Janet English Realtor Mobile Alabama's Eastern Shore Suburbs

Do the builders know something we don’t?

When they stick their collective fingers in the air to judge which way the wind blows do they sense economic fair weather ahead or just more of the same?

Judging by what’s happening with the market, national and regional builders are betting that better times are immediately ahead by listing some 68 new homes in Spanish Fort, Daphne and Fairhope since January 1.

Sure, some of the homes are not built, but drive through the subdivisions and you will see an outlay of cash for engineering work and utilities. These homes are going to be built.

About 19 percent of the 881 homes for sale on the Eastern Shores of the Mobile, Alabama metro area are new construction. It’s a $40 million bet that things are improving because that’s the value of the new home inventory.

The likely reasons:

n Pent-up demand for new construction after a virtual vacuum of new homes during the height of the Great Recession

n Price: The builders – many of them new – have retooled their price point and the buyers can’t help but notice that you can get a new home that’s cheaper than existing construction. (For example, a custom home with all the bells and whistles under $110/square foot.)

Currently, about 8 percent of the homes for sale are foreclosures or short sales, while in February these distressed properties accounted for almost a quarter of the sales.

In general, February was a solid month for sales, with 77 closings, little changed from the 74 sales this time last year, but up from 63 sales in January.

Here are the stats for the Eastern Shore:

Total houses for sale: 881

Homes for sale in Spanish Fort AL: 144

Homes for sale in Daphne AL: 283

Homes for sale in Fairhope AL: 454

Pending sales:

Total: 172

Spanish Fort: 22

Daphne: 79

Fairhope: 71

Closed sales for February 2012

Total: 77

Average sale price: $257,094, way up from $175,694 in January and $176,013 in December.

Median sales price: $172,900, again up from $150,000 in January and $160,000 in December.

List to sale percentage: 96.17%, a slight improvement over 96.02% in January and a big improvement over 94.66% in December

Spanish Fort: 9

Daphne: 42

Fairhope: 26

January 2012 home sales were typically down from December 2011 sales, but pending sales are improved over last month and January of last year.

Homes going under contract in Spanish Fort, Daphne and Fairhope stood at 170, while only 140 were under contract after the first week in December and only 146 this time last year.

Who are these buyers? My experience is that it’s a good mix of tranferees and renters who have been sitting on the fence for quite some time.

The average sales price remained largely unchanged. All good news for the real estate market on the Eastern Shore of the Mobile, Alabama metro area.

Here are the stats for the Eastern Shore:

Total houses for sale: 861

Homes for sale in Spanish Fort AL: 143

Homes for sale in Daphne AL: 281

Homes for sale in Fairhope AL: 437

Pending sales:

Total: 170

Spanish Fort: 22

Daphne: 90

Fairhope: 58

Closed sales for January 2012

Total: 63

Average sale price, $175,694, down from $176,013 in December, and $196,791 in November and $197,251 in October

Median sales price: $150,000 down from $160,000 in December, $163,100 in November.

List to sale percentage: 96.02% in January, an improvement over 94.66% in December

Spanish Fort: 8

Daphne: 35

Fairhope: 20

2011 was the Year of the Foreclosure.

Foreclosure sales comprised almost a third of all single-family home sales in Spanish Fort, Daphne and Fairhope. This segment of the market expanded from 14% of sales in 2009; to 25% in 2010; to 31% in 2011.

Yet at any given time only 10-15% of homes listed on the Eastern Shore of the Mobile, Ala., metro market are foreclosures or short sales.

In a nutshell, buyers have been foreclosure crazy, and who can blame them? Some properties are in deplorable shape, yet others are better than many an owner-occupied home.

The foreclosure – and to a lesser degree the short sold homes – put a serious drag on the average sales price, which fell 7.5% from $228,658 in 2010 to $211,455. Since the start of the housing crisis locally, average home prices have slid 29.5%.

To dig deeper, foreclosures sell at a price per square foot that’s 33% lower than non-foreclosed homes. But they cannot be ignored as a comparable sold in either pricing or appraising a home.

When will it end? Unknown.

BUT!!!

The good news is the number of homes sold increased 14% over 2010 and inventory has declined. In 2010, 948 homes sold, while in 2011, 1,099 sold.

We learned the importance of home sales – even at depressed prices -- to this economy during The Great Recession (not to mention the two or so years after it was supposedly over). Home sales generate income for lenders, home inspectors, insurance agents, builders and handymen, building suppliers and even the lowly real estate agent.

On to the numbers:

For all of 2011 in Spanish Fort, Daphne and Fairhope, there were 1,099 sales with an average price of $211,455 compared to 948 sales in 2010 with an average price of $228,658. On average, sellers took 5% off their list price in order to sell. The time it took to sell averaged 174 days.

The 4th quarter of 2011 was a good one with 243 sales compared to 314 in the 3rd quarter and 213 this time last year. The average sales price was $190,381, compared with $234,490 last year and $211,477 in the 3rd quarter.

Spanish Fort: 165 homes sold in 2011 vs 155 in 2010. Average sale price remained little changed at $255,589 compared to $257,665 in 2010. Sellers took almost 5% off their prices in order to sell. Market time increased from 159 days in 2010 to 164 days in 2011.

In the 4th quarter: 38 homes sold, down from 45 the previous quarter.Average sales price dropped from $298,117 to $230,811. Sellers took about 5.5% off their prices in order to sell. Average days on market: 149.

Daphne: 494 homes sold compared to 446 sales in 2010. Average sales price dropped from $197,794 to $178,478 in 2010. Sellers settled for 4% less than list price. Market time was largely unchanged from 161 days in 2010 to 159 days last year.

In the 4th quarter, 118 homes sold, down from 136 sales in the 3rd quarter. Average price was $164,651, compared to $166,085 in the 3rd quarter. Sellers got 94.7% of their sales price and market time again was little changed at 161 days.

Fairhope: 440 homes sold, compared with 347 in 2010. Average sales price fell from $255,370 in 2010 to $231,928 in 2011. Sellers settled for 6% less than the asking price. Average market time: 194 days.

In the 4th quarter, 87 homes sold, compared to 133 sales in the 3rd quarter. Average selling price was $207,620, compared with $211,477 in the 3rd quarter. Sellers took 6.5% off the price in order to sell. Market time: 174 days.

December home sales were more ho-hum than ho-ho-ho. Not bad but not spectacular.

On the Eastern Shore of the Mobile, Alabama, metro area, there were 81 homes closed, down slightly from 84 in November.

Average sale prices, as well as the median price, took hits largely due to the fact that 37% of home sales in Spanish Fort, Daphne and Fairhope were foreclosures. Another 23% were new homes.

Here are the stats for the Eastern Shore:

Total houses for sale: 838

Homes for sale in Spanish Fort AL: 125

Homes for sale in Daphne AL: 284

Homes for sale in Fairhope AL: 429

Pending sales:

Total: 140

Spanish Fort: 18

Daphne: 81

Fairhope: 41

Closed sales for December, 2011

Total: 81

Average sale price, $176,013, down from $196,791 in November and $197,251 in October

Media sales price, $160,000, down from $163,100 in November and $168,900 in October

List to sale percentage: 94.66%, an improvement over $93.93% in November

Spanish Fort: 17

Daphne: 42

Fairhope: 22

In the old days – Pre-Apocalyptic Housing Market Meltdown – the fourth quarter was the second busiest time of the year, eclipsed only by the spring/summer sales season.

And then … Well, we all know what happened then.

For Realtors, the rhythms were all off. Everything was out of sync. One month, good; the next, abysmal. Nothing made sense.

But this quarter things appear to be resuming their normal patterns, albeit at a more anemic level.

Home sales in November, rose to 84 over 76 in October and pending sales remain steady at 156.

Inventory continues to slowly drop and foreclosures only represent 8.5% of the homes for sale in Daphne, Spanish Fort and Fairhope. Expect that number to rise in the spring as the jolly ol’ bankers shed their Santa Clause costumes and resume business as usual.

Foreclosures still represented 29% of sales in November (buyers are drawn to them like a child to a candy cane). New construction accounted for 19% of sales.

Here are the stats for the Eastern Shore:

Total houses for sale: 893

Homes for sale in Spanish Fort AL: 134

Homes for sale in Daphne AL: 303

Homes for sale in Fairhope AL: 457

Pending Sales:

Total: 156

Spanish Fort: 20

Daphne: 96

Fairhope: 40

Closed sales for November, 2011

Total: 84

Average sales price, $196,791, a little down from $197,251 in October and significantly down from $213,523 in September.

Median sales price: $163,100, down again from $168,800 in October and $171,838 in September.

List to sale percentage: 93.93%, a decline from 94.16% in October

Spanish Fort: 11

Daphne: 35

Fairhope: 38