Lake Martin area home sales decline in May 2020
Sales: According to the Lake Martin Area Association of Realtors, May residential (waterfront and non-waterfront) sales decreased 19.8% from 86 to 69 closed transactions. Following seasonal trends, sales increased 32.7% from April. Two more resources to review: Quarterly Report and Annual Report.
For all of the Lake Martin Area’s housing data, click here.
Inventory: Total homes listed for sale in May declined 25.9% year-over-year from 572 to 424 listings. Months of supply decreased from 6.7 to 6.1, reflecting a balanced market that is slightly above the equilibrium point (6 months of supply).
Pricing: The area’s median sales price in May was $338,500, an increase of 41.9% from one year ago and an increase of 1.7% from April. The differing sample size (number of residential sales of comparative months) can contribute to statistical volatility, including pricing. ACRE recommends consulting with a local real estate professional to discuss pricing, as it will vary from neighborhood to neighborhood.
Homes sold in May averaged 137 days on the market (DOM), 7 days faster than May 2019.
Forecast: May sales were six units, or 8%, below the Alabama Center for Real Estate’s (ACRE) monthly forecast. ACRE projected 75 sales for the month, while actual sales were 69 units. ACRE forecast a total of 290 sales in the area year-to-date, while there were 264 actual sales through May, a difference of 9%.
Click here to view the entire monthly report.
NAR commentary: According to the National Association of Realtors (NAR), existing home sales nationwide fell 9.7% during May (seasonally adjusted annual rate). This marks a three-month decline in sales activity due to the pandemic. Sales prices, however, remained somewhat stable as the nationwide median sales price increased 2.3% Y/Y, extending the streak of year-over-year price gains to 99 consecutive months.
When addressing slowing home sales, Lawrence Yun, NAR chief economist said: “Sales completed in May reflect contract signings in April and April – during the strictest times of the pandemic lockdown and hence the cyclical low point. Home sales will surely rise in the upcoming months with the economy reopening, and could even surpass one-year-ago figures in the second half of the year.”
Yun added that ““New home construction needs to robustly ramp up in order to meet rising housing demand, otherwise, home prices will rise too fast and hinder first-time buyers, even at a time of record-low mortgage rates.”
ACRE commentary: Closed sales data from May shows that total residential sales declined 15% year-over-year. Sales prices, however, increased 7.1% Y/Y in May. Inventory (properties listed for sale) was tight before the pandemic, and inventory continues to be constrained as listings declined 22% from one year ago. In the months ahead, sales activity is likely to slow when compared to the prior year (Y/Y decline in sales) due to the growing economic impact of the pandemic. While sales prices were somewhat stable through May, they could decline slightly later in the year if demand continues to soften. Pricing dynamics driven by the law of supply and demand are always at work moving toward or away from market equilibrium (6 months of supply) - where buyer and seller have equal bargaining power. In May months of supply was at 3.1.
The Lake Martin Area Residential Monthly Report is developed in conjunction with the Lake Martin Area Association of Realtors to better serve area consumers.
Editor's Note: All information in this article reflects data provided to the Alabama Center for Real Estate for the time period May 1 - 31, 2020. Thus, the performance represented is historical and should not be used as an indicator of future results, particularly considering the upcoming impact of COVID-19 on the housing market.