Economic Snapshot Overview by Dr. Reid Cummings - April 2019
Posted on April 30, 2019 by Dr. Reid Cummings
Greetings, and welcome to the April 2019 Mobile Bay Economic Snapshot.
This month, we highlight real estate market performance through the first quarter of the year.
Mobile County, Q1-2019
A total of 1,622 existing single-family homes changed hands in the first quarter, down (14.27%) from Q1-2018. Although there were fewer sales, average and median sales values are up year-over-year, with average home prices rising 2.76% and median prices increasing 3.53%. Total sales volume declined though by (10.67%) to $201.2 million versus $225.2 million in the comparable 2018 timeframe.
More new single-family homes sold in Q1-2019 than in the first quarter of last year, increasing by 9.52%. Similarly, total sales volume rose by 19.29% to $16.7 million. Average sales prices and median sales prices of new homes also showed positive increases over the previous year. Average sales prices increased by 11.72% to $247,800, while median prices were up 11.86% to $225,400.
Overall, Mobile County condominium sales declined year-over-year. The total number of units sold fell by (6.90%), resulting in a total sales volume decrease of (17.86%) to $6.9 million. Average and median prices also declined as well, falling from $146,900 and $123,700 in Q1-2018, to $126,900 and $87,600, respectively.
There were fewer Mobile County commercial real estate sales transactions in the first quarter of 2019 than in 2018. Even so, total sales volume rose by 17.6% to $102.9 million. Average sales prices rose to $1.1 million, while the median sales price was lower at $192,100.
Baldwin County, Q1-2019
The year-over-year number of existing single-family home sales transactions declined by 8.55% to 1,177. Sales volume on the other hand, increased, gaining 1.73% to total $299.8 million for the quarter. Average and median sales values were also higher. The $253,900 average sales price in Q1-2019 was up 10.58% over the same period in 2018, while the median sales price finished at $191,700, a 9.04% increase.
New single-family home sales decreased only slightly in the first quarter of 2019 compared to the same period in 2018. The (1.20%) decline reflects lower total sales volume of $85.5 million. Average new home sales prices were 2.38% higher at $262,000, while median sales prices were (6.98%) lower to end the quarter at $226,500.
Condominium sales showed some signs of weakening. Total unit sales dipped (0.85%) for a total of $210.9 million. The number of units changing hands declined from 609 in Q1-2018 to 593 in the first quarter of this year. The average sales price barely fell (0.26%) to $346,000. However, the median sales price increased by 9.18% to close the quarter at $300,800.
Commercial real estate activity gained significant traction in the first part of 2019. The number of sales transactions increased by 44.59% to 107. Total sales volume also rose sharply, up 26.56% to finish at $81 million. The average sales price declined (11.5%) to $739,300 while the median sales price finished at $283,400, a (3.04%) decrease from the same period in 2018.
For all of the hand wringing about the Federal Reserve’s late 2018 moves to increase interest rates, the signals now emanating from the FOMC suggest anticipated rate hikes are on hold, likely for the rest of 2019. How the availability of fairly cheap credit will impact real estate sales for the remainder of 2019 will continue to be fodder for much discussion. Over the last decade, many analysts suggested that millennials had not participated as robustly in the housing market as their baby-boomer predecessors did.
It does seem though that this trend is changing. According to Realtor.com chief economist, Danielle Hale, “Millennials will continue to make up the largest segment of buyers next year, accounting for 45% of mortgages, compared to 17% of Boomers, and 37% of Gen Xers. While first-time buyers will struggle next year, older Millennial move-up buyers will have more options in the mid-to upper-tier price point and will make up the majority of Millennials who close in 2019. Looking forward, 2020 is expected to be the peak Millennial home buying year with the largest cohort of millennials turning 30 years old. Millennials are also likely to make up the largest share of home buyers for the next decade as their housing needs adjust over time.” As always, stay tuned as we continue to keep a close eye on our area’s real estate markets.
Until next time, from everyone at the Center, we wish you and yours all of the best.