Economic Snapshot Overview by Dr. Reid Cummings - August 2018
Posted on August 27, 2018 by Dr. Reid Cummings
Greetings, and welcome to the August 2018 Mobile Bay Economic Snapshot.
This month, we take a look at how the area’s real estate markets have performed during the first half of the year, and offer comparisons to market activity during the same period in 2017.
Mobile County, Q1-Q2 2018
Existing single-family home sales declined during the first half of 2018 by 1.7% versus 2017, registering 3,073 transactions. However, total sales volume rose 3.0% year-over-year to $426.2 million versus $413.8 million in the first half of 2017. Increased sales volume reflects higher average sales prices for existing single-family homes of $138,700, a 4.7% increase.
New single-family home sales declined only slightly, falling from 175 units in the first half of 2017 to 171 units this year over the same time span. Similarly, total sales volume declined as well dropping from $38.2 million during the first two quarters of 2017 to $37.7 million in 2018. Even so, despite the sales volume decrease, average sales prices ticked up slightly, rising from $218,286 to $220,468, a 0.92% increase.
In the first half of 2018, 90 condominium sales occurred, which is only 3 fewer than in the first half of last year. Nevertheless, total sales volume rose 13.45%. Likewise, average unit prices also increased, rising 17.23% from $127,957 in 2017 to $150,000 during the first half of 2018.
Commercial real estate sales showed impressive signs of strengthening. Incredibly, the number of transactions occurring in the first two quarters of 2018 was 21.38% higher than during the same period in 2017. Expectedly, sales volume rose as well, increasing 13.36% to $189.2 million.
Baldwin County, Q1-Q2 2018
Existing single-family home sales increased during the first half of 2018 by 5.99% compared to 2017. Recorded sales transactions totaled 2,264, generating $361.1 million in total sales volume. However, the average sales price declined slightly during the period, down 1.14% versus 2017.
New home sales experienced remarkable growth in the first two quarters of 2018, as the number of transactions increased by 10.85% over the same period last year. As would be expected, total new home sales volume also rose by 17.9% to $179.8 million. The numbers point to notable gains in the average sales price of new single-family homes, rising 6.37% to $262,482.
Condominium sales showed gains as well. Although the number of transactions declined 7.49% year-over-year, total sales volume increased 4.79% to $361.1 million. Average sales prices also showed impressive gains, rising 13.27% to $356,466 per unit.
Commercial real estate activity resulted in increases in the first half of the year compared to the same period in 2017. Although the 182 recorded transactions totaled 9 less than during the first half of 2017, total sales volume was up by 11.91%. This increase equated to a remarkable 17.45% increase in the average commercial real estate sales price.
As always, issues to bear in mind include likely continued interest rate increases, and although less worrisome, there are some signs that inflation is rising faster now than it has for many years. U.S. trade issues remain important to our area. Recent indications are that the U.S. and Mexico have closed the gap considerably on reaching a new trade agreement. Many expect that Canada will soon come to the table to work out a deal as well. These are important negotiations given our region’s connectivity to trade with both countries. Despite any trending negatives, with unemployment remaining incredibly low, and consumer confidence remaining exceptionally strong, we expect the robust performance in our real estate markets to continue for the remainder of 2018.
Until next time, from everyone at the Center, we wish you and yours all of the best.