the year is 93.2.
Supply of available inventory remained
the same in December. At the end of November there was a 15.66
months supply of homes, in December it was 15.20 – virtually
unchanged.
Average supply for the year is 14.17
months.
“After an
unexpected drop in sales in November we were braced for the worst in
December. However, sales remained firm and the average priced home
spiked 6%. With the expanding use of the first time homebuyer tax credit
average sale prices have been dropping since June. The credit was set to
expire in November and was extended to 2010. We believe the extension
took some of the steam out of the market allowing November closings to
roll over to December. Following that logic through, December sales
could have been artificially higher, couple this with a traditional
seasonal drop in sales in January and we are forecasting January sales
to be lower. The market remained under $200,000 in December with most
areas sales remaining unchanged. Significant moving areas in December;
Cottage Hill, Theodore and Montrose were notable on the downside,
Central Baldwin, Gulf Shores and Springhill led the upside. Praytor
Realty led all companies with listings sold in the Springhill area with
Sullins Arendall leading our sales in December. National and local
economic news continue to improve pointing towards a solid year in 2010.
That having been said, unseasonably cold temperatures starting the new
year coupled with a traditional seasonal drop in sales in January we are
expecting 2010 to start soft and build forward.”
Tommy Praytor,
President, Praytor Realty, Co., Inc.
HOME SALES
TUMBLE IN NOVEMBER
LOWER
PRICED HOMES CONTINUE TO SELL
NUMBER OF
HOMES ON MARKET DECLINE
344 homes were sold in November versus
427 in September – Off 19.4%
for the month and up 49.6% since
January!
Average home prices continued to
decline in November with the average price in November dropping to
$148,841 versus $154,109 in September- a 3% decrease.
Average sales price for the year $158,075.00.
The time it takes to sell a home fell 3
days to 86 days in October versus 89 in September- a 3% decrease.
Average time for the year is 93.5.
Supply of available inventory rose
dramatically in November. At the end of October there was a 12.53
months supply of homes, that number changed to 15.66 months in
November – an increase of 25%.
Average supply for the year is 14.18
months.
“Sales fell
dramatically in November with only 344 homes sold in November versus 427
in October a 19.4% drop. The drop in sales was a surprise considering
the momentum the market had built up over the Summer. The extension of
the first time homebuyer tax credit may have taken some of the urgency
out of the market in November that we hope will roll over to December
and the following months. In addition to fewer homes being sold the
trend continued to lower priced homes and sales prices were lower again
by 3%. While prices were lower, Sellers did average getting over 96% of
the list price for the homes that sold. This would indicate that prices
are not dropping but less expensive homes are selling. The market still
remains under $200,000 with 83% of all the homes sold under $200,000.
The supply of available inventory rose drastically, up 25% in one month!
This rate is tied to the number of homes sold, so with fewer homes sold
the supply went way up. On a positive note we did see the total number
of homes on the market come down slightly. The areas of the market hit
the hardest were the areas that had been selling the most homes,
Midtown, Municipal Park, Cottage Hill, West Mobile and Semmes.
Daphne/Montrose was the only area that really experienced a rise in
sales in November. Traditionally, December is a slow month and after the
unexpected drop in sales in November we could close out the year on a
weak note. The one real positive to November’s sales is that November
2009 out paced November 2008. This is the second month in a row that
home sales in 2009 were higher than 2008 ”
Tommy Praytor,
President, Praytor Realty, Co., Inc.
SEPTEMBER
HOME SALES JUMP 6%
HOME
PRICES DROP 4.2%
-
429 homes were sold in September
versus 403 in August –
a 6% increase for the month and up 91%
since January!
-
Average home prices posted a loss in
September with the average price in September dropping to $158,533
versus $165,587 in August- a 4.2% decrease. Average sales
price for the year $159,627.00.
-
The time it takes to sell a home rose 8
days to 95 days in September versus 87 in August- a 9% increase.
Average time for the year is 94.7.
-
Supply of available inventory
decreased in September. At the end of August there was a 13.22
months supply of homes, that number decreased to 12.34 months in
September – a 7% decrease.
Average supply for the year is 14.22
months.
“After the
expected drop in sales in August, September was a critical month to
gauge the health of the short term housing market. In 2008 September did
not make a gain over August and over the next 6 months sales dropped
over 50%. A nice 6% rise in sales in September point to a continued move
upward over the near term. The $8,000 1st time homeowner tax
credit has been a catalyst in this market with over 20,000 Alabamians
already having claimed the credit. When the final total on this program
is tallied up we expect this number to be significantly higher. Timing
on this credit will be critical as to what happens to our market for the
remainder of 2009. The official end date is November 30th.
Congress is being lobbied hard by the Realtors to extend the credit. No
extension and the under $200,000 market will be on fire for the next 2
months then tailing off in December and flat in the first quarter of
2010. An extension will take a little steam off the short term but
should extend the viability of the under $200,000 market through the
middle of next year. To illustrate where the under $200,000 market is
right now, there is only a 9 month supply compared to 24 months for over
$200,000, 36 months over $300,000 and 43 months over $500,000. After
going up every month this year the number of houses on the market went
down, not much but it did go down. The extension or the non extension of
the First time homebuyers tax credit will have a great deal of influence
over the near term housing market. Municipal Park, Cottage Hill South,
Semmes and Daphne/Montrose/Spanish Fort all experienced a 50% or better
increase in sales in September. ”
Tommy Praytor, President, Praytor
Realty, Co., Inc.
BACK TO
SCHOOL HURTS HOME SALES
AUGUST
HOME SALES DOWN 10%
HOME
PRICES UP 2.4%
-
403 homes were sold in August versus
447 in June – a
10% decrease for the month and up 79% since January.
Average home prices posted a slight
gain in August with the average price in August rising to $165,587
versus $161,725 in July- a 2.4% increase.
The time it takes to sell a home
dropped 9 days to 87 days in August versus 96 in August- a 9%
decrease.
Supply of available inventory
increased in August. At the end of July there was a 11.88 months
supply of homes, that number increased to 13.21 months in August -
an 11% increase.
“As expected,
back to school took it’s toll on home sales with sales in August
dropping 10% to 403 homes. The 2009 August decrease of 10% was
significantly less than 2007, off 14% and 2008, off 13.5%. The market
remained firmly under $200,000 with 78% of the homes sold under
$200,000. The briskness of the under $200,000 market is confirmed not
just by the total volume sold but also by the number of homes sold out
of the homes listed. 1 out of 10 homes listed under $200,000 sold in
August versus 1 out of 26 homes over $200,000. Additionally, homes under
$200,000 represented 78% of all sales in August while they represent
only 56% of the homes listed. We expect the under $200,000 market to
continue to be brisk and tighten as we get closer to the expiration of
the $8,000 first time homebuyer tax credit. Average home prices rose
slightly in August and they should remain in the $160,000-$170,000
through the expiration of the $8,000 first time homebuyer tax credit and
the remainder of the year. While the total number of homes on the market
have remained level over the last few months, the supply of homes rose
sharply from 11.88 months in July to 13.21 in August. The dip in sales
pushed this number higher in August and a return to pre-back to school
sales will reduce this number significantly. In conclusion, the dip in
August home sales came in on the lower end of the traditional 10-15%
range estimated last month, pointing towards a stable sales growth for
the remainder of 2009. The sluggishness of the market over $200,000 and
the total number of homes on the market will continue to weigh on the
Mobile market.”
Tommy Praytor, President, Praytor
Realty, Co., Inc.
JULY
FIREWORKS SPARK SALES
JULY HOME
SALES UP 9%
WHILE HOME
PRICES FELL 6.5%
-
447 homes were sold in July versus 409
in June – a 9%
increase for the month and up 98% since January!
Average home prices posted a
significant loss in July with the average price in June dropping to
$161,725 versus $173,011 in June- a 6.5% decrease.
The time it takes to sell a home rose 4
days to 96 days in July versus 92 in June- a 4% increase.
Supply of available inventory
decreased in July. At the end of June there was a 12.88 months
supply of homes, that number declined to 11.88 months in July -
a 7.8% decrease.
“After a step
back in June the Mobile housing market exploded again in July with a 9%
increase and the highest monthly sale of homes since September of last
year. The rest of the numbers in this months report need a deeper look
than just the number it self. Average home prices declined sharply in
July. Normally this would be cause for concern but we are still feeling
the first time home buyer effect as first time buyers take advantage of
the $8,000 tax break. Earlier in the year we forecasted that increased
usage of the program would increase sales but would be a drag on prices,
first time buyers are usually buying less expensive homes. The fact that
sale prices are 95.63% of the list price proves market pricing is
remaining firm. The fact is less expensive homes, under $200,000, are
what is selling. The time to sell rose because of 2 issues, the
increasing tightness in the under $200,000 market, buyers are having to
go to homes that have been listed longer to find a home. The other
factor is people who have had their homes on the market for some time
are lowering prices to sell their home. Price reductions work but are
normally done after the home has been on the market for some time.
Therefore when the home sells, its days on market is longer than what it
would have been if price properly at the time it was listed. Another
notable is that for the first time this year the number of homes on the
market fell, not much but it did go down after climbing every month this
year. While sales news was good in July there is a traditional fall off
of sales in August of 10-15 percent. If the Mobile market can buck this
trend in August it could set the stage for a very active fall.”
Tommy Praytor, President, Praytor
Realty, Co., Inc.
HEAT COOLS
HOME SALES
JUNE HOME
SALES OFF 2%
HOME PRICES UP
2.5% IN JUNE
409 homes were sold in June versus 419 in
May – a 2% increase
for the month and still up 80% since January!
Average home prices posted another solid
gain with the average price in June climbing to $173,011 versus $172,587
in May- a 2.5% increase.
The time it takes to sell a home fell 5
days to 92 days in June versus 97 in May- a 5% decrease.
Supply of available inventory increased in
June. At the end of May there was a 12.69 months supply of homes, that
number rose to 12.88 months in June - a 2% decrease.
"For the first
time in 2009 the Mobile market did not sell more homes than the previous
month. Realtors and homebuyers alike cited the oppressive heat during the
month of June for lethargic home sales. Outside of the heat a slight up-tick
in rates in the front of the month combined with a growing inventory of
available homes are contributors to the lower June sales number. The days it
took to sell a home fell by 5% in June down to 92 days while available
inventory increased. This trend would confirm the importance of the original
list price on selling a home. We’re finding that properly priced homes sell
quickly, under 90 days, while homes that are priced too high sit and sit and
sit. Additionally, homes that are priced too high originally are eventually
selling below the price it could have sold for if it had been priced
properly in the beginning. When homebuyers look at homes that have been on
the market for a long time, their original offer is at a significant
discount to the list price. The growing inventory of available homes
continues to be a dark cloud on the areas housing market. Rates as well as
temperatures are lower as we start July.”
Tommy Praytor, President, Praytor Realty,
Co., Inc.
HOME PRICES SOAR 13% IN
MAY
MAY HOME SALES KEEP
PACE-UP 8%
LARGE HOMES DRIVE MAY
MARKET
-
419 homes were sold in May versus 386 in
April – an 8%
increase for the month and 86% since January!
-
Average home
prices soared as larger homes started to sell in May, the average priced
home in May was $172,587 versus $152,519 in April- a 13% increase.
-
The time it
takes to sell a home rose 2 days to 97 days in May versus 95 in March-
a 2% increase.
-
Supply of available inventory decreased
again in May. At the end of April there was a 13.19 months supply of
homes, that number dropped to 12.69 months in May - a 6%
decrease.
"After months of struggling, homes sales over
$200,000 led the market higher in May. The Eastern Shore; Fairhope, Point
Clear, Daphne Montrose and Spanish Fort sales were up over 50% with an
average sale prices over $300,000. Dauphin Island sales also broke out in
May with a 30% increase and an average sales price over $300,000. In
addition to these “hot spots” the market over $200,000 appears to be
improving with 1 out of 20 listings selling compared to 1 out of 33 in
April. If the over $200,000 sales continue to gain momentum they could be
the needed spark to light the fuel for a very hot Summer. Pending sales
remain high, indicating continued strength in the market over the near term.
If there are any black clouds to the Mobile housing picture it would be the
number of homes available (5,221) and the potential for higher interest
rates. Interest rates are up almost a percentage point in the last 45 days
to the 5.5% area. So far the higher rates have not been a deterrent to home
sales and actually may be pushing some Buyers in to the market.”
Tommy Praytor, President, Praytor Realty,
Co., Inc.
MOBILE OUT
PACES NATION AGAIN
APRIL HOME
SALES KEEP PACE-UP 9%
MARKET
TIGHTENS UNDER $200,000
386 homes were sold in April versus 356 in
March – a 9%
increase for the month and 83% since January!
Average home prices returned to the
pre-first time homebuyer wave levels experienced in March to $152,519
versus $148,311- a 3% increase.
The time it takes to sell a home dropped 5
days to 96 days in April versus 102 in March- a 6% decrease.
Supply of available inventory decreased
slightly in April. At the end of March there was a 14.24 months supply
of homes, that number dropped to 13.19 months in March - a 7%
decrease.
"The strength of
the Mobile housing market remains impressive, sales in April were up 9% and
we are 83% higher than January of this year. After the big wave of first
time homebuyers in March, it would not have been a big surprise to see home
sales take a step back in April. Not only did sales keep pace they were up
9%! The big first time homebuyer wave appears to have run it’s course
allowing average home prices and the time it takes to sell a home to return
to February levels. The market is firm under $200,000 with 1 out of 9
houses selling in April. If there is a drag to the market it is the homes
priced over $200,000. In April only 1 out of 31 homes priced over $200,000
sold. If sales continue as they have in the first 4 months of the year, we
could experience a shortage in available houses under $200,000. In April,
homes under $200,000 made up 81% of the sales, while homes under $200,000
represent only 55% of the available inventory. New listings in April trend
to a shortage also, only 60% of the new listings in April were under
$200,000 compared to an 81% sales rate. Of the 2,763 listings under $200,000
only 53% have been listed for less than 90 days. With only 1,472 “fresh”
listings under $200,000 there is less than a 5 month supply of “fresh”
housing in this sector compared to a 13.19 supply for the entire system.
This segment of the market is rapidly approaching a tightness not
experienced since Katrina. With the current number of “pending” sales in the
system we expect the market to remain solid over the near term.”
Tommy Praytor, President,
Praytor Realty, Co., Inc.
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