Economic Snapshot Overview by Dr. Reid Cummings - October 2018

Posted on October 30, 2018 by Dr. Reid Cummings
Dr. Reid Cummings

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Greetings, and welcome to the October 2018 Mobile Bay Economic Snapshot.

This month, we take a look at how the area’s real estate markets have performed during the first three quarters of the year and offer comparisons to market activity during the same period in 2017.

Mobile County, Q1-Q2-Q3 2018

Existing single-family home sales decreased 2.53% for the first three quarters of 2018 versus the same period in 2017, registering 4,554 transactions. Average and median sales values are up year-over-year as well, with average home prices rising 5.75% and median prices up 7.8%. Total sales volume rose 3.14% to $644.8 million versus $625.2 million in the comparable 2017 timeframe.

New single-family home sales declined slightly as well, with 23 fewer new homes being sold in the first three quarters of the year versus the same period in 2017. Similarly, total sales volume declined, dropping from $60.3 million during the first three quarters of 2017 to $55.7 million in 2018. Even so, despite the sales volume decrease, average sales prices ticked up slightly, rising from $219,400 to $220,900, a 0.69% increase.

In the first half of 2018, 122 condominium sales occurred, 25 less than were sold in the same period in 2017. Total sales volume also registered a slight decline falling from 2017’s $19.4 million to $18.4 million in 2018. Average unit prices rose substantially in 2018, rising to $150,900 versus $132,200, an uptick of 14.2%. Median prices moved even more dramatically, finishing the first third of 2018 41.9% higher than in 2017.

The number of commercial real estate sales transactions from January through September 2018 was 16.1% higher than for the same period in 2017. A total of 253 properties traded versus 218 in 2017. Average sales prices were also higher this year at $1.6 million compared to last year’s $1.34 million average. Sales volume tells the most impressive story though. Through September 2018, commercial sales transactions totaled $402.9 million. Over the same period last year, commercial sales volume was only $292.8 million, a 37.6% increase.

Baldwin County, Q1-Q3 2018

Existing single-family home sales decreased 14.6% during the first three-fourths of 2018, tallying 3,481 sales compared to 2017’s 3,989 transactions. Through September 2018, recorded sales transactions generated total sales volume of $891.11 million versus $989.7 million in the first nine months of 2017, an 11.1% decline.

The number of new home sales increased by an incredible 12.6% in the first three quarters of 2018 compared to 2017 with 1,021 transactions recorded so far in 2018. Average sales prices also increased by 6.9% to $263,900. The most eye-catching statistic is the increase in total sales volume, which rose from $223.9 million in 2017 to $269.4 million from January through September; this is a remarkable 20.3% rise.

Condominium sales slowed a bit in 2018. Year to date, 1,474 units sold compared to 1,541 closed transactions in the same period in 2017. Average sales prices rose 8.27% to finish at $353,600. Despite the fewer number of 2018 transactions, higher sales prices pushed total volume up. 2018 year to date sales volume totaled $521.2 million versus $503.3 million in 2017.

Commercial real estate activity has declined so far this year, with 267 closed transactions versus the 276 transactions that closed in 2017 in the same period. However, average sales prices ticked up 1.8% to finish at $585,300 compared to 2017’s $575,200. Median sales prices were also 13.4% higher in 2018.

As this report is being prepared for distribution, political candidates across the country are entering their final week of the 2018 election season. Campaign promises typically frame the post-election discussion. It remains to be seen if the discussion will center on repealing much of the Trump administration’s regulatory reforms, or if we will be discussing a possible tax increase. Either way, as interest rates continue to rise—seven increases in the last three years—and a possible increase coming this December, and as home values move up as well, the housing market will likely cool just a bit.

Until next time, from everyone at the Center, we wish you and yours all of the best.

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