Daphne, AL

Home sales improved in December in Spanish Fort, Daphne, Fairhope and Point Clear. Sixty-six homes sold in December, up from the abysmal statistic of only 47 home sales in November.

Pending sales dropped to 86 under contract as of Jan. 3, 2009. That's a decrease from the 98 under contract in November.

Inventory dropped from 1,157 homes for sale on the Eastern Shore as of early December to 1,079 homes for sale Jan. 3, 2009. But this is only because a tremendous number of listings expired with the old year. Expect them to be brought back on the market rapidly.

Interest rates dropped before Christmas to a low of 4.25%, but that held briefly. Still, rates have vacillated in the upper-4% to lower-5% area since.

The list to sale percentage has widened, meaning sellers are making deals to get houses sold. In November, the list-to-sale percentage was 95.21%; in December it dropped to 91.99%. In other words, sellers took on average 8% off the price of the house.

Here are the stats for the Eastern Shore in December:

Total houses for sale: 1,079

Spanish Fort: 118

Daphne: 329

Fairhope: 501

Lake Forest: 1131

Pending sales

Total: 86

Spanish Fort: 20

Daphne: 28

Fairhope: 29

Lake Forest: 9

Closed sales for December 2008

Total: 66

Average sales price: $274,054

Median sales price: $225,000

List to sale percentage: 91.99%

Spanish Fort: 7

Daphne: 24

Fairhope: 21

Lake Forest: 5

I was recently asked to provide information to a potential seller about what today’s buyer is willing to pay for homes in the Lake Forest area of Daphne, Alabama. I thought after my research that I would post this timely information as others may benefit from it, and it does apply to all areas and subdivisions in Baldwin County as well.

As you have probably noticed in your neighborhood, many nice homes are sitting on the market and are not selling. Why is that? Because buyers are not willing to pay top dollar in this market we are now in. You may be wondering what is selling, what buyers are looking for today, and what prices homes will bring.

Today, there are 139 homes for sale in the MLS in Lake Forest alone, with 9 of these pending. In addition, there are a few dozen for sale by owner homes in the subdivision. Many other homes have expired from the MLS without selling.

From these numbers, you can see that competition is very tough for sellers to attract the few buyers that are out there. What this translates to is that PRICE is what will sell a home in this market. The lowest priced homes for the size are selling, and buyers can afford to be choosey with so many to look at.

Pretty much the lowest price house, in the best shape is getting offers, while other very nice homes just sit on the market and aren’t getting any offers.

These statistics are sobering: In just over three months, only 16 homes out of over 180 homes up for sale have sold in Lake Forest in Daphne. If no other homes entered the market for sale, it would take THREE YEARS to reduce the inventory of available homes at this rate.

From this you can see that PRICE is indeed what it will take to sell a home today. So, if you are taking the approach of , "Let's price it high because we can always come down", you may just have three years to see if your idea will work to attract your buyer.

November 2008 home sale statistics for Spanish Fort, Daphne and Fairhope, Alabama

Home sales in November, 2008, dropped to 47 houses sold in Spanish Fort, Daphne, Fairhope and Point Clear. This follows the home sales peak of 135 sales in July, then a decline to 84 in August, 71 in September, and 53 in October.

Pending sales have risen slightly to 98 homes under contract, compared with only 87 under contract in October.

Inventory continues to decrease slightly to 1,157 homes for sale on the Eastern Shore as of Dec. 3.

As we all know, there are few bright spots in the economy these days. A big however is that mortgage interest rates have fallen, hovering around 5.25 percent. Let's hope that word spreads.

Here are the stats for the Eastern Shore in November:

Total houses for sale: 1,157

Spanish Fort: 127

Daphne: 339

Fairhope: 561

Lake Forest: 130

Pending sales

Total: 98

Spanish Fort: 20

Daphne: 42

Fairhope: 35

Lake Forest: 7

Closed sales for November 2008

Total: 47

Average sales price: $266,916

Median sales price: $210,00

List to sale percentage: 95.21%

Spanish Fort: 6

Daphne: 18

Fairhope: 15

Lake Forest: 8

Janet English, RE/Max By The Bay, 251 591-2411

The last time the Eastern Shore home sales market was this slow was October, 2001, the month after 9/11 attacks on the United States.

Home sales in October 2008 dropped again to only 53 homes sold in Spanish Fort, Daphne, Fairhope and Point Clear. This follows the home sales peak of 135 sales in July, then a decline to 84 in August and 71 in September.

Pending sales have also fallen to just 87 homes under contract to sell.

While disappointing, this is not surprising as that nation was spellbound by the erratic spiral downward of the stock market, coupled with the last month of presidential politicking.

Inventory continues to slide slightly from a peak around 1,300 this summer to 1,183 for sale on Nov. 6.

Today, interest rates are reacting to market news and are entrenched above 6% locally.

Here are the stats for the Eastern Shore in October:

Total houses for sale: 1,183

• Spanish Fort: 133
• Daphne: 350
• Fairhope: 577
• Lake Forest: 123

Pending sales

• Total: 87
• Spanish Fort: 20
• Daphne: 26
• Fairhope: 29
• Lake Forest: 12

Closed sales for October 2008

• Total: 53
• Average sales price: $240,565
• Median sales price: $217,000
• List to sale percentage: 94.96% (down from 96.92% in July)
• Spanish Fort: 8
• Daphne: 24
• Fairhope: 20
• Lake Forest: 1

Ever-increasing homeowner insurance rates are not only affecting family budgets, but also home sales.

For example, an older home north of Interstate 10 in Spanish Fort - elevation 150 feet above sea level - would appear to be a likely candidate for lower rates. Not so, prospective buyers are finding. In fact, they may be shocked to find that they need to be insured through the Alabama Insurance Underwriting Association (AIUA), also known as the "beach pool."

The root cause is that insurers are trying to reduce their liability along the entire Gulf Coast. To do that, they have constructed parameters on what they will insure and where.

Three Eastern Shore insurance agents whom I contacted agreed to tackle a couple of questions to try to explain: They are: Lad Drago Jr. of State Farm; Glen Gorowsky with the independent Gorowsky Group; and Matt Malone of Malone Insurance, which sells Farmers Insurance. Each agent also sells other insurer's products.

Q: Since insurance cost is a consideration in a house purchase, what type of house, what age and what location will get a buyer the best rate?

A: Drago: Newer, brick homes will always get a lower rate than frame or older homes. Homes located in north Spanish Fort (north of Bay Minette Creek), Stapleton, Loxley, Silverhill, Robertsdale and north Foley are going to get lower rates and can be written through State Farm with wind coverage included. My team will map the homes and let the buyer know what to expect. Homes in southern Spanish Fort, Daphne, Fairhope, and Point Clear can be written through State Farm with AIUA for the wind.

Gorowsky: This has been a moving target and has just changed with the last major insurer (Farmer's) now not writing in Spanish Fort or Daphne.

The main consideration is distance to the water. From U.S. 98 west is the most expensive; going east of it drops as the carriers' exposure drops.

Older homes still rate well, but could experience a rate surcharge if the roof is older than 20 years. When shopping, make sure you know how old the roof is, or when it was replaced.

Malone: New house Fairhope 2006 or newer. The Loxley, Silverhill, Robersdale and Foley are still good (if they are built no later than 1995). 36526 (Daphne) and 36527 (Spanish Fort) are out (with Farmers). Fairhope is 2006 and newer. We have current contracts with Geovera, Lexington, Foremost (owned by Farmers) AIUA (beach pool).

Q. What options do homeowners have if their insurance is so high that they are having trouble paying for it?

A: Malone: I hear that a lot. It's sad. I hate it. They could maybe downsize. ... Some folks that own their home are self-insuring the wind. I do not advise this.

Drago: The only advisable option is to increase their deductibles. By taking on more personal risk through increased deductibles, a customer can reduce his annual premium. State Farm also gives a substantial discount to homeowners who also have their cars insured with us. Finally, if a person is purchasing an older home that has been completely updated (electrical, plumbing, and AC) they may qualify for a 35% Utility Rating Discount on their premium.

Gorowsky: Shop it. At times certain Lloyds of London syndicates offer outstanding rates, but once their quota is written, it goes away until a new quota is offered. New insurers are rumored to start writing in the next 3-6 months.

Contact information:

Lad Drago: 251 626-1237

Glen Gorowsky: 251 367-2599

Matt Malone: 251 990-4000