Alabama real estate professionals still positive moving into 3Q
Alabama's real estate professionals continue to have a positive outlook on the market moving into the third quarter of 2017.
According to the Alabama Center for Real Estate's Third Quarter 2017 Survey Analysis, the overall score stood at 57, three points higher than the third quarter in 2016.
This survey projects expectations for the 3rd quarter of 2017. The scale ranges from 0-100 with 0 being much worse, 100 being much better, and 50 indicating no change expected.
Over 300 real estate professionals responded to the most recent survey, with all of the overall residential and commercial indicators now pointing upward at 55 or better. The availability of credit was rated at 54, up two points from last year.
When asked about the most important factors for real estate in the middle of 2017, over two dozen professionals noted the lack of inventory on the market.
Inventory has been one of the topics of discussion nationally over the past few months, as many markets across the country are dealing with decline in housing inventory. Alabama markets are no stranger to this trend, with most of the major markets seeing year-over-year decline in inventory throughout the first six months of 2017.
Other factors noted for the third quarter were "uncertainty in national politics," "the delay from Congress in the repeal and replace of Obamacare and refusal to address tax reform," "land for development," "credit availability" and "interest rates."
This quarter was slightly off from last quarters’ robust growth expectations yet still ahead of last year. The overall total score decreased by 4 from last quarter to 57, up by 3 from last year. The overall stat measure, and the other combined scores, indicate that the residential and commercial markets should be even more robust than last year at this time. This quarter, the indicators have slightly diverged this quarter indicating some differences in the expectations for the different regions of the state.
The below chart reflects the aggregate scores for the survey overall. The overall total stat score
is in bold green.
Commercial market participants, (the majority of the respondents are from the Birmingham market area), remain enthusiastic. The Total Stat is at 59 this quarter off 1 from last quarter and up by 8 points from last year. Sales expectations are very positive at 59 off by 5 from last quarter and up by 6 from last year. The score for inventory availability is 51 off by 5 from last quarter and off by 2 from last year.
Area scores have diverged somewhat from what we have seen in prior quarters, for "total scores", ranging from 55 to 60. The scores are well above the break even point of 50 indicating expanding market conditions across the state. Sales expectations experienced a mix of changes from last quarter from -5 to +3 points for the upcoming quarter compared to last. The South Central area including Montgomery saw a year to year decline of 5 to a still robust 57. The moving average line (yellow, below) is the prior 4 quarters averaged of the Alabama expectations, which removes the effect of seasonality, is now pointing quite upwards. The current quarter sales expectation scores are ranging from 64, North Huntsville Decatur Florence area, to 56 for The North Central-Birmingham Tuscaloosa Anniston area, and 59 for the Coast, and 57 for South Central Montgomery Auburn Wiregrass Dothan area. All pointing to expansion.
About the Alabama Real Estate Confidence Index and Survey:
304 professionals responded to the Third Quarter 2017 survey which was conducted during the month of June 2017.
The survey, conducted by the Alabama Center For Real Estate has the largest participation of any real estate survey. It provides important market insights. We have now accumulated over 13,800 responses over 7 years. Full history and raw scores can be obtained by contacting the undersigned.
The ACRE Leadership Council determined the need for a statewide industry confidence index and this was adopted as the Council’s first initiative. Tom Brander, was selected by the Council and Grayson Glaze, ACRE Executive Director, to spearhead and work with the Center to conduct and produce its Alabama Real Estate Confidence Index (ARECI).
The Council appreciates everyone who participates. For further information contact Tom Brander at Tombrander@tombrander.com or Grayson Glaze at firstname.lastname@example.org.
Clayton McKinnon, Hoar Construction